How Much Are Solar Panels for My Home?

What's the Price? 

Embarking on the journey of solar energy for your home brings forth a world of benefits and some queries, with the cost being at the forefront. The investment in solar panels is not only a step towards sustainable living but also a significant financial decision. In this blog post, we'll explore the pricing landscape for solar panels, touching on the national average price per watt, the average system size costs, and how federal tax credits can make solar more affordable.

National Average Cost

The Solar Energy Industries Association reports that installing an average-sized residential solar system typically costs around $25,000 before any government tax incentives. However, prices can vary widely, with home services booking site Angi noting that the range for solar panel installation in the U.S. can span from approximately $18,000 to $36,000 based on its database of completed projects.

Cost Per State

The cost of solar panel systems varies significantly by state, reflecting differences in market conditions, sunlight exposure, and state incentives. For instance, the price for a 6kW system ranges from $14,100 in Arizona to $21,240 in Tennessee, with the cost per watt accordingly adjusting from $2.35 to $3.54. These variances highlight the importance of considering local pricing dynamics when planning a solar installation.

Calculating Total Price

To determine the total cost of solar panels for your home, understanding the national average price per watt is crucial. Prices for solar installations are generally between $2.50 and $3.50 per watt, depending on factors such as the cost of materials and labor. For an average system size, like 6kW (or 6,000 watts), this translates to a total cost range of $15,000 to $21,000 before any tax credits or incentives.

Price vs. Cost 

Navigating the solar market reveals a crucial distinction between the initial price and the long-term cost of solar systems. While some systems might come with a higher upfront price, factors like extended warranties, superior quality components, and better performance can lead to lower lifetime costs, offering greater value over time. Conversely, lower-priced systems may seem attractive initially but can incur higher costs throughout their lifespan due to less efficient performance, increased maintenance, and shorter warranty periods. This highlights the importance of evaluating the total cost of ownership when investing in solar energy, ensuring that homeowners achieve the best long-term value for their investment.

Understanding Dealer Fees and Financing

When exploring solar for your home, it's vital to consider the financial intricacies, including Dealer Fees and the cost implications of financing. Dealer Fees, often overlooked, can significantly affect the total investment in your solar system. Moreover, financing your solar system, while making it accessible, comes with a premium. Opting for a financed solar system can add a 15-30% premium to the overall cost compared to a cash purchase. This premium highlights the importance of thorough financial planning and consideration, ensuring you're equipped with all the necessary information to make the most cost-effective solar investment for your home. If you see an interest rate under the going rate for a Home Equity Line of Credit (HELOC), there is probably a dealer fee. Contact us today to find out how to tell if your installer is charging a Dealer Fee on their loans. 

Federal Tax Credit

The federal government offers a Residential Clean Energy Credit, which significantly reduces the cost of solar panels. This incentive allows homeowners to deduct 30% of the installation cost from their federal taxes. For a $25,000 system, this means a $7,500 tax credit. It's important to note that while the credit isn't refundable, it can be applied to future tax payments if not fully utilized in one year. This tax credit is available at the 30% rate through 2032, after which it will begin to decrease incrementally.

Steps to Determine Savings

Before making a decision, consider your current electricity bill, your home's sunlight exposure, and available government incentives. Reviewing your electricity bill will help you understand your potential savings, as solar panels can offset or completely eliminate this cost. Additionally, evaluate your home's suitability for solar based on sunlight exposure and roof type. At The Solar Insiders, we specialize in crafting custom, unbiased solar proposals tailored to your unique needs. Our approach begins with a thorough analysis of your utility bill to fully understand your electricity usage profile. Based on this insight, we design a personalized, unbiased solar system for your home. This detailed assessment serves as a valuable benchmark for you, ensuring that you enter consultations equipped with a dependable, impartial evaluation of what's best for your home's solar energy needs.

Comparing costs and incentives is essential for making an informed decision. Remember, the upfront cost of solar panels is offset by long-term savings on electricity bills, increased home value, and environmental benefits. Explore all purchase and leasing options, considering your financial situation and goals. We are here to help you gather and evaluate quotes for your home. 

In summary, while the cost of solar panels can vary, the investment is made more accessible through federal tax credits and state incentives. Each home is unique, and we look forward to sharing a custom system for your specific electricity profile. Reach out today for a custom system design from us here at The Solar Insider.