With the price of solar PV panels declining by 99% since 1977, a lot of people are looking to join the bandwagon. Solar has become one of the most popular forms of renewable energy, with more and more people installing panels in their homes and businesses.
But before you go solar, you need to ask yourself one important question: can I afford it?
The cost of going solar has never been lower, but it’s still a significant investment. In this guide, we’ll take a look at all the factors that affect the cost of going solar, so you can make an informed decision about whether it’s right for you.
The Cost of Solar PV Panels
The residential solar panel cost is the first and most important factor to consider when you want to go solar. Solar panels are the heart of any solar system, and their price will have the biggest impact on the overall cost.
The cost of solar panels will vary depending on the type and efficiency of the panels you choose. The most popular type of solar panel is a monocrystalline silicon panel, which typically costs between $1 and $1.50 per watt.
Polycrystalline silicon panels are the second most popular type of solar panel, and they usually cost between $0.90 and $1 per watt. However, they have lower efficiency than monocrystalline panels, so you’ll need more of them to produce the same amount of power.
Thin-film panels are the least popular type of solar panel, but they’re also the least expensive for residential properties. They typically cost between $1 and $1.50 per watt.
How Many Solar Panels Will You Need?
The number of solar panels you’ll need will depend on the size of your home and your energy needs. A typical residential solar system ranges from 5 to 15 kilowatts (kW), which is enough to offset the annual electricity usage of an average home.
To find out how many solar panels you’ll need, start by calculating your home’s energy usage. You can find your energy usage on your most recent electricity bill or use an online calculator like this one from the U.S. Department of Energy.
Once you know your energy usage, divide it by the average solar panel output to determine how many panels you’ll need.
For example, if you use an average of 700 kilowatt-hours (kWh) of electricity per month, and each solar panel produces an average of 30 kWh per month, you’ll need 23 panels.
Consider the Solar Installation Price
The cost of solar panels is only half the story — you also need to factor in the installation cost. The price of solar installation will vary depending on the size and complexity of your system, as well as the installer you choose.
In general, you can expect to pay between $15,000 and $30,000 for a typical residential solar system. However, there are ways to reduce the cost of installation.
One way is to go with a smaller system, which will obviously be less expensive to install. Another way is to choose an installer who offers financing options, such as lease-to-own or power purchase agreements.
You could also go with a solar company that offers discounts for cash payments.
Solar Incentives and Tax Credits
The federal government offers a solar tax credit, also known as the investment tax credit (ITC), that can help offset the cost of going solar.
The ITC allows you to deduct 26% of the cost of your solar system from your federal taxes, which will be 22% in 2023. So if you install a $20,000 solar system before 2023, you can deduct $5,000 from your taxes.
In addition to the federal solar tax credit, many states and local governments offer their own solar incentives. These incentives can take the form of tax credits, rebates, or grants, and they can help offset the cost of going solar.
Check here to see if you qualify for solar tax credits.
Solar Financing Options
If you’re not ready to pay for a solar system with cash, there are several solar financing options available that can make solar more affordable.
One option is to take out a loan. Solar loans are similar to home improvement loans, and they typically have terms of five to 20 years. The interest rate on a solar loan is usually between four and seven percent and can be used to finance both the cost of the solar panels and the cost of installation.
Another option is to lease or enter into a power purchase agreement (PPA) with a solar company.
With a solar lease, you make monthly payments to the solar company for the use of their panels, and at the end of the lease term, you have the option to buy the system outright.
Financing a solar system with a PPA means you’ll make monthly payments to the solar company, but you don’t have the option to buy the system at the end of the term. Solar leases and PPAs are usually offered with little or no money down, making them a good option for people who don’t have a lot of cash on hand.
Evaluate Your Home’s Exposure to Sunlight
The amount of sunlight your home receives will have a big impact on the cost of going solar. If your home doesn’t get a lot of sunlight, you’ll need more panels to produce the same amount of electricity as a home that gets full sun.
You can use an online tool like Google’s Project Sunroof to evaluate your home’s exposure to sunlight. Project Sunroof will tell you how many hours of usable sunlight your home receives per year, as well as the amount of roof space that’s suitable for solar panels.
Off-Grid Vs. On-Grid Solar
An off-grid solar system is not connected to the electricity grid, which means you’ll need to store your own solar power in batteries. Solar batteries are an added expense, and you need to factor them into your solar budget.
On-grid systems are connected to the electricity grid, which allows you to sell any excess solar power you generate back to the utility company. On-grid systems are typically less expensive than off-grid systems, but they’re not an option for everyone.
If you live in a remote area that’s not served by the electricity grid, or if you want to be completely independent of the grid, then an off-grid solar system is your only option.
How Much Does It Cost to Go Solar?
Going solar is a big decision, but it doesn’t have to be daunting. By doing your research and evaluating your needs, you can figure out if solar is right for you and how much it will cost.
There are a variety of solar financing options available that can make it affordable for you to go solar. There are also state and federal solar incentives that can help offset the cost.
That said, if you found this article informative, please share it with your friends and family who are considering going solar. If you’d like even more amazing content, head over to our blog to discover more today.