How Much Do Solar Panels Cost? (2023)

Solar Panels Costs

Solar panels cost, on average, about $16,000, or between $3,500 to $35,000 depending on the type and model. While solar panels can help save you money on energy costs, it’s important to know the overall startup solar panel costs so you can plan a budget.

Average Cost of Solar Panels

Cost of Solar Panels By Type

Monocrystalline Solar Panels

On average, monocrystalline solar panels (the most energy-efficient solar panel option) cost $1 to $1.50 per watt, meaning that outfitting a 6kW solar panel system (also known as a solar system) costs between $6,000 and $9,000.

Polycrystalline Solar Panels

Less energy-efficient than monocrystalline solar panels, polycrystalline solar panels cost $0.90 to $1 per watt, so outfitting a 6kW solar panel system would cost between $5,400 and $6,000 making it a more affordable option.

Thin-Film Solar Panels

On average, thin-film solar panels cost between $1 and $1.50 per watt, meaning that outfitting a 6kW solar panel system costs between $6,000 and $9,000. Thin-film solar panels are more inexpensive than their counterparts, but require a large amount of space, and hence, are primarily used in industrial settings.

Solar Panel Installation Costs

Installing solar panels can cost anywhere between $15,000 and $25,000. This price will depend on location, with solar power costing more in regions farther from the equator, like Alaska, and costing less for sun-drenched regions and how many solar panels you’ll need.

Factors That Affect Solar Panel Costs

Multiple unique factors go into the price of solar panels, which are related to your electricity use and home. Check out the things to consider when calculating costs:

Solar Companies

The cost of solar panels is dependent on the solar panel company you choose. From the solar equipment system itself to installation costs to add-ons, the price will vary from company to company.

Size, Weight And Number of Panels

When assessing solar panel cost, the size, weight and number of panels are things to consider. For instance, when determining how many solar panels you’ll need, there are a few pieces of information you’ll need to know:

• How much energy your household uses
• How much space you have on your roof
• How many hours of sun your home gets, and the wattage and relative efficiency of the photovoltaic (PV) solar panels you’ll be installing

Once those are determined, you can begin to calculate the cost.

Federal Solar Tax Credit

Installing solar panels earns you a federal solar tax credit. That means you’ll get credit for your income taxes, which lowers your tax bill. You can qualify for the Investment Tax Credit (ITC) as long as your solar system is new or being used for the first time between January 1, 2006, and December 31, 2023. Unless Congress renews the ITC, it expires in 2024.

Type of Panels

There are three main types of solar panels available for residential use. They are monocrystalline, polycrystalline and thin-film. The most energy-efficient solar panel option, monocrystalline solar panels, costs $1 to $1.50 per watt. Less energy-efficient, polycrystalline solar panels cost $0.90 to $1 per watt. Thin-film solar panels cost between $1 and $1.50 per watt.

Solar Panel Manufacturer

Since solar panels come in varying quality, the cost can depend highly on the solar panel’s manufacturer. Although most manufacturers generally see similar cost ranges, the better the solar panel quality, the higher the price.

Efficiency

The efficiency of solar panels is determined by the amount of sunlight reflected on the panels’ surface, which is then transformed into electrical or thermal energy. Monocrystalline solar panels are the most efficient, but their price point is high because of their complex construction. Polycrystalline solar panels are simpler to create, making them less expensive than monocrystalline. Thin-film PV cells are easier and less expensive to produce but are the least efficient type of solar panel.

Location

Solar panel costs also vary by state due to local quoting trends and system size differences. States have different average system sizes and incentives, causing prices to differ from state to state.

Roof Pitch

Your roof’s characteristics, like the roof’s pitch, will also determine solar panel cost. Typically, your solar company will charge for the difficulty of the installation and having a complex roof will make your system cost more.

When to Install Solar Panels

Contrary to popular belief, winter is actually the best time to install solar panels. There is simply less demand for this service in winter, so the installation should cost less as a whole. Even if you live in a region that tends to be cloudy and/or chilly, your solar panels will still be able to generate energy and in some cases, will even generate more energy than they would in warmer months.

Installing solar panels during winter is, in addition to being cost-effective, efficient. With solar installation companies doing fewer jobs in the off-season, your panels are likely to be installed faster, and will be up-and-running in no time.

How Much Do Solar Panels Save?

Though solar panels cost money upfront, they are certain to save you money in the long-term. The question of how much solar panels will save you depends on a number of factors, including the hours of daily direct sunlight available to the panels, the angle of your roof and the size of your solar panel system. The most important factor, though, in determining how much money solar panels will save you, is simply your local electricity rates.

In order to determine how much money your solar panels will save you each year, calculate how much you spend on electricity annually (for reference, the typical American family spends about $1,450 a year on electricity). Then, determine what your current utility rate is, keeping in mind that utility rates tend to increase 2.2% or so each year (yet another reason to install solar panels).

Use an online calculator to estimate your annual savings by plugging in information like your location, energy usage and the current average price of solar panel installation in your area.

A common misconception is that solar panels will eradicate your electricity bills altogether. While this is sometimes the case, solar panels will significantly reduce your electricity bill each month, and are worth the investment as a whole.

Bottom Line

Whether you’re trying to reduce your electricity costs, carbon emissions or both, solar panels can generate major savings. The primary factor in determining how much money a solar panel system will save you, in the long run, is the cost of electricity, which can vary significantly based on your location.

If you live in a region with middle- to upper-level utility rates, you can pretty much guarantee that a solar panel will save you big bucks over time. Solar panels tend to be worth the investment as long as you go about the installation process wisely.

Frequently Asked Questions (FAQ’s)

How much energy can you save with solar panels?

The most significant benefit of installing solar panels is that you will save energy and, in turn, electricity costs. If your solar panels are large enough, you may be able to produce enough electricity for your whole home. But, even if your solar panels switch between the electricity from your solar panels to using energy from the National Grid, you’ll undoubtedly use less electricity and pay lower bills.

How can you pay for solar panels?

When purchasing a solar panel system, you have multiple options: an upfront cash payment, a solar loan, and other financing types, too, some of which may make more sense for you than solar-specific loans.

Do solar panels increase the value of your home?

Solar panels help reduce your monthly electricity bills and can potentially increase the home’s value more than comparable homes with no solar panels.