How Much Do Solar Panels Cost 2023: The cost of solar panels can vary depending on various factors. Due to the site-specific nature of solar panel installations, it is difficult to provide an exact price without conducting an on-site inspection of your home.
However, it is important to note that going solar can be quite expensive regardless of your location. Nevertheless, the prices of solar panels have significantly decreased compared to a decade ago, and this trend is expected to continue as the industry matures. According to data from the energy consulting firm Wood Mackenzie, the average cost of an 8-kilowatt residential solar panel system was approximately $3 per watt in 2022.
This represents a decrease of 29 cents per watt from the previous year. However, the average cost of a system is still around $24,000 before considering tax credits and other incentives.
Can Solar Panels Save You Money?
It is worth noting that your specific home may deviate from this average. If you are interested in determining the potential cost savings of solar panels for your home, you can enter some basic information below to receive a free estimate of your energy savings.
Keep in mind that several factors can influence the cost of solar panels, including roof area, suitability for installation, roof angle, pitch, material costs, and optimal orientation, as explained by Rohit Kalyanpur, CEO of Optivolt, a solar company based in Silicon Valley.
The good news is that there are financial assistance options available to help offset the cost of solar panels. The Inflation Reduction Act, enacted by Congress in 2022, offers a 30% tax credit for solar panel systems installed until 2032.
How much do solar panels cost for homes?
In summary, the cost of solar panels for homes can vary significantly due to several factors. The size of the system and specific customer needs, such as average monthly energy consumption, house size, and number of energy-consuming appliances, can all impact the overall cost.
The efficiency rate of the solar panels and other installation expenses should also be considered. While the best solar panels can range from $15,000 to $50,000, it is important to explore available tax credits, rebates, and incentives provided by the federal, state, and municipal governments to help reduce the cost.
Average National Cost of Solar Panels
| System size (kW) | Price per watt | Total cost | |
|---|---|---|---|
| Lawrence Berkeley National Laboratory | 8.6 | $3.67 | $31,588 |
| Wood Mackenzie | 8 | $2.99 | $23,920 |
| FindEnergy | 5 | $3.60 | $18,073 |
Solar panel costs can be influenced by various components of a solar system. Let’s analyze the different parts of a solar panel system and their corresponding expenses.
Solar panels:
The cost of solar panels alone can range from 80 cents to $1.80 per watt, depending on factors such as type, size, and application. This price does not include installation costs or the additional equipment required to generate energy and power your home.
Batteries:
Solar batteries are an expensive component, with prices varying based on capacity and quality. These batteries are the key that will store the energy generated by the solar panels. Costs depend on the installer, application, and location, typically ranging from $12,000 to $22,000 according to the Department of Energy.
However, smaller capacity systems are available at lower prices. In some cases, solar batteries may even be more costly than the solar panels themselves. It’s important to note that not all solar systems require batteries. If you remain connected to the grid, you won’t need to store energy, although it is still an option.
Inverter:
The inverter is responsible for converting the direct current (DC) electricity produced by the panels and stored in the battery into alternating current (AC) electricity, which powers your appliances. Inverter costs range from 20% to 50% of the solar panel price.
Charge controllers:
Charge controllers protect the battery from overcharging and can cost between 5% and 10% of the solar panel price. More advanced charge controllers with additional features may be more expensive.
Labour costs:
Labor costs can vary depending on the state. Some states have specific regulations requiring a certain ratio of licensed electricians to non-electricians in a solar installation crew. Licensed tradespeople generally cost more due to insurance, benefits, and workers’ compensation expenses.
Additional expenses:
Other factors contribute to the overall solar installation cost, including system size, design, site survey, engineering, permits, power electronics, mounting hardware, telemetry systems, and maintenance. These expenses can vary significantly depending on the location in each country.
How much are solar panels in my state?
To determine the average cost of solar panels in your state, refer to the image provided. The data from FindEnergy.com shows the average cash price for a 5-kilowatt system in each state, excluding tax credits or state incentives.
Solar Panel Costs by State
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image: cnn
Factors that affect solar panel costs in US, UK and all Countries
Obtaining an accurate solar estimate without an on-site inspection of your home can be challenging. Every home has unique characteristics such as location, layout, and energy needs, resulting in varying solar pricing for each residence.
While your home may only require a small 5 kW solar array, your neighbour down the street may need a larger 8 kW array. Additionally, they may choose to include a solar battery, further increasing the overall cost. Below are some of the key factors that influence the cost of transitioning to solar energy.
How Much Do Solar Panels Cost 2023
Below is the complete information of the solar panel costs in the United States of America.
Solar Panel Costs in USA States
| State | Price per watt | Total cost | Solar savings with federal solar tax credit | Average electricity rate (cents per kilowatt hour) | Average annual electricity bill (2021) |
|---|---|---|---|---|---|
| California | $3.47 | $17,350 | $5,205 | 26.17 | $1,484.04 |
| Colorado | $3.98 | $19,900 | $5,970 | 14.29 | $1,103.56 |
| Connecticut | $3.75 | $18,750 | $5,625 | 24.65 | $1,874.47 |
| Delaware | $3.09 | $15,450 | $4,635 | 13.73 | $1,426.15 |
| District of Columbia | $3.99 | $19,950 | $5,985 | 14.2 | $1,108.98 |
| Florida | $3.21 | $16,050 | $4,815 | 13.92 | $1,564.79 |
| Georgia | $3.74 | $18,700 | $5,601 | 14.02 | $1,609.34 |
| Idaho | $3.46 | $17,300 | $5,190 | 10.42 | $1,171.40 |
| Illinois | $3.76 | $18,800 | $5,640 | 15.87 | $1,150.34 |
| Indiana | $4.10 | $20,500 | $6,150 | 14.98 | $1,518.07 |
| Iowa | $4.01 | $20,050 | $6,015 | 13.07 | $1,315.52 |
| Kansas | $3.34 | $16,700 | $5,010 | 14.13 | $1,386.37 |
| Kentucky | $3.65 | $18,250 | $5,475 | 12.85 | $1,496.03 |
| Louisiana | $3.80 | $19,000 | $5,700 | 12.69 | $1,576.39 |
| Maine | $3.80 | $19,000 | $5,700 | 22.52 | $1,193.26 |
| Maryland | $3.54 | $17,700 | $5,310 | 14.51 | $1,531.42 |
| Massachusetts | $4.06 | $20,300 | $6,090 | 26.1 | $1,636.40 |
| Michigan | $4.06 | $20,300 | $6,090 | 17.75 | $1,410.89 |
| Minnesota | $4.03 | $20,150 | $6,045 | 14.16 | $1,257.12 |
| Mississippi | $3.14 | $15,700 | $4,710 | 12.65 | $1,623.66 |
| Missouri | $3.37 | $16,850 | $5,055 | 12.29 | $1,422.66 |
| Nevada | $3.08 | $15,400 | $4,620 | 13.79 | $1,322.08 |
| New Hampshire | $4.22 | $21,100 | $6,330 | 25.5 | $1,502.90 |
| New Jersey | $3.53 | $17,650 | $5,295 | 16.79 | $1,348.64 |
| New Mexico | $3.93 | $19,650 | $5,895 | 14.11 | $1,047.67 |
| New York | $3.65 | $18,250 | $5,475 | 22.04 | $1,400.42 |
| North Carolina | $3.51 | $17,550 | $5,265 | 12.08 | $1,444.53 |
| Ohio | $3.41 | $17,050 | $5,115 | 14.01 | $1,346.56 |
| Oklahoma | $3.13 | $15,650 | $4,695 | 12.57 | $1,436.33 |
| Oregon | $3.50 | $17,500 | $5,250 | 11.35 | $1,277.83 |
| Pennsylvania | $3.55 | $17,750 | $5,325 | 16.06 | $1,405.35 |
| Rhode Island | $4.07 | $20,350 | $6,105 | 23.2 | $1,564.75 |
| South Carolina | $3.45 | $17,250 | $5,175 | 14.11 | $1,663.76 |
| Tennessee | $3.58 | $17,900 | $5,370 | 12.37 | $1,571.82 |
| Texas | $3.33 | $16,650 | $4,995 | 13.55 | $1,588.82 |
| Utah | $3.29 | $16,450 | $4,935 | 10.94 | $970.48 |
| Vermont | $3.85 | $19,250 | $5,775 | 20.18 | $1,310.82 |
| Virginia | $3.59 | $17,950 | $5,385 | 13.52 | $1,571.04 |
| Washington | $3.59 | $17,950 | $5,385 | 10.23 | $1,193.41 |
| West Virginia | $3.39 | $16,950 | $5,085 | 13.25 | $1,555.27 |
| Wisconsin | $3.88 | $19,400 | $5,820 | 15.5 | $1,202.11 |
Courtesy: cnn
Solar Panel Cost By Type
The 3 popular and main types of solar panels are monocrystalline, polycrystalline, and thin-film. Monocrystalline panels are the most popular choice for residential installations due to their high efficiency rates ranging from 17% to 22%. The average cost of these panels is between $1 and $1.50 per watt, with potential price variations based on location.
Polycrystalline panels are a budget-friendly option, offering a moderate efficiency rate of 15% to 17%. Their cost ranges from 90 cents to $1 per watt. Thin-film solar panels, with an efficiency rate of 10% to 13%, are the least efficient type available. They have a shorter lifespan and are rarely used for residential purposes.
Solar Panel Types
| Solar panel type | Efficiency rate | Cost per watt |
|---|---|---|
| Monocrystalline | 17% – 22% | $1 – $1.50 |
| Polycrystalline | 15% – 17% | $0.90 – $1 |
| Thin-film | 10% – 13% | $1 – 1.50 |
Factors Impacting Solar Panel Costs
image: cnn
Additional Costs Associated with Solar Panel Installation
As you may already know, solar energy comes with a price tag. However, the actual purchase of solar panels accounts for only a small portion of the total installation cost.
According to the US Department of Energy, approximately 35% of the overall cost is attributed to the solar equipment itself. So, where does the remaining amount go? The majority, 65% to be precise, is allocated to soft costs, which are the hidden expenses associated with installing solar panels.
Soft costs encompass non-hardware expenses, including sales and marketing, labor, paperwork, and overhead profits. Here are some common soft costs that you can expect to incur:
- Installation labor.
- Permits and inspections.
- Supply chain costs.
- Sales tax (unless your state exempts solar panels).
- Supply chain costs.
- Sales and marketing.
- Overhead company profit.
- Tree removal (if you have trees shading large parts of your roof).
- Insurance (if you plan on adding your solar panels to your homeowners insurance policy).
- Maintenance.
How much do solar panels save?
Savings Generated by Solar Panels Several factors need to be taken into account in order to determine the potential cost savings of solar panels. These factors include the orientation and tilt angle of the panels, local weather conditions (such as annual sunlight hours), system size, shading, battery capacity and efficiency, and more.
If your home is suitable for a solar system, you can anticipate a reduction in your monthly electricity bill ranging from 50% to 100%. By investing in a high-quality solar system, you are making an upfront payment to enjoy long-term financial benefits, such as reduced or even eliminated electricity bills.
Typically, it takes between six to 12 years for a solar panel system to pay for itself. Let’s consider a quick example. Calculating the Federal Solar
How to calculate the federal solar tax credit?
Tax Credit Suppose your current monthly electricity bill amounts to $150, and you are interested in a solar system that costs $30,000. Firstly, we need to calculate the cost of your system after applying for the federal 30% tax credit. Here’s how it works:
- Net project cost = Total project cost – federal tax credit
- Federal tax credit = 30% x $30,000 = $9,000
- Net project cost = $30,000 – $9,000
- Net project cost = $21,000
Now you would need to calculate the payback period to know how long it will take to recover your investment after installing the solar system at your home.
- Payback period = Net project cost / Annual electricity savings
- Annual electricity savings = Monthly electric bill x 12
- Annual electricity savings = $150 x 12 = $1,800
- Payback period = $21,000 / $1,800
- Payback period = 11.7 years
Based on this calculation, a $21,000 investment in a solar system at your home will take less than 12 years to recover your initial investment.
What is the time frame for recouping solar panel expenses?
The breakeven point or solar payback period refers to the duration it takes for your investment in solar panels to start yielding returns. Put simply, it is the time it takes for your solar panels to pay for themselves. The average cost of going solar and the payback period can vary.
However, experts suggest that the average payback period in the US ranges from six to 12 years. Factors that influence the solar payback period include system cost, tax credits and incentives, energy consumption, electricity generation by the system, and electricity rates. You can use a simple mathematical formula to get a rough estimate of your solar payback period.
However, it’s recommended to consult an installer for a more accurate assessment.
(Total cost of solar system – rebates) / Annual electricity bill savings = Payback period in years Begin by determining the total cost of installing solar panels on your property.
If you are taking out a loan, factor in the interest and fees. Next, subtract the value of any tax credits, incentives, or rebates. This will give you the net cost of your solar panel system after discounts. Then, estimate the annual savings on your electricity bill from using solar panels. You can seek assistance from your solar installer or utility provider for this calculation.
Are solar panels worth the investment?
Finally, divide the net cost of the system by the annual bill savings. The resulting number represents the number of years it will take for your solar panels to pay for themselves. Are solar panels a worthwhile financial investment? According to Kalyanpur, there are several factors to consider when evaluating the benefits of solar panels.
First, assess the total energy production over the system’s lifespan and determine if it can lead to significant savings. Other factors to consider include state-level incentives that assist in offsetting the costs of investing in solar panels.
Pros –
- Solar panels can reduce your carbon footprint and contribute to a more environmentally friendly world.
- They can substantially reduce or eliminate your electricity bill, resulting in financial savings.
- They can increase the value of your property.
Cons
- The upfront costs for solar panels can be quite expensive.
- The efficiency and energy generation of solar panels depend on weather conditions and location.
- Maintenance and replacement costs can increase the long-term expenses of a solar system.
How can I purchase solar panels?
There are several ways to finance solar panels. Here are some of the most commonly used methods:
Cash:
Paying in cash is the optimal choice if you have the means. By doing so, you can avoid costly financing fees and high interest rates. Additionally, you will always be eligible for tax credits and incentives. Furthermore, paying in cash often results in a shorter solar payback period.
Solar loan:
For those who cannot afford to pay in cash upfront, a solar loan might be a viable financing option. This type of loan is typically offered by a third party, so it’s important to inquire about any associated fees and interest rates.
Other loans:
A solar loan is not the only financing option available. You could also explore the possibility of obtaining a personal loan from your bank or opening a home equity line of credit (HELOC). However, it is crucial to be aware of the risks associated with a HELOC, as failure to repay could result in the loss of your home.
Lease or power purchase agreement:
If solar panel ownership does not interest you, leasing a system or entering into a power purchase agreement (PPA) could be a suitable alternative. Leasing allows you to use solar equipment owned by a solar company, while a PPA involves purchasing solar power generated by a company-owned system at a fixed rate.
Typically, this fixed rate is lower than the retail electricity rate from your local power company. To explore all available options, consult your solar installer.
How long does it take to install a complete solar panels?
The process of installing solar panels can take six months or longer. The actual installation of the panels on your roof, performed by the installer, usually takes three days or less. However, what often delays the process is everything that needs to occur before installation day.
This includes the sale of the system, site assessments, system design, obtaining permits, and addressing supply chain issues. Most of the waiting time is spent on permit and paperwork approval, as well as dealing with supply chain delays.
Solar installation process
| Part of the installation process | Description | Time it takes |
|---|---|---|
| Personal research and establishing the sale | Give yourself plenty of time to do some independent research and gather as many quotes as you can. Once you’ve chosen your installer, they’ll work with you to start the solar sale and process. | As long as you need |
| Site assessment and system design | Your installer will assess your property to design a solar panel system that fits your roof and your home’s energy needs. | One to four weeks |
| Permits and paperwork | You’ll need the right permits to install solar on your property. Your installer will take care of this. Depending on where you live, this can take quite a long time. | Three to 11 weeks |
| Installation | The day (or days) when the installer will come to install solar on your property. | Less than three days |
| Permission to operate | The approval from your utility to activate your solar panel system. This is part of the installation process. | Two to three weeks, or longer |
image:cnn
Solar panel FAQs:
Do solar panels increase home value?
Yes, it is possible that solar panels can increase the value of your home. In most cases, they are considered upgrades or home improvements. According to the Department of Energy (DOE), installing solar panels could potentially raise your home’s resale value by approximately $15,000.
How long do solar panels last?
Solar panels can have a lifespan of 25 years or more. The longevity of your panels depends on environmental conditions, the type of panels installed, and the quality of the installation. Additionally, many solar companies offer 25-year panel warranties.
Which states are best for solar?
While there is no definitive “best solar state,” certain states make going solar more affordable and accessible by offering state-level tax incentives and rebates.
Some states even provide opportunities to earn money by selling excess solar energy to the power grid or utility companies through net metering and Solar Renewable Energy Credits (SRECs). Additionally, states with higher peak sunlight hours are generally more advantageous for solar energy.
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