Residential solar energy systems have never been more affordable, accessible, efficient, and resilient. Over the past decade, the prices of solar photovoltaic (PV) panels have dropped by almost 50%, while solar panel manufacturing and installation processes have evolved and improved significantly.
Modern residential solar panels feature advanced technology that maximizes power production. And as more and more people lean towards cleaner and much greener sources of energy, the adoption of solar energy has seen a dramatic increase.
According to a Pew Research Centre survey, 6% of homeowners in the United States have already installed solar panels in their homes, while another 46% are seriously considering having them installed. This means that more than 7 million households in the US are already using solar energy. This number is expected to grow massively in the near future.
If you are considering installing solar panels for your home, then understandably, you might be having a lot of questions. Fortunately, this page is designed to provide you with answers to all your frequently asked questions regarding solar installation, solar technology, and solar economics.
- 1 How Much Do Solar Panels Cost?
- 2 How Much Money Can I Save with Home Solar Panels and Net Metering?
- 3 When Will a Home Solar Panel System Break Even?
- 4 What Rebates, Tax Credits, and Other Solar Incentives Are Available?
- 5 Are Solar Panels Worth It?
- 6 How Many Solar Panels Do I Need to Run My Home?
- 7 Do I Need a Solar Battery?
- 8 Are There Home Solar Financing Options?
- 9 What Are the Best Brands of Solar Panels for Home Use?
- 10 What Are the Best Types of Solar Panels for Your Home?
- 11 How Long Do Solar Panels Last?
- 12 Can I Install My Own Solar Panels?
- 13 What Are the Different Types of Home Solar Systems?
- 14 Conclusion
How Much Do Solar Panels Cost?
How much your solar energy system will cost you will vary significantly depending on several factors, including its size, type of financing or leasing, solar permitting fees, local costs of labor, and any available incentives.
The Solar Energy Industries Association (SEIA) suggests that the average cost of installing a home solar energy system is $3 per watt – without taking into account the federal tax credit or other additional incentives. This means that an average residential 5kW size solar system can cost you around $15,000. When the 26% federal tax credit is applied, the price drops to $11,100.
How Much Money Can I Save with Home Solar Panels and Net Metering?
Regarding solar panels, savings refer to the amount of money you would have spent on your electricity bills if you didn’t have the solar energy system.
The average American household consumes 10,694 kilowatt-hours (kWh) per year, and given that the national average electricity rate is $0.13 per kWh, a typical family spends around $1,390 annually on electricity bills.
Savings Through Net Metering
Keep in mind that you will still be connected to the electric grid even after solar installation. Net metering is a billing mechanism offered by utility companies to credit solar system owners for the electricity they contribute to the grid.
During the daytime, the solar systems typically generate a full day’s worth of electricity. The excess energy not used during daylight hours will be sent to the grid, causing your meter to spin backwards. This excess energy will be converted into credit form by the utility company.
Thus, if you need to tap into the electric grid at night or when your system isn’t producing sufficient power, you will be given the credits back. Your electricity meter will track the amount of energy you’ve contributed to the grid and the amount you’ve taken back.
This means that if the amount of energy you’ve consumed in a year is the same or less than that produced by your system, you will pay $0 in electricity bills.
If there were no net metering, you would be forced to pay for any energy you consume from the electric grid and wouldn’t get anything from the extra power you generate.
When Will a Home Solar Panel System Break Even?
Figuring out how long it will take you to break even on your solar panel system investment can be a bit complicated as numerous factors are involved. However, it is possible to get a rough estimate since these factors have been well-established.
Factors That Effect the Total Cost of Installing a Solar Panel System
Value of Financial Incentives
Rebates, tax breaks, tax exemptions, and performance payouts can significantly reduce the overall cost of acquiring solar energy.
The Price of Electricity in Your Region
The higher the utility price, the more cost savings you will gain.
Amount of Electricity Produced On-site
Factors such as local climate effects, roof orientation, equipment choice, etc., can affect the amount of electricity your system. If you produce significantly lower amounts than your energy requirements, it will take longer to break even.
The higher your electricity requirements and bills are, the shorter your payback period will be, provided you are producing an amount the same as or close to your energy requirement.
The average solar payback period is between 4 and 10 years.
What Rebates, Tax Credits, and Other Solar Incentives Are Available?
These will vary depending on the state and where you live. However, the most important one is the federal tax credit. As of 2021, the federal tax credit allows solar system owners to deduct 26% of their system’s cost from their taxes.
Some states offer a market-based incentive known as Solar Renewable Energy Credits (SRECs), which earns you one credit every time you generate 1000 kWh.
Some states like New Jersey provide performance-based incentives that earn solar system owners some extra cash for their systems’ energy.
There are many other additional incentives provided by various states and municipalities, including property tax credits, additional state tax credits, rebates, grants, and financing programs.
Are Solar Panels Worth It?
Generally, whether investing in a solar energy system will be worthwhile for you or not will depend on factors such as the total solar installation costs, your location, and electricity usage.
However, most homeowners agree that investing in a solar energy system is one of the best decisions they ever made for their homes.
Also, consider this, on average, a solar system offers a return on investment of between 10-15%. In comparison, an investment in the stock market provides a return on investment of 9.5%, making it a slightly better option.
Real estate experts suggest that a solar energy system can significantly enhance the value of a home. If you are looking to put your house on the market anytime in the future, it is bound to sell fast and fetch a great price.
Besides, by choosing to invest in an eco-friendly energy source, you will be greatly helping the environment.
How Many Solar Panels Do I Need to Run My Home?
The number of solar panels needed will heavily depend on your household’s energy requirements, the type and quality of equipment you choose, and the amount of sunlight your home gets.
If you have high energy requirements, your area doesn’t get enough sunlight or have low-wattage solar panels, you will need more solar panels.
It takes about 28-34 panels to cover the total electricity usage of an average American home.
Do I Need a Solar Battery?
If you live in a state that doesn’t have net metering or in an area that frequently experiences grid power outages, it makes a lot of sense to invest in a solar battery.
But you should note that this addition will increase the overall cost of your system. Fortunately, some states also offer incentives in regards to solar batteries.
Are There Home Solar Financing Options?
Buying your solar energy system outright is often considered the best option as it offers you the most benefits in terms of energy bill savings and solar incentives. However, a solar energy system is by no means cheap, and this can be a hindrance to many interested homeowners.
Fortunately, there are a few home solar financing options to help you overcome this:
Many solar financing companies provide zero down loans at very low interest rates. With solar loans, you get to own the system and benefit from the tax credits and incentives.
Solar Leases and Power Purchase Agreements (PPAs)
This is the same as renting the solar system. After signing a contract with the solar leasing company, you will be entitled to use the system. Still, you won’t own it, meaning you aren’t entitled to tax benefits and other incentives.
In the long-term, you will achieve much lower energy cost savings compared to buying with cash or through a loan. Perhaps the only advantage is that you don’t have to deal with the upfront and maintenance costs.
What Are the Best Brands of Solar Panels for Home Use?
There are many companies out there currently making solar panels. However, only a few have stood in terms of producing high-quality solar panels. Some of these top solar panel brands include:
However, due to their position in the market, the above brands come with high price tags. You can still find quality solar panels from tier-1 manufacturers at a more affordable price. These include:
- Q CELLS
- Canadian Solar
- Trina Solar
What Are the Best Types of Solar Panels for Your Home?
When it comes to residential solar panels, monocrystalline solar panels are the most popular type. This is mainly because they have a much higher efficiency rating, and they achieve a more uniform look, making them an excellent choice for homes.
What’s more, they have significantly decreased in price over the years, making them more affordable and accessible to the average homeowner.
How Long Do Solar Panels Last?
Solar panels are known to have a very long service life. Most of the top brands provide a warranty of at least 25 years. However, the panels can continue working and properly for way longer than that.
It is reported that the first modern solar panel is still converting solar energy into electricity 60 years later. This essentially means that your system can potentially serve your home for your entire lifetime.
Can I Install My Own Solar Panels?
Yes, if you are considering DIY solar panel installation, you are free to do so. It is ideal for those who prefer undertaking home improvement projects on their own or want to minimize solar installation costs.
However, it would be best if you kept in mind that DIY solar installation comes with its fair share of risks and downsides.
First, there are the dangers involved when working on a roof, especially if it is high. Secondly, trying to install the solar system on your own can void your warranty. Some utilities do not permit DIY solar installation in the first place. You may also not qualify for certain incentives.
What Are the Different Types of Home Solar Systems?
There are three main types of residential solar systems. But first, it is important to note that all solar photovoltaic systems have the same essential components (solar panels, solar inverters, and racking equipment). They all have the same purpose – to convert solar energy into electricity.
With that being said, the significant difference in the following three types of residential solar systems lies in how closely they are linked to the traditional power utility infrastructure, also referred to as the grid.
Grid-tied Solar Systems
Grid-tied solar systems are the most prevalent type of residential solar system. In this type of system, the solar panels are connected to the power utility grid.
When the solar panel produces more energy than the household requires, the excess energy is sent to the power grid. And when solar electricity production is low, the home utilizes power from the grid.
Hybrid Solar Systems
In Hybrid solar systems, the solar panels are connected to both the power grid and the battery. When there is excess energy, it is directed to the battery, where it is stored for later use.
Besides providing energy when solar energy production is low, hybrid solar systems can also be used as a backup power supply during blackouts. These systems are particularly popular in areas where there is no net metering and frequent blackouts.
Off-grid Solar Systems
As the name suggests, off-grid solar systems aren’t connected to any power utility infrastructure. They are ideal for homes in remote locations, which explains why they are quite rare.
To ensure sustainability and reliability, these systems are made up of large solar systems and large-capacity batteries.
Hopefully, this article has helped answer some of the most pressing questions you previously had about your home’s solar panels.
As you can see, there are many reasons why solar panels are a worthwhile investment in today’s world. Instead of dealing with unnecessarily high electricity bills and frequent blackouts, why not produce your own renewable energy while still helping the environment?