The national average price of a 6 kilowatt (kW) solar energy system is about 10.55 cents per kilowatt-hour. For context, residential solar panels typically range in size from 3 kW to 8 kW. This is before considering potential tax incentives and refunds. But what does all of that really mean? Let's break it down into what solar energy could cost your home.
The amount of energy used by your home will determine the amount of solar panels you'll need to install to offset your energy costs. Homeowners can look at their electricity bills to calculate their average daily energy consumption and compare it to the number of panels that would be needed to generate all of their energy needs. The amount of sun exposure your home receives can affect the amount of energy solar panels absorb and, in turn, the amount of money you can absorb from your existing electricity bills. Where a homeowner lives can affect the local installation rate, as well as the number of incentives and rebates available in the area.
Compared to other home improvement projects, solar panels are a relatively high-cost project. But, in turn, they can increase the market rate of a home and, eventually, offset electricity bills. In general, solar panels begin to pay for themselves in small increments during the first year. Homeowners can expect broader amortization compensation between five and 15 years, depending on the configuration and where you live.
Homeowners use solar energy in different capacities in all 50 states, but some inevitably perform better than others. That's why where you live can be a critical factor in deciding if your home is a good candidate for solar energy. To start calculating your own costs, see our table below. Find the square footage closest to your home and see the range of panels you may need and the cost of those panels.
The panel number varies depending on whether you live in a state that is better or worse for solar energy due to the weather and whether or not you want to compensate for all or only a portion of your electricity needs. See “How Many Solar Panels Will You Need? below for more information. To find out how many solar panels you'll need, you'll want to determine how much electricity your home consumes on a daily basis. A solar inverter will need to be installed to transform the direct current (DC) power from the panels into the alternating current (AC) that you can use in your home.
The average household uses 905 kWh per month, or about 10,850 kWh per year, in electricity. That means an average-sized home with a decent amount of sunlight could install a 5 kW to 6 kW solar panel system to help reduce utility bills. You may want to learn about the sun number score for solar energy, which is calculated based on the location of your home and the average exposure to sunlight. Also, explore the different dimensions and sizes of solar panels with your contractor for more context.
On the other side of the coin is the resale value of your home. A Zillow analysis showed that solar panels can increase the value of a home by up to 4.1 percent. Simply put, if your home can take advantage of net solar metering, solar energy that is abundantly collected and not needed in your home will go through your meter and go on the grid. A digital meter in your home records electricity moving in any direction as you enter the house and when you leave.
The “net share” of the term means that the homeowner pays the “net amount” for the electricity used by the home minus the extra sold to the grid. There are several payment options that group solar installation costs into the consumer's electricity bill, either as a solar panel lease option or as a power purchase agreement (PPA). Solar leases allow the homeowner to install solar panels without paying anything (or much) upfront, reducing the total cost of solar panels. After installing the panels, the landlord pays only a fixed monthly fee.
The fee includes installation costs, which are distributed over time, and the cost of supplying electricity. It's worth noting that, in most solar leasing agreements, the solar company generally maintains the incentives associated with owning solar panels. But the consumer gains other advantages. The solar energy company may offer a monthly charge below the utility rate, or one that doesn't increase like utility rates do.
At the end of the contract, homeowners can renovate, purchase the system, or have the equipment removed from the solar panel. If you decide to sell your home, having solar panels leased may work against you, as you would have to transfer your lease to a qualified buyer, which means, of course, making sure that the person making an offer on your home is qualified in the first place. Many homebuyers would prefer not to deal with that extra paperwork, which means that homes with solar leases stay on the market longer than homes in which solar panels are owned. Solar energy may be simple in concept, but in application, it can be disconcerting.
And the best approach for one homeowner isn't necessarily the best approach for another. Take the time to gather relevant information about home size, local solar insolation, existing electricity rates, and consumption. Is it worth it to calculate the potential cost of solar energy for your home. Solar panels can not only power your home's electricity for appliances, but they can also be installed for other benefits, such as heating and cooling your home with solar energy, heating water with solar energy, and even heating a swimming pool with solar energy.
Real Homes has the support of its public. When you buy through links on our site, we may earn an affiliate commission. We explain why you can trust us. Whether you want to save on your monthly energy bill or secure a future without power outages, the cost of solar panels can pay off in the long run.
Please refresh the page and try again. If you're curious about how much it costs to install solar panels and if your home is worth doing the work, you're not alone. Solar energy is “booming” in the United States, with an average annual growth rate of 33 percent and a price drop of 70 percent over the past decade, according to the Solar Energy Industries Association (SEIA). In a nutshell, installing solar panels is considered a pretty hot trend right now, pun intended.
Most homeowners install solar panels in their homes to save money on their energy bills. And according to Jamie Haenggi, executive vice president and chief operating officer of ADT Solar (opens in a new tab), “Most consumers save on par or less than their usual energy bills. In addition, more people have electric vehicles and work and study from home. So they can't have a power outage and keep doing their job.
This is because the few disadvantages are often discarded. So here are a few you'll want to consider. If the cost of solar energy is prohibitive, Haenggi suggests having an energy audit of your home. She says an ADT Solar professional will evaluate the efficiency of a home and make suggestions for other ways to reduce consumption.
Many electric companies offer the same service. Whether you go solar or not, she recommends investing in an energy audit and the recommendations that come with it. If solar energy aligns with your life plan, you have a lot to look forward to. In addition to saving costs, you will do your part to invest in your home and your home planet.
Alexander writes website texts, blog posts, and articles on home remodeling and construction topics from his home in Virginia's Shenandoah Valley. In addition to Real Homes, notable customers include This Old House, Family Handyman, and Florida Roofing magazine. Local labor costs for solar installation will change based on your area and the average costs charged by solar installers in your area. Solar panels may cost more depending on the region due to the total cost of electricity, the tax incentives available, and the maximum number of hours of sunlight in that area.
Many solar companies offer a free calculation tool to help you easily estimate the cost and savings of installing solar panels in your home. Solar panels generate electricity approximately 30% cheaper than utility electricity in most places, so they're worth it. Installing solar energy as a DIY project is difficult and will cost more because solar companies buy in bulk directly from manufacturers. Many companies also offer the option of solar leasing, where you lease solar panels (as you would with a car) for a set period of time, usually around 25 years.
This is a good option if you have a roof that can't support the weight of solar panels, or if your roof is shaded and doesn't get enough sunlight. Considering the federal tax credit for installing solar panels, most Americans' solar panels begin to pay for themselves within seven years. This price will depend on location, as solar energy will cost more in regions further from the equator, such as Alaska, and will cost less for sun-drenched regions and how many solar panels you will need. Panels from certain solar energy manufacturers are more expensive than others, and that doesn't always mean they're much better in terms of performance.
In turn, the more electricity costs you want solar energy to absorb, the more panels you need. . .