How Much Money Do Solar Panels Cost?
Most of us know that solar panels are a valuable addition to a home. However, solar panels come with high installation costs.
Fortunately for you, solar panels have never been more affordable than they are today. With that in mind, let’s take a look at exactly how much money solar panels cost.
The Average Cost of Solar Panels
Typically, solar panels are measured in dollars per watt. People install different-sized solar panel systems, so dollars-per-watt is a useful metric.
In 2017, the average price of a solar panel system is between $2.85 and $3.80 USD per watt, including installation and equipment.
The average price of a solar panel system before tax credits and incentives is about $17,000.
The most popular solar panel system size is 5 kW (5,000 watts). When you multiply 5,000 watts by the dollars per watt metric listed above (between $2.85 and $3.80 USD per watt), you get an average price of around $10,000 to $14,000 (after tax credits and incentives).
If that sounds like a lot of money to you, then consider this: prices have dropped 9% since last year. They’ve dropped significantly more in the past decade. A PV system that once cost $50,000 to install can now be installed for under $20,000.
The Average Cost of Solar Panels Based on the Size of your System
Obviously, bigger systems that produce more energy will always cost more. However, the more panels you install, the cheaper your dollars-per-watt rate will be. Here are the approximate average costs for solar panel systems in the United States at different popular sizes (before tax credits):
- 6kW System: $15,000
- 8kW System: $20,000
- 10kW System: $25,000
Ultimately, 5kW systems tend to be particularly popular. They’re affordable for an average homeowner, but still provide a sufficient amount of energy to substantially reduce your energy bill.
How Much Money Can You Save With Tax Credits?
We’ve gone into greater detail about tax credits in other articles on our website, so we won’t go into great detail about tax credits here.
However, you can generally expect to save about 30% off your solar panel installation costs with tax credits. Always check tax credits with your government, state, or jurisdiction. In some cases, you’re better off waiting a few months to install solar panels because a tax credit is coming next year. In other regions, governments are ending tax credit incentive programs – so you should rush to get your solar panels completed before the incentive program ends.
The Costs of Solar Panels Vary Widely By Region
Just like cost of living, the cost of solar panel installation varies widely between regions. It’s going to be more expensive to install solar panels in Hawaii than it is to install solar panels in North Carolina, for example.
Cheapest States for Solar Panel Installation
- New Jersey
- North Carolina
Most Expensive States for Solar Panel Installation
- Rhode Island
- New Hampshire
- New York
- South Carolina
All calculations above include tax incentive deductions. One state might have more expensive solar panel costs, but your solar panels are cheaper overall because of tax incentives.
How Much Does It Cost to Install a Single Solar Panel?
Many homeowners are interested in the benefits of solar energy – but can’t afford to spend $15,000 to $20,000 on an entire solar panel system.
Fortunately for these homeowners, you can buy a single solar panel or smaller systems. There’s no rule stating that you need to install a minimum 5kW system. In fact, solar panel companies can install a system as large or small as you like.
Obviously, you’re going to pay a higher cost-per-watt when installing one or two panels at a time. Expect to pay about $250 per panel, on average, across the United States, for a single solar panel (without installation). You can buy solar panels from solar companies in your city, or even from hardware and home improvement stores.
How Much Do Solar Panel Installers Pay for Solar Panels?
Up above, we mentioned that the average cost for a solar panel is about $3.20 USD per watt. However, that’s including installation.
Typically, solar panel installation companies have bulk supply deals with solar panel manufacturers. This means they can get solar panels at a price of around $0.75 per watt. If the solar panel puts out 250 watts, then the solar panel installation company may be paying about $190 for that panel.
However, if you’re buying that same solar panel for a DIY project, you’re probably going to pay about $1.25 or more per watt, or closer to $250.
Other Things to Consider When Wondering How Much Money Solar Panels Cost
Solar panel installation costs depend on a variety of factors
Efficiency: There are dozens of different solar panel manufacturers. They make solar panels with different efficiency ratings. In general, you’re going to pay more for high-efficiency solar panels.
Permits: You may have to pay a fee to add your solar energy system to the grid.
Labor: Someone (either an installation company or yourself) needs to actually install the solar panels.
Home Characteristics: Installing solar panels on a south facing roof with a gentle slope is easy. However, roofs with multiple levels, skylights, and steep slopes will have higher installation costs.
Your Best Option is to Request Multiple Solar Panel Quotes
Whether you’re ordering a kitchen renovation or solar panels, it’s always a good idea to get multiple quotes. One classic strategy is to get three quotes. Take out the cheapest quote (because the company is cutting corners somewhere) and take out the most expensive quote (because that company is charging more than necessary). Use the quote in the middle, and you can get high-quality solar panels at a reasonable price.
Obviously, this doesn’t work 100% of the time. You still need to be careful when choosing your solar panel installation company. Some companies might charge high prices for average-quality solar panels. Do your research, read reviews, and contact previous clients to get a better idea for the quality of the solar panel installation company.
Ultimately, solar panels are cheaper today than they’ve ever been in the past. It’s more affordable than ever to add solar panels to your home. However, solar panels still come with high installation costs that can make them prohibitively expensive to some owners. Make sure you get solar panel quotes before you buy to find out exactly how much money solar panels cost in your region.