How to Save Money When Buying custom solar panels

Solar panels are built to work in all climates, but in some cases, rooftops may not be suitable for solar systems due to age or tree cover. If there are trees near your home that create excessive shade on your roof, rooftop panels may not be the most ideal option. The size, shape, and slope of your roof are also important factors to consider. Typically, solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs may be suitable too. You should also consider the age of your roof and how long until it will need replacement.

Link to OUSHANG SOLAR

If a solar professional determines that your roof is not suitable for solar, or you don’t own your home, you can still benefit from solar energy. Community solar allows multiple people to benefit from a single, shared solar array that can be installed on- or off-site. Costs associated with purchasing and installing a solar energy system are divided among all of the participants, who are able to buy into the shared system at a level that best fits their budget. Learn more about community solar.

Those interested in community solar can take advantage of a tool from SETO awardee EnergySage. The company's Community Solar Marketplace aggregates the many available options in one place and standardizes project information, allowing interested consumers to easily locate and compare multiple community solar projects in their area.

The National Renewable Energy Laboratory (NREL) developed a tool called PVWatts for this purpose. It estimates the energy production and cost of energy of grid-connected PV energy systems for any address in the world. It allows homeowners, small building owners, installers, and manufacturers to easily develop estimates of the performance of potential PV installations, and can even compare solar’s cost to utility bills. These tools are great for getting started, but make sure to work with a solar installer for a custom estimate of how much power your solar energy system is likely to generate.

For its analyses, NREL uses an average system size of 7.15 kilowatts direct-current with a 3-11 kilowatt range. According to SETO awardee EnergySage, that’s enough power to meet all the energy needs for an average home in Austin, Texas.

There are a number of mapping services that have been developed by SETO awardees that will help you determine if your roof is suitable for solar and can even provide you with quotes from pre-screened solar providers in your area. In addition to those resources, an internet search can help you find local companies that install solar panels. Because you will likely have many options to choose from, it’s important to thoroughly read reviews of solar companies to make sure you are selecting the best fit for you and your home.

Solar co-ops and Solarize campaigns can also help you start the process of going solar. These programs work by allowing groups of homeowners to work together to collectively negotiate rates, select an installer, and create additional community interest in solar through a limited-time offer to join the campaign. Ultimately, as the number of residents who participate in the program increase, the cost of the installations will decrease.

Most people going solar have a positive experience. But like other fast-growing industries, the rampant expansion of solar energy has opened the door to a small subset of bad actors.

Our Smart Shopping Tips for Solar outlines a few ways to identify red flags as you go solar: 

1. Don’t give in to pushy sales tactics
2. Talk to certified installers
3. Understand your financing options
4. Report bad actors

On August 7, , the U.S. Department of the Treasury (Treasury), the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC) issued a consumer advisory to help you identify potential consumer solar scams and file complaints about suspicious behavior. Before you sign any documentation with a solar company, carefully review these educational materials:

• Before You Buy Solar Panels
• Before You Sign a Solar Lease
• Before You Sign a Power Purchase Agreement
• Before You Sign a Solar Subscription

Net metering is an arrangement between solar energy system owners and utilities in which the system owners are compensated for any solar power generation that is exported to the electricity grid. The name derives from the s, when the electric meter simply ran backwards when power was being exported, but it is rarely that simple today. Whether or not your solar system qualifies for net metering payments depends on policies and practices in your state and electric utility. Your local electric utility would be a good place to source information on net metering in your service area. When researching net metering policies and practices in your service area, there are some basic questions to consider, such as availability in your service area, eligible system size and customer type, rates, and design of bill credits.

Storage refers to energy storage, most often in the form of batteries. Installing energy storage with a solar system can help utilize the power generated when it’s needed most, regardless of whether it’s sunny outside at the time. Storage allows you to save that energy and use it later in the day, like when you turn the heat on at night or run the dishwasher after dinner or even when the power goes out. Ask your solar installer if they offer battery storage options and learn more about storing solar energy.

The amount of money you can save with solar depends upon how much electricity you consume, the size of your solar energy system, if you choose to buy or lease your system, and how much power it is able to generate given the direction your roof faces and how much sunlight hits it. Your savings also depend on the electricity rates set by your utility and how much the utility will compensate you for the excess solar energy you send back to the grid. Check the National Utility Rate Database to see current electricity rates in your area.

In some cities around the country, solar is already cost competitive with the electricity sold by your local utility. The cost of going solar has dropped every year since , a trend researchers expect to continue. Not only are the prices of panels dropping, so are the costs associated with installation, such as permitting and inspection—also known as “soft costs.” All of SETO's funding programs are working toward improving the affordability of solar and making it easier for consumers to choose solar.

It should also be noted that energy efficiency upgrades complement solar energy economically. By using Energy Star appliances and other products in your home, you’ll need less solar energy to power your home.

Consumers have different financial options to select from when deciding to go solar. In general, a purchased solar system can be installed at a lower total cost than system installed using a solar loan, lease, or power purchase agreement (PPA).

If you prefer to buy your solar energy system, solar loans can lower the up-front costs of the system. In most cases, monthly loan payments are smaller than a typical energy bill, which will help you save money from the start. Solar loans function the same way as home improvement loans, and some jurisdictions will offer subsidized solar energy loans with below-market interest rates, making solar even more affordable. New homeowners can add solar as part of their mortgage with loans available through the Federal Housing Administration and Fannie Mae, which allow borrowers to include financing for home improvements in the home’s purchase price. Buying a solar energy system makes you eligible for the Solar Investment Tax Credit, or ITC. In December , Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in -, and 22% for systems installed in . The tax credit expires starting in unless Congress renews it. Learn more about the ITC.

Solar leases and PPAs allow consumers to host solar energy systems that are owned by solar companies and purchase back the electricity generated. Consumers enter into agreements that allow them to have lower electricity bills without monthly loan payments. In many cases, that means putting no money down to go solar. Solar leases entail fixed monthly payments that are calculated using the estimated amount of electricity the system will produce. With a solar PPA, consumers agree to purchase the power generated by the system at a set price per kilowatt-hour of electricity produced. With both of these options, though, you are not entitled to tax benefits since you don’t own the solar energy system.

Navigating the landscape of solar financing can be difficult. The Clean Energy States Alliance released a guide to help homeowners understand their options, explaining the advantages and disadvantages of each. Download the guide.

DSIRE is the most comprehensive source of information on incentives and policies that support renewable energy in the United States. It is operated by the N.C. Clean Energy Technology Center at N.C. State University and was funded by the U.S. Department of Energy. By entering your zip code, DSIRE provides you with a comprehensive list of financial incentives and regulatory policies that apply to your home. Additionally, an experienced local installer should be able to assist you in claiming any state and local incentives, as well as the ITC. 

If you want to learn more about state and federal solar policies regarding incentives and tax breaks, the Solar Power in Your Community guidebook (PDF) has a section—Appendix A on page 87—that explains it in detail.

Buying a solar energy system will likely increase your home’s value. A recent study found that solar panels are viewed as upgrades, just like a renovated kitchen or a finished basement, and home buyers across the country have been willing to pay a premium of about $15,000 for a home with an average-sized solar array. Additionally, there is evidence homes with solar panels sell faster than those without. In , California homes with energy efficient features and PV were found to sell faster than homes that consume more energy. Keep in mind, these studies focused on homeowner-owned solar arrays.

When it comes to third-party owned (TPO) systems, data shows that while they add some complexity to the real estate transaction, the overall impacts in terms of sales price, time on market, agreement transfers, and customer satisfaction are mostly neutral. In some cases, TPO systems can even add value.

The PV Value® tool is helpful for both home sellers and homebuyers. It calculates the energy production value for a PV system and is compliant with Uniform Standards of Professional Appraisal Practice and has been endorsed by the Appraisal Institute for the income approach method. Make sure your appraiser uses this tool to get the most accurate estimate of your PV system’s value.

There are two primary technologies that can harness the sun’s power and turn it into electricity. The first is the one you’re likely most familiar with – photovoltaics, or PV. These are the panels you’ve seen on rooftops or in fields. When the sun shines onto a solar panel, photons from the sunlight are absorbed by the cells in the panel, which creates an electric field across the layers and causes electricity to flow. Learn more about how PV works.

The second technology is concentrating solar power, or CSP. It is used primarily in very large power plants and is not appropriate for residential use. This technology uses mirrors to reflect and concentrate sunlight onto receivers that collect solar energy and convert it to heat, which can then be used to produce electricity. Learn more about how CSP works.

Absolutely! All solar panels meet international inspection and testing standards, and a qualified installer will install them to meet local building, fire, and electrical codes. Also, your solar energy system will undergo a thorough inspection from a certified electrician as part of the installation process. 

A working PV panel has a strong encapsulant that prevents chemicals from leaching, similar to how defroster elements are sealed in a car windshield. Occasionally, a solar panel may break due to weather or other events. According to the International Energy Agency Photovoltaic Power Systems Technology Collaboration Program, any lead and cadmium exposure from broken solar panels in residential, commercial, and utility-scale systems would be below the acceptable limit set by the U.S. Environmental Protection Agency for soil, air, and groundwater.

Residential Consumer Guide to Solar Power – In an effort to make going solar as effortless and streamlined as possible, the Solar Energy Industries Association developed this guide to inform potential solar customers about the financing options available, contracting terms to be aware of, and other useful tips.

A Homeowner’s Guide to Solar Financing: Leases, Loans and PPAs – This guide from the Clean Energy States Alliance helps homeowners navigate the complex landscape of residential solar system financing. It describes three popular residential solar financing choices and explains the advantages and disadvantages of each, as well as how they compare to a direct cash purchase.

Solar PV Project Financing: Regulatory and Legislative Challenges for Third-Party PPA System Owners– Third-party owned solar arrays allow a developer to build and own a PV system on a customer’s property and sell the power back to the customer. While this can eliminate many of the up-front costs of going solar, third-party electricity sales face regulatory and legislative challenges in some states and jurisdictions. This report details the challenges and explains alternatives.

A Beautiful Day in the Neighborhood: Encouraging Solar Development through Community Association Policies and Processes – This guide, written for association boards of directors and architectural review committees, discusses the advantages of solar energy and examines the elements of state solar rights provisions designed to protect homeowner access to these benefits. It then presents a number of recommendations associations can use to help bring solar to their communities.

Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes – This report from Lawrence Berkeley National Laboratory finds that home buyers are consistently willing to pay premiums of approximately $15,000 for homes that have solar across various states, housing and PV markets, and home types.

Residential Solar-Adopter Income and Demographic Trends – This report from Lawrence Berkeley National Laboratory finds that while solar adoption skews toward high-income households, low- and moderate-income households are also adopting, and that the rooftop solar market is becoming more equitable over time.

Learn more about the solar office's accomplishments.

Understanding solar panel costs is a key step in deciding whether solar is the right investment for your home or business. Based on our survey of 1,000 solar customers, the national average price for a single solar panel professionally installed is $1,200. This means most full-size systems of between 20 and 30 panels cost between $24,000 and $36,000.

In this guide, we break down everything you need to know, from the average cost of solar panels and installation to the factors that affect pricing and potential savings over time. Whether you’re just starting your research or ready to compare quotes from the best solar companies, this guide will help you make an informed, confident decision about going solar.

Compare Top Solar Companies

Blue Raven Solar tops our list of the best solar companies thanks to its top-performing solar panels and competitive pricing. Learn more about our top picks for solar installation in the table below.

Company Star Rating BBB Rating Warranties Blue Raven SolarRead Our Review4.7/5A+25-year panels, 10-year workmanship Venture SolarRead Our Review4.8/5A+25 years Solar Energy WorldRead Our Review4.4/5A+25–30 years 4.9/5A+25-year panels, 10-year workmanship

What Is the Average Cost of Solar Panels?

On average, residential solar installations range from $24,000–$36,000 after applying federal tax credits. A 15,900 kilowatt-hour (kWh) system of 18–34 panels for a standard three-bedroom home costs an average of $24,222, according to our survey.

However, solar costs can vary widely depending on where you live. For instance, states like California and New York often have higher prices due to labor rates and stricter building codes, while states such as Texas and Florida tend to offer more affordable installation options. Understanding these regional differences can help you better estimate your potential investment.

Key Factors Influencing Solar Panel Installation Costs

The cost of going solar can vary widely from home to home because several key factors come into play. Understanding what affects solar panel installation costs will help you get the most accurate estimate for your property and potentially save you thousands in the process.

Here’s a detailed cost breakdown for a standard residential solar installation according to a report from Solar Energy Industries Association (SEIA), the U.S. Department of Energy, and our survey data:

Type of Panel

The type of solar panel you choose significantly impacts both cost and performance. There are three main types used in residential systems:

• Monocrystalline: Monocrystalline solar panels are made from single-crystal silicon. They offer the highest efficiency rates, around 15%–22%, and the longest lifespan. Their higher cost reflects their superior performance and smaller footprint needed to generate the same amount of power. They’re great for homes with limited roof space.
• Polycrystalline: Polycrystalline solar panels are made from multiple silicon crystals. These panels provide solid performance at a more accessible price point. Their efficiency ranges from 13%–17%, making them a popular choice for homeowners seeking a balance between cost and output.
• Thin-film: Thin-film panels are lightweight and versatile but less efficient. They’re typically used in large-scale or specialty applications.

For example, a 6 kilowatt (kW) monocrystalline system may cost around $1,000–$2,000 more than a polycrystalline system but could generate more power in a smaller footprint.

Get an idea of what solar panel might work best for your home using the table below.

Home Size

Larger homes usually require more power, which means larger systems and higher costs. Roof space, shape, and orientation also matter.

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Want more information on custom solar panels? Feel free to contact us.

Annual Energy Usage

Your current electricity consumption plays a big role in determining your system size. The more energy you use, the larger and more expensive your solar setup will need to be.

• Low usage (<8,000 kWh/year): May need a 5–6 kW system
• Average usage (8,000–12,000 kWh/year): Often requires a 7–10 kW system
• High usage (>12,000 kWh/year): May require a 10–12 kW+ system

Review your utility bills from the past 12 months to determine your average kWh usage.

Equipment Selection

While solar panels are the star of the show, the supporting equipment, like inverters, racking systems, and monitoring technology, plays a major role in your system’s performance, longevity, and overall cost. Choosing the right components can increase energy output, reduce maintenance needs, and improve your long-term savings.

Inverters convert solar energy into usable electricity. You’ll typically choose from these types:

• String inverters ($1,000–$3,000)*: The most affordable type of inverter, but system-wide performance can drop if one panel is shaded.
• Microinverters ($2,700–$10,200): Microinverters are installed on each panel and ideal for roofs with shade or complex layouts, but cost more than string inverters.
• Power optimizers ($900–$6,800) : Optimizers work with string inverters to improve individual panel performance, with mid-range costs.

Other important solar system components include the following:

• Mounting systems ($2,400–$2,800): Standard roof mounts are cost-effective, but custom or ground mounts add hundreds of dollars to system installations.
• Monitoring tech ($300–$800): Basic systems track overall performance, but advanced options offer real-time, panel-level data.
• Premium equipment: Investing in premium equipment comes with higher upfront costs but longer warranties of 10–25 years, better efficiency, and durability.

Note: The pricing information in this section was based on cost data from EnergySage and Angi.

Installation Requirements

Every roof is unique, and that can have a big impact on the overall cost of your solar panel installation. More complex roof types often require additional labor, specialized hardware, or structural adjustments, all of which can drive up costs. For example, tile or metal roofs may need extra mounting equipment to install the panels safely and securely.

The pitch and layout of your roof also play a role. Steep slopes or multi-level designs can make installations more time-consuming and labor-intensive. In some cases, especially with older homes, structural reinforcements or electrical upgrades may be necessary to ensure the roof can support the system safely.

Location and Local Incentives

Your location plays a big role in determining how much you’ll pay when going solar. In general, urban areas tend to have higher labor and permitting costs due to stricter building codes, higher wages, and more complex utility interconnection processes. In contrast, rural areas may offer lower installation costs, but they can sometimes lack access to experienced installers or streamlined permitting, which could delay the process.

In addition to cost differences, where you live also affects the availability and value of solar incentives. States like California, New York, and Massachusetts offer strong incentives but also come with higher overall installation costs. Meanwhile, Texas, Florida, and Arizona tend to have lower costs and growing solar markets, though incentives may vary.

Homeowners should also look into local programs such as state tax credits, utility rebates, net metering policies, and Solar Renewable Energy Certificates (SRECs), which can significantly boost savings. To learn what’s available in your area, check out the DSIRE database, a free, comprehensive resource for solar incentives by state.

Solar Batteries

A single solar battery typically costs, on average, $5,097, depending on capacity, type, and brand.* For whole-house backup systems with more than 25 kWh capacity, costs can exceed $25,000, not including installation.

The price varies significantly based on storage capacity and brand. Popular options, like the Tesla Powerwall, cost around $11,500 with installation, while premium systems like the Enphase IQ Battery can cost upward of $11,000 before installation costs.

While batteries add substantially to your initial investment, they can provide valuable backup power during outages and help maximize your solar system’s efficiency by storing excess energy for use during peak rate periods or nighttime hours.

*Based on our survey of 1,000 home solar customers, which included 279 solar battery customers. 

Additional Cost Considerations

In addition to the major cost drivers of a solar installation, several smaller expenses can still affect your overall budget. These may not be deal-breakers, but it’s important to account for them early in the planning process.

• Advanced monitoring systems: Upgrading from basic monitoring to advanced, panel-level monitoring will add to your upfront costs, but it allows you to track performance, detect issues early, and optimize energy production.
• HOA requirements: If you live in a community with a homeowners association, you may need to meet specific aesthetic or placement guidelines. This could require custom panel layouts or additional screening, which would add to your project costs.
• Home insurance adjustments: Adding solar panels may slightly increase your insurance premium, depending on your provider and system size. However, most policies cover solar panels as part of the home’s structure.
• Permit and inspection fees: Local governments charge permitting and inspection fees that vary widely by location. These can range from $100 in smaller towns to over $1,000 in larger cities with more complex regulations.
• Tree removal or trimming: Shading can significantly reduce solar efficiency. If trees block sunlight from reaching your roof, professional tree removal or trimming services can add to your total costs, depending on the size and number of trees.

How Much Do Solar Panels Cost by State?

Solar panel costs can vary dramatically by state due to several key factors: local labor and permitting costs, state-specific incentives and regulations, and varying levels of market competition among installers. These differences lead to price swings, with northeastern states like Massachusetts and New York typically seeing higher installation costs and southern states like Texas and Florida seeing lower rates.

Financing Options for Solar Panels

Solar panels are a long-term investment, and the good news is you don’t have to pay for everything upfront. There are several flexible financing options available to help homeowners make the switch to solar without breaking the bank. Choosing the right solar financing method can significantly impact your overall savings and return on investment.

• Cash purchase: Paying upfront in full gives you complete ownership of the system and the highest long-term savings. You’ll qualify for all tax credits and incentives, and you won’t pay interest or monthly fees. However, it requires a significant upfront investment.
• Solar loans: A solar loan lets you spread the cost over time while still owning the system and benefiting from tax incentives. Monthly payments are usually fixed, and many loans require little to no money down. Keep in mind that interest charges may reduce your overall savings.
• Solar leases: With a solar lease, you rent the solar system for a set monthly fee, usually with little or no upfront cost. The installer owns and maintains the system, and you benefit from lower utility bills. However, you won’t own the system or qualify for tax credits, and long-term savings are typically lower.
• Power purchase agreements (PPAs): PPAs allow you to pay only for the electricity the system generates, often at a rate cheaper than your local utility. Like leases, there’s little to no upfront cost and no maintenance responsibility, but you don’t own the system, and contracts can last 20 years or more.

Return on Investment and Payback Period

One of the most common questions homeowners have is: When will my solar panels pay for themselves? While the exact timeline varies based on factors like system cost, energy usage, local utility rates, and available incentives, most homeowners see a payback period of 6–10 years. Over a 25-year system lifespan, that can translate to total savings of $15,000–$40,000 or more, especially in areas with high electricity costs and strong local incentives.

Several factors can accelerate your solar payback period, including high local utility rates, south-facing roofs with minimal shading, and low- or no-interest financing options. For example, a California homeowner who installs a $20,000 solar system and takes advantage of the 30% federal tax credit would reduce their net cost to $14,000. With average annual savings of around $1,800 on electricity, that system would pay for itself in less than eight years and continue generating free power for many more.

How Can I Save Money on Solar Panels?

Going solar is a smart financial move, but it’s even smarter when you know how to maximize your savings. From federal tax credits to local rebates and smart shopping strategies, there are several ways homeowners can cut costs and get the best return on their solar investment.

Solar Incentives and Rebates

One of the most effective ways to reduce your upfront cost is by taking advantage of solar incentives at the federal, state, and local levels.

• Federal solar tax credit (ITC): This is the most valuable incentive available. It allows you to deduct 30% of your total solar installation cost from your federal income taxes. For example, if your system costs $18,000, you could claim a $5,400 credit, bringing your net cost down to $12,600.
• State and local incentives: Many states and municipalities offer additional rebates, property tax exemptions, or solar renewable energy credits (SRECs). For example, New York offers up to $5,000 in state tax credits, and some cities in California provide additional cash-back rebates.
• Net metering: This billing arrangement allows you to earn credits for excess electricity your system sends back to the grid. Those credits can offset your electricity use at night or during cloudy days, lowering your monthly utility bill.

Additional Ways To Save

Beyond incentives, there are smart strategies that can help you save even more on your solar panel installation.

• Bundle with other upgrades: Some homeowners save money by combining solar with other home improvements like a new roof or energy-efficient upgrades, which may qualify for additional rebates.
• Choose the right system size: Bigger isn’t always better. An oversized system can lead to unnecessary costs. A professional installer can help you match system size to your actual energy needs.
• Compare multiple quotes: Always get at least three estimates from reputable installers. Prices can vary by thousands of dollars for the same system size, depending on the company and equipment used.
• Use solar loans wisely: If you’re financing, look for solar-specific loans with low interest rates and no prepayment penalties. The lower the interest, the more you save over time.
• Time your purchase: Solar installation costs tend to fluctuate throughout the year. Off-season months (like winter in many regions) can sometimes come with discounts or promotional offers.

Are Solar Panels Worth It?

For most homeowners, solar panels are worth it. Thanks to the 30% federal tax credit, state and local incentives, and rising electricity rates (currently averaging 15.95 cents per kWh nationwide), solar systems can save you around  $42,376 over 25 years.*

If you live in a high-cost electricity state like California, where rates can top 30 cents per kWh, the financial benefits grow even stronger, especially if your household uses more than 900 kWh per month or enjoys consistent sun exposure.

But solar offers more than just savings. It provides real, lasting value in several key ways:

• Energy independence: By producing your own electricity, you’re less affected by utility rate hikes and peak pricing. This is especially useful during energy shortages or high-demand seasons.
• Environmental benefits: A typical residential solar system reduces carbon emissions by 3–4 tons per year, which is like planting 100 trees annually. That’s a meaningful contribution to cleaner air and a healthier planet.
• Increased home value: Studies show homes with solar panels typically sell for 4% to 6% more, adding around $15,000 in value for the average U.S. home. Unlike other upgrades, solar tends to retain its value well over time.
• Reliable performance: Most panels come with 25-year warranties and still produce 85% or more of their original power output after two decades, giving you consistent returns year after year.

That said, solar isn’t right for everyone. It may not be the best fit if your roof is heavily shaded or needs replacement soon or if you plan to move within five years. Also, homes in areas with very low electricity rates or with minimal energy usage may see slower payback periods.

Still, for the vast majority of homeowners, the financial and environmental payoff makes solar well worth the cost and a solid investment in your home’s future.

*Cost data is based on reports from the U.S. Energy Information Administration and uses the consumption of 10,632 kWh per year to calculate the savings.

Survey Insights from Solar Customers

In , we surveyed 1,000 home solar customers across the U.S. to understand their experience shopping for and installing solar panel systems. Most homeowners said they paid around $16,129 for a solar panel system, with an average of 14 solar panels installed.

While Sunrun was the most popular provider in our survey, many respondents reported choosing a local or regional installer rather than a large, national company. Additionally, 53% of respondents claimed they wanted solar panels to reduce power bills, and most reported an average decrease of $14 per panel, translating to $196 saved on monthly utility costs.

What Are the Hidden Costs and Downsides of Going Solar?

While solar panels offer great long-term savings and environmental benefits, it’s important to understand the less visible costs and considerations that can affect your overall investment. These aren’t deal-breakers for most homeowners, but knowing about them upfront helps you plan more effectively and avoid surprises down the road.

Here are some common hidden costs and potential drawbacks to keep in mind:

• Insurance adjustments: Adding solar may increase your homeowners insurance premiums slightly, depending on your provider. Some insurers might also require you to add a rider to cover the solar equipment fully.
• Maintenance needs: Solar panels are low-maintenance, but occasional professional cleaning and inspections, usually once or twice a year, can help maintain peak efficiency. Skipping this care may lead to gradual performance loss over time.
• Permits and HOA requirements: Beyond standard permit fees, HOAs or local code requirements may call for additional costs, like custom mounting, visual screening, or system changes to meet aesthetic or structural guidelines.
• Roof repairs: If you need to repair or replace your roof after the panels are installed, the panels must be removed and reinstalled, adding anywhere from $1,000 to $3,000+ to your roofing project. That’s why many installers recommend addressing any roofing issues before going solar.

Expert Insights

“If your home is located in an area with low solar access or if your home is shadowed by trees or buildings for much of the day, you probably won’t make back the investment on the electricity you generate. If you already consume low amounts of electricity (or if you consume a high amount), switching to solar might offer smaller savings, and so require a longer payback period.” —Mark McShane.

McShane is a solar industry professional and entrepreneur. He owns Skills Training Group, a company focused on producing high-quality solar technicians. He also runs Solar Panel Quote Online, a site that provides impartial advice and information to homeowners and businesses considering installing solar.

We consulted additional experts for insight into the benefits of solar energy, the affordability of solar panels, and advancements in solar technology. See their insights below.

FAQs About Solar Energy Costs

How much does it cost to own a solar panel?

The ongoing cost of owning solar panels is relatively low compared to the initial investment. After installation, you can expect to spend approximately $150–$300 each year on panel maintenance and monitoring. This annual expense covers occasional system inspections, basic cleaning, and performance monitoring.

What is the cost of one solar panel?

Based on our survey of 1,000 solar customers, the national average price of a single solar panel professionally installed is $1,200. Note that this figure includes installation, mounting, and electrical work and not just the panel itself.

How much is a solar system for a 2,000-square-foot house?

Sizing a solar system requires a clear understanding of your home’s energy consumption, rather than solely relying on its square footage. On average, the cost of a solar system for a 2,000-square-foot house is around $13,075, which includes a 30% reduction from the solar tax credit. Without incentives, the typical costs go from approximately $19,200–$22,000.

Your actual solar energy needs will vary based on several factors, including your home’s energy efficiency, number of occupants, appliance usage habits, and the local climate. For example, a 2,000-square-foot home in Arizona with central air conditioning year-round will require a much larger solar system compared to a similar-sized home in Vermont that relies on efficient heating for part of the year.

Is solar really worth the money?

For homeowners, solar panels can offer a smart financial investment, primarily due to the 30% federal tax credit, which significantly lowers costs. With current average electricity rates at 15.95 cents per kWh, which is projected to rise by 2.5% annually, solar enables you to secure lower utility costs for 25 years. Over the system’s lifetime, typical power bill savings can reach approximately $42,376, based on our team’s calculations.

In high-cost areas like California, where rates can exceed 30 cents per kWh, the value of each kWh of clean energy produced is even greater, especially for households using over 900 kWh of electricity monthly. This underscores that solar panels not only offer immediate tax benefits but also protect against rising utility costs. The focus shifts from whether solar pays off to how quickly you can recoup your investment and the savings over time.

How long does it take to recover the cost of solar panels?

The timeline for when homeowners begin to see a return on their solar energy investment can vary depending on factors such as your system cost, energy consumption, local utility rates, and available incentives. However, most homeowners experience a payback period of 6–10 years. Considering solar panels last 25–30 years, solar system owners can continue to save money on power bills for over a decade after their payback period ends.

How We Determined Solar Panel Pricing

To provide the most accurate and current pricing for solar panel systems, we conducted in-depth market research by surveying 1,000 solar customers nationwide and analyzing industry reports. Our survey data offered insights into what homeowners have paid for solar panel systems, preferred financing methods, and popular add-ons. We also included pricing information obtained from reports by the SEIA and U.S. Department of Energy, as well as market resources like EnergySage and Angi. This wide lens allows our cost averages to reflect a comprehensive view of national pricing across the solar industry.

Prices shared in this guide represent the average cost of equipment and labor based on our research at the time of publication. Actual costs may vary depending on factors such as your location, solar installer, system size, equipment quality, and project scope.

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