Solar energy systems have been gaining popularity in the past years. With more and more homeowners getting environmentally conscious, this doesn’t come as a surprise. Still, many of those who also want to make the switch are hesitant about one thing: the cost.
In this post, we will discuss the average cost of solar panels together with other tips. If you want a more accurate estimate for your home, don’t hesitate to contact us at Local Solar Service.
Benefits of Residential Solar Panels
It’s widely known that solar energy has a lot of benefits. But if you’re a newbie who’s still undecided whether this system suits your home, the following benefits may help you choose:
- Reduced electricity bills. By generating your own electricity through the sun, you can reduce your monthly electricity bills. This results in substantial savings in the long run.
- Financial incentives. You’ll enjoy 30% tax credits when you choose to switch to solar. Aside from that, we also offer cashback up to $2,000 together with other complimentary services where you can qualify.
- Clean and renewable energy. By using solar panels, you can reduce your reliance on the grid and you also contribute to a cleaner environment. This means you’re doing your part in making the planet cleaner.
- Increase in property value. Homes with solar panels enjoy higher market values. Depending on the specific installation, up to a 20% increase in market value is possible in some cases.
- Energy independence. When you switch your home to solar, you won’t have to worry much about power outages. You can also get a battery backup where you can store excess energy for use during inclement weather.
Factors Affecting Residential Solar System Prices
While solar systems have a lot of benefits, it also comes at a price. Also, there are several factors affecting solar panel costs, including the following:
1. Size and Capacity
The size and capacity of your solar panel system directly impact the cost. Larger systems with higher capacity are more expensive but can generate more electricity, resulting in greater savings over time.
Also, the size of the system is typically measured in kilowatts (kW). This is determined based on your energy consumption and available roof space. With that, you should expect to pay more if you’re planning to install a large system.
2. Solar Panel Technology and Efficiency
The technology and efficiency of your chosen solar panels also affect the cost.
Different solar panel technologies, such as monocrystalline, polycrystalline, and thin film, have varying levels of efficiency and performance. This will directly affect the system’s cost.
In general, higher efficiency panels are generally more expensive but can generate more electricity with less space. The good thing is that you’d likely need fewer panels if you’ll go for high-efficiency ones.
3. Quality and Brand of Solar Panels
The quality and brand of your solar panels play a significant role in determining the cost. For example, established brands with a reputation for quality and reliability often come at a higher price. Still, investing in these high-quality panels ensures durability and better performance over the long term.
4. Installation Complexity and Location Considerations
The complexity of the installation process and the location of your home can also affect the cost. Also, factors such as roof type, angle, and shading need to be considered during installation. If additional work or equipment is required, it will increase the overall cost even more.
5. Additional Equipment and Components Required
In addition to the solar panels, there are several other components required for a complete solar system. These include inverters, which convert the direct current (DC) produced by the panels into usable alternating current (AC), mounting systems, wiring, and monitoring systems.
The cost of these additional components should be taken into account when estimating the overall cost.
Types of Solar Panels and Their Cost
When it comes to residential applications, you can choose from three types of solar panels.: monocrystalline, polycrystalline, and thin-film. Each type has its unique characteristics, pros, cons, and cost range.
1. Monocrystalline Solar Panels
Monocrystalline solar panels are made from a single crystal structure, which is typically silicon. Also, they are known for their high efficiency and sleek black appearance. Here are some key points about monocrystalline solar panels:
- Efficiency and Aesthetics: Monocrystalline panels have the highest efficiency rates among the three types, typically ranging from 15% to 20%. Their uniform black color also gives them a visually appealing look.
- Pros: High efficiency, long lifespan (25+ years), better performance in low-light conditions. They also require less space compared to other types.
- Cons: Higher cost compared to other types. It’s also slightly affected by shading or dirt on the panels.
- Cost Range: Monocrystalline solar panels typically fall in the higher price range due to their higher efficiency and premium aesthetics.
2. Polycrystalline Solar Panels
Polycrystalline solar panels are composed of silicon crystals. Also, they have been widely used in the residential solar industry. Here’s what you need to know about polycrystalline solar panels:
- Efficiency and Affordability: Polycrystalline panels have slightly lower efficiency rates compared to monocrystalline panels, ranging from 13% to 16%. However, they are more affordable.
- Pros: Lower cost compared to monocrystalline panels, good performance in high-temperature conditions.
- Cons: Slightly lower efficiency compared to monocrystalline panels. They require more space due to lower efficiency.
- Cost Range: Polycrystalline solar panels are generally more affordable compared to monocrystalline panels.
3. Thin-Film Solar Panels
Thin-film solar panels are produced by adding a thin layer of photovoltaic material right into glass, metal, or plastic. Also, they have unique characteristics that make them suitable for specific applications. Here’s what you need to know about thin-film solar panels:
- Flexibility and Low-Light Performance: Thin-film panels are flexible and can be integrated into various surfaces. They also perform considerably well during low-light conditions.
- Pros: Flexible and lightweight, performs better in low-light conditions.
- Cons: Lower efficiency compared to crystalline panels. It also demands more roof space due to lower efficiency. Aside from that, it has a shorter lifespan.
- Cost Range: Thin-film solar panels are generally less expensive compared to crystalline panels.
Average Residential Solar Panel Costs
The cost of installing residential solar panels can vary depending on several factors. This includes the size of the system, location, and additional equipment required. Here, we will discuss the national and regional cost averages, price per watt for residential, and more.
A. National and Regional Cost Averages
The national average cost for residential solar panel installation in the United States is around $3 to $4 per watt. However, it’s important to note that costs can vary significantly based on regional factors, including labor costs and permitting requirements.
For example, installation costs may be higher in urban areas compared to rural areas. This is mainly due to higher labor costs and more complex installations.
B. Cost per Watt Breakdown
The cost per watt is a useful metric to compare different solar panel systems you can choose from. It represents the cost of the system divided by its capacity in watts.
On average, the cost per watt for residential solar panels ranges from $2.50 to $4.50. However, it’s crucial to consider other factors such as efficiency, durability, and warranty when evaluating the cost-effectiveness of a system.
Financing Options for Solar Panels
While the estimated cost for solar panels can be intimidating for some, there are many financing options you can explore. In this section, we will discuss purchasing outright, solar loans and financing programs, Power Purchase Agreements (PPAs), and solar leases.
1. Purchasing Outright
Purchasing solar panels outright is the most straightforward and cost-effective option if you have the financial means. By paying for the system upfront, you can claim all the available tax credits. You’ll also enjoy the long-term lower costs & savings of solar panels.
However, this option requires a significant upfront investment, and the return on investment will take longer. Most homeowners don’t usually have the budget for this.
2. Solar Loans and Financing Programs
Solar loans and financing programs provide an alternative to purchasing outright. These programs allow homeowners to finance the installation cost over a set period, typically 10 to 25 years.
Here at Local Solar Service, we offer zero-down financing for your convenience. You can get your solar system with a 0% down payment for 12 months. Also, you won’t pay for anything until we’ve secured final approval and all necessary permits.
Feel free to contact us to know more about our financing solutions. We can also personalize the payment plan to match your monthly budget.
3. Power Purchase Agreements (PPAs)
Power Purchase Agreements (PPAs) are contracts between homeowners and solar installation companies or third-party providers. Under a PPA, the provider installs and maintains the solar panel system on your property at no upfront cost.
In return, you agree to purchase the electricity generated by the system at a predetermined rate for a specific period. PPAs can provide immediate savings on electricity bills without the need for upfront investment. However, it’s crucial to review the contract terms and understand the potential limitations.
4. Solar Leases
Similar to PPAs, solar leases allow homeowners to have solar panels installed on their property without any upfront cost. However, instead of purchasing the electricity, you lease the panels from the installation company for a fixed monthly payment.
Moreover, solar leases can provide immediate savings on electricity bills and require little to no maintenance responsibility. However, unlike purchasing, leasing does not offer the same long-term benefits, as you do not own the system.
Return on Investment (ROI) and Payback Period
Calculating the return on investment (ROI) and payback period is essential to understand the financial benefits of your solar system. Here, we will discuss how to calculate ROI and the factors influencing ROI and the payback period.
A. Calculation of ROI for Solar Panel Installation
To calculate the ROI for solar panel installation, you need to consider the total cost of the system. This includes the installation, maintenance, and financing costs, and compares it to the savings generated over time.
Also, the savings are primarily derived from reduced electricity bills and any income from selling excess electricity or SRECs. By dividing the net savings by the total cost and multiplying by 100, you can determine the ROI as a percentage.
B. Factors Influencing ROI and Payback Period
The following factors will directly affect your solar system’s ROI and payback period:
- Installation Cost. The higher the installation cost, the longer it will take to recoup the investment.
- Electricity Rates. Higher electricity rates will result in greater savings and a shorter payback period.
- Incentives and Financial Benefits. Taking advantage of tax credits, rebates, net metering, and SRECs can significantly improve your ROI and reduce the payback period.
- Energy Consumption. The amount of electricity consumed by your household will determine the savings generated from solar panels.
- System Performance and Efficiency. Higher efficiency panels will generate more electricity and result in greater savings.
C. Long-Term Savings and Benefits
While the initial cost of installing residential solar panels may seem big, the long-term savings make it a worthwhile investment. Once the system is paid off or the financing period ends, you can enjoy virtually free electricity for many years.
Additionally, solar panels require minimal maintenance. Also, the savings from reduced electricity bills can be substantial over time. And by reducing your reliance on the grid, you contribute to a greener and more sustainable future.
Additional Costs and Considerations
Apart from the upfront installation costs, there are a few additional costs and considerations to keep in mind. Here are some that you should remember when planning for residential solar panels:
A. Maintenance and Cleaning Expenses
Solar panels require minimal maintenance, but occasional cleaning is necessary to ensure optimal performance. Depending on your location, dust, dirt, and bird droppings can accumulate on the panels and reduce their efficiency.
While you can clean the panels yourself, we recommend that you hire professional cleaning services. This way, you won’t accidentally cause damage to the system. If you’re looking for a pro, our team at Local Solar Service is ready to maintain your system.
B. Insurance and Warranty Coverage
It’s important to consider insurance and warranty coverage for your solar panel system. Homeowners’ insurance policies may provide coverage for solar panels. However, you should review your policy and discuss it with your insurance provider to ensure adequate coverage.
Additionally, solar panels typically come with manufacturer warranties ranging from 10 to 25 years, covering defects and performance issues. With us, you’ll also enjoy a roof warranty during installation for added peace of mind.
C. Potential Additional Costs for System Upgrades or Expansions
If you plan to expand or upgrade your solar panel system in the future, there will be additional costs involved. It’s important to consider the scalability and compatibility of your current system to accommodate future expansions or upgrades.
With big savings awaiting you, there’s simply no reason not to consider solar energy for your home. It’s an excellent investment that will benefit you and your family.
The good news is that providers like Local Solar Service also offer financing options. This means you can switch to solar power without worrying about the big upfront cost. We can also give you reasonable payment terms to match your budget.
So if you’re interested in switching to solar, don’t hesitate to call us. Our specialist will be waiting for you!