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How Expensive Are Solar Panels for a Home?

cost of photovoltaic panels

Installing a solar array is the dream of many, but realizing that it is more expensive than many think is another thing. Solar panels represent just a portion of the total cost, and inverters, wiring, batteries, etc. will add to the cost. Another contributing factor is the labor and all associated costs that come with it. This, in the end, can prove to be very expensive. To avoid any negative surprises, let’s read on and see what these expenses exactly are and how you can take control of them.

What is a Solar Panel System?

A solar panel system, also known as a photovoltaic system or solar power system, is a technology that converts sunlight into electrical energy. The system consists of multiple solar panels, an inverter, a battery (optional), and other components such as a charge controller and electrical wiring. The solar panels convert the energy from the sun into direct current (DC) electricity, which is then converted into alternating current (AC) electricity by the inverter for use in homes. 


When installing your solar panel system, you should consider that the price of the panels is just a part of the price you will pay to have the system up and running. A solar inverter, solar batteries, and even the wiring all cost, and so does the labor required to put everything into place. Here is a more detailed breakdown: 

Cost Breakdown

Many people have noticed that solar panels are relatively cheap, but the cost of installing them or having a single company do all the work is very high. It is necessary to understand exactly what expenses these companies have and whether it pays off that you purchase your own solar panels and then simply obtain solar permitting requirements and hire solar installers to put them on your rooftop. This is a part of the solution to the cost of solar panels. Here are the total costs of installing solar panels: 

Solar Panel System Components [6 kW]% of the Total CostCost [Lower Tier]Cost [Upper Tier]
Tier 1 Solar Panel26%$3,120$4,680
Solar Inverter10%$1,200$1,800
Mounting Equipment10%$1,200$1,800
Total Cost = Components + Labor100%$12,000$18,000

Cost Trends

The cost-benefit equation of residential solar has been significantly impacted by a decrease in price. On average, in many states, it takes between 4 to 12 years for the solar payback period. Over the past ten years, the cost of solar panels has decreased by a substantial 80%. Although trade restrictions, rising commodity prices, and pandemic-related supply chain constraints have caused solar panel costs to remain relatively unchanged between 2017 and now, the maturity of solar manufacturing technology limits the potential for substantial price drops. Nevertheless, the Inflation Reduction Act could potentially reduce future costs as more manufacturing is done in the United States.

Cost of a Solar Panel System

The cost of installing solar panels is directly related to your energy consumption needs. You can expect to pay $2 to $3 per watt of installation. For a typical home with an energy consumption requirement of approximately 6 kilowatts, the total cost will fall within the range of $12,000 to $18,000. For larger homes with greater energy needs, the cost could be anywhere between $12,000 to $30,000.

Despite these costs, it’s important to note that solar panels are more affordable now than they were in the past. The Solar Energy Industries Association (SEIA) reports that the average cost of installation has declined by a substantial 70% since 2010 and is expected to decrease further in the coming years.

When planning your solar panel installation, it’s crucial to take into account all the factors that contribute to the overall cost, including the cost of the panels themselves, the cost of soft costs such as permits and inspections, and the cost of solar PV panels. By investing in renewable energy sources, you not only reduce your carbon footprint, but you will also be able to save a lot over the course of many years. The long-term benefits of solar panel installation make it a smart investment for your home and for the environment.

Manufacturing Costs

Solar panel systems are created with a variety of materials and techniques. The heart of a solar panel is the solar cell, and the most common type of solar cell is made of silicon. You may have heard of silicon before, it’s the element with an atomic number 14 on the periodic table. This nonmetal material has conductive properties that allow it to turn sunlight into electricity.

It’s really cool how it works – when light hits a silicon cell, it sets electrons in motion, creating an electrical flow that is known as the “photovoltaic effect.” Silicon cells come in different structures:

  • Monocrystalline solar panels, 
  • Polycrystalline solar panels, and 
  • Amorphous silicon cells. 


These cells are created from a single large silicon block that is turned into silicon wafers. This process is a bit labor-intensive, which is why these cells cost about $1 to $1.50 per watt. They are, however, very efficient, and you will be able to get the most electricity with the least roof surface under these panels. They have a blackish hue, and a very stylish. 


These cells are made by melting several silicon crystals together. Although less efficient than monocrystalline cells, they are also less expensive and cost between $0.70 and $1 per watt. They have a recognizable blue hue that you might associate with solar panels.

Amorphous Silicon Cells

These cells are used to create thin-film solar panels that cost between $1 and $1.50 per watt. The panels have non-crystalline silicon cells that are attached to metal, plastic, glass, or another substrate. They are flexible and lightweight, making them a unique option compared to your traditional solar panels.

When you’re thinking about installing solar panels, it’s important to know that there is a variety of options out there. Solar companies offer a range of solar panel costs, and each type of cell has its own pros and cons. The cost of solar power may seem high at first, but the long-term benefits make it a smart investment for your household and the environment.

Installation Costs

Installing a solar panel system can seem overwhelming, but with the right team, it can be a smooth and enjoyable experience. The cost of installation can add up quickly, but it’s important to remember that having a top-quality installation is worth the investment.

When it comes to hiring a solar panel installation company, make sure to do your research and choose a team that you trust and that has a great track record. You want to make sure that your panels are installed correctly and will function at their full potential. Don’t hesitate to ask for references and check out reviews from previous customers.

One thing to think about is the cost of solar panel mounts, which can range from a few hundred dollars to a few thousand dollars. But don’t let the high upfront costs scare you! Remember that the payback period for solar panels is usually several years and the savings on your electricity bills will add up over time.

When it comes to the type of mount for your panels, consider your location and the intensity of sunlight in your area. Fixed mounts are the most affordable option and work well in areas with consistent sunlight. Adjustable mounts offer more flexibility and allow you to tilt your panels to optimize energy production. And if you’re looking for maximum efficiency, consider a tracking mount, even though they have a higher initial cost.

Fixed Mounts

Fixed solar panel mounts are a type of mounting system used to secure solar panels to the roof or ground. These mounts are designed to keep the solar panels in a stationary position and are the most basic and least expensive option among the three main types of solar panel mounts. They cost between $10 and $15 each and are typically made from aluminum or steel. They are ideal for locations that receive consistent and abundant sunlight, as the panels do not need to be adjusted for optimal performance. 

With a fixed mount, you can have peace of mind knowing that your panels are securely in place, which is especially important in areas with high winds or severe weather conditions. Overall, fixed solar panel mounts are a simple and cost-effective solution for those looking to install solar panels in their homes or businesses.

Adjustable Mounts

Adjustable solar panel mounts, as the name suggests, offer adjustable angles for the solar panels. This means that you can tilt the panels based on the intensity of the sun and the season. The purpose of adjusting the panels is to maximize energy production by soaking up more sunlight. 

Additionally, you can also lay the panels flat during windy conditions to avoid damage. These mounts typically cost around $50 each and are a great choice for those looking to optimize their solar power system without incurring high costs. When it comes to solar panel installations, adjustable mounts offer a middle ground between fixed mounts and more expensive tracking mounts, providing a cost-effective way to achieve greater energy efficiency.

Tracking Mounts

Tracking mounts are a type of solar panel mount that is designed to follow the arch of the sun throughout the day, offering maximum efficiency for your solar system. They cost between $500 and $3,000 each, which is a higher upfront cost compared to fixed and adjustable mounts. However, the added efficiency provided by the tracking system can result in a shorter payback period for your investment, as it can add up to 45% more energy production to your solar system. 

Despite the higher initial solar panel costs, the investment in a tracking mount can be well worth it for those looking to maximize their solar electricity production. It’s essential to consider all factors, including installation costs when deciding which type of mount is best for you. Solar companies can also offer advice and guidance on the best options for your specific situation and goals for your solar power system.

Solar Panel Payback Period

Most solar panels in the US will pay off within 4-12 years. In states where electricity is more expensive, this can mean that you make more savings each month, reducing the time it takes for the payback on your solar panel system. With a Federal Investment Tax Credit (ITC), you can speed this process up by up to 30%. The Biden administration has also increased the validity period of the Federal ITC so that you can enjoy the benefits and a shorter payback period to 2032. 

Tips to Reduce Solar Panel Installation Costs

solar installation price

The cost of installing solar panels can be a significant factor in determining the overall cost of your solar power setup. While the cost of solar panels and equipment may be relatively straightforward, there are several other “soft costs” such as installation and contractor expenses that can significantly impact the overall cost of your solar system. Here are a few steps you can take to reduce these costs and make the installation of your solar system more affordable:

  • Shop around for the best deals from solar companies, as the costs of solar panel installations can vary widely between providers, 
  • Take advantage of any solar incentives or rebates offered by your state or local government to offset the upfront cost of your solar system, 
  • Consider the long-term payback period and the reduced maintenance costs that come with a solar energy source, as this free energy source can produce electricity and help lower your electric bill over time, 
  • Consider installing your solar system on your own, as hiring handymen for this can cost you a lot – it takes around 3 people and full 8 hours to install a single solar system. 

By carefully considering these factors and taking steps to reduce the costs of your solar system, you can make sure that you get the most out of this investment and enjoy the benefits of solar power for years to come.

Acquire & Compare Multiple Installation Quotes

Don’t settle for just any quote for your solar energy installation! Take the time to compare and consider multiple options from contractors in your area. You can ask for recommendations from friends, family, or coworkers.

When choosing a contractor for your installation, look for one with a good reputation and a solid track record. Make sure they also offer a roof warranty, as this is an important factor in ensuring the longevity and quality of your solar system. A warranty not only protects your investment, but it can also help you save money by avoiding costly maintenance due to poor workmanship.

Consider DIY Installation

Installing your own solar system can help you save money on installation costs. However, it’s important to think about the potential challenges and factors that can impact cost savings. Before you start, make sure to research local regulations and requirements for DIY solar panel installations, as well as the necessary tools and equipment needed.

By doing the installation yourself, you will be responsible for purchasing all the hardware, including the silicon panels, which can lower the overall cost compared to hiring a professional contractor. It’s important to make sure that the panels are installed correctly and in compliance with local regulations to ensure that your solar system produces electricity effectively.

Stay Within Budget

Calculating the right number of solar panels for your home can be a tricky task, but it’s important to get it right to make sure that you get the most out of your investment. Here’s how you can ensure you have the right number of panels for your energy needs:

  1. Determine your average daily energy usage in kilowatt-hours to get an estimation of how much power you need.
  2. Decide how much of this energy you want to come from your solar system.
  3. Measure the space available for your solar panels and assess the average daily peak solar hours for your location.
  4. Use this information to calculate the number and type of solar panels you’ll need to fulfill your energy requirements.
  5. If the calculations seem too complicated, there are online tools available that can help. Simply enter information about your location and space to receive a cost breakdown and a recommended number of panels.

By following these steps, you can achieve energy independence, save on energy costs, and have a better understanding of the hardware and soft costs involved in your residential solar system.

Solar Energy Tax Incentives

There are several solar tax and rebate incentives. If you would like to check out some solar systems and possibly install one yourself, you should know which incentives there are. They can reduce the price of each watt compared to paying out of your pocket and can even provide more value when purchasing high-quality products, with long service life. To make sure the number makes sense, always do calculations and see if you qualify. 

Federal Tax Credits

The federal government offers various tax credits and incentives for homeowners who are looking to install solar panels in their homes. These incentives and credits can help reduce the cost of solar installations, making them more affordable for residential customers. To take advantage of these benefits, it’s important to act before they expire.

One of the federal incentives is the Solar Investment Tax Credit (ITC), which allows residential and commercial customers to deduct 26% of their solar panel cost from their federal taxes. There is no cap on the value of this tax credit.

Another federal incentive is the tax credit for solar backup batteries. This credit applies to all settings, although there are slight differences in eligibility requirements between the two. To be eligible for this tax credit, the batteries must be installed at least 12 months after the solar panels.

Finally, the United States Department of Agriculture offers Rural Energy for America Program (REAP) grants. These grants provide guaranteed grant funding and loan financing to rural small business owners and agricultural producers to buy and install solar systems.

In addition to these federal incentives, many utility companies also offer incentives and rebates to residential customers who install solar panels. It’s important to investigate the different utility incentives that are available in your area to determine which ones make sense for your particular situation.

USDA Grants

The USDA offers a grant program for rural businesses, organizations, and residents looking to adopt renewable energy technologies, including solar panels. This grant is part of the USDA Rural Energy for America Program (REAP). The program provides financial assistance in the form of grants to offset the costs of renewable energy systems and make them more affordable. The purpose of the program is to reduce energy costs, improve energy efficiency, and increase the use of renewable energy in rural areas.

State Tax Credit

When it comes to installing a solar system, many customers also consider factors such as the cost of the solar panels, the cost of the solar inverter, and the potential for annual savings on their energy costs. Most solar companies offer packages that include both the panels and the inverter, as well as installation services. These packages can vary in cost, but the savings generated by the solar system can offset the upfront investment over time. A system like this is eligible for a state tax credit, which can provide you with up to $10,000 for residential systems.

Cash Rebates

Net Cost Reduction through Cash Rebates: As a residential or commercial customer, you can take advantage of cash rebates offered by local utility companies, municipalities, and state governments. These rebates are meant to encourage the adoption of solar energy systems and can significantly reduce the overall net cost of your installation by as much as 20%. However, it’s important to keep in mind that these rebates are often time-limited and may no longer be available once a certain number of solar panel installations have been made in your area. Reducing your upfront hardware costs through rebates can result in a lower levelized cost of electricity produced by your solar system and a shorter pay-off period. 

Solar Renewable Energy Certificates [SRECs]

By installing a solar panel system in a state that requires utilities to produce or buy a portion of their electricity from renewable sources, such as solar, you can take advantage of the Solar Renewable Energy Credits (SRECs) produced by your system. These SRECs can then be sold to utility companies, helping to offset the cost of the solar installation and potentially reducing the solar payback period. In addition to SRECs, the Federal Tax Credit for solar installations can also help to reduce the overall net cost of the solar panels and impact the levelized cost of electricity produced by your system.

Performance-Based Incentives [PBIs]

Performance-Based Incentives (PBI) reward you for each kilowatt-hour of electricity generated by your solar system. Unlike Solar Renewable Energy Credits (SREC), which represent the environmental benefits of producing solar power, PBI programs incentivize the actual production of energy. This can greatly reduce the net cost of your solar installation and offset the hardware costs associated with installing solar panels, solar batteries, and other components. Additionally, PBI can help offset the soft costs account that comes with a solar installation, such as the cost of obtaining permits and connecting to the grid.

Subsidized Loans

There are various subsidized solar loans available from the state, non-profit organizations, and utility companies that offer reduced interest rates for purchasing a solar panel system. These are usually available in banks as ‘solar loans’ or ‘zero-interest solar loans’. Make sure to ask around before committing to any one bank. 

How to Qualify for Rebates?

To qualify for solar rebates, several factors are taken into consideration including incentives available in your state, your annual income, and tax liability. The federal tax credit is available to anyone who has a taxable income and makes an active contribution to the economy. A low income may also help you qualify for low-income rebates and grants that reduce the cost of going solar.

However, those who opt for a Power-Purchase Agreement (PPA) or lease for their solar panel system do not qualify for any financial incentives, as the independent contractor or solar installation company can claim federal and state tax credits and SRECs. The project budget and inspection fees should be considered when calculating the solar worth and service life compared to other energy sources.


Are Solar Loans Tax Deductible?

Yes, solar loans are tax deductible. The Federal Solar Tax Credit, also known as the Investment Tax Credit, allows you to claim a credit for 26% of the cost of your solar panel system, including the cost of your solar loan, in the year the system is placed in service. This credit is available through 2021 and then decreases in value each year.

How Long do Solar Panel Batteries Last?

The lifespan of a solar panel battery can vary, depending on several factors, such as the type of battery, the manufacturer, and the amount of usage. On average, most solar panel batteries last between 5 to 15 years. Some manufacturers offer warranties of up to 25 years for their products, but it is best to consult with a solar professional to determine the expected lifespan of your particular system.

Are Solar Panels Hail Proof?

Solar panels are built to withstand a certain amount of weather-related stress, but they are not completely hail-proof. While the tempered glass used in solar panels is designed to be impact-resistant, large or sharp hailstones can still cause damage. Most solar panels come with a warranty that covers damage caused by hail, but it is best to consult with your manufacturer for specific information about your panels.

Do Solar Panels Cause Roof Leaks?

Properly installed solar panels do not cause roof leaks. The panels are attached to the roof using a specialized mounting system and are designed to withstand the elements. However, if the panels are not installed correctly or if the roof has existing damage, it could lead to leaks. It is always recommended to have a professional inspect the roof prior to installation to ensure there are no potential problems.


Installing a solar array is a long procedure and may cost more than many imagine. Still, if you would like to reduce your dependence on fossil fuels and secure energy independence without overpaying for sales and marketing costs, you can purchase your own panels and hire independent contractors. This way, you can make sure that your solar cells do not cost too much and that your installation produces the energy you need for many years to come. 

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