Multiple factors contribute to the cost of solar panels, making it a complex pricing structure that depends on various variables specific to your situation, electricity usage, and property.
Here are key factors to consider that influence the cost of solar panels:
System size: The larger the solar panel system, the higher the price. Importantly, the per-unit price decreases as the system size increases.
Location: Solar pricing varies by state due to local quoting trends and differences in system sizes. States with larger average system sizes generally have lower average solar costs.
Panel brand and quality: Solar panels come in different qualities, often linked to the brand. Higher quality panels typically come with higher prices.
Panel type: The type of panel installed, such as monocrystalline, polycrystalline, or thin-film, directly impacts installation quality and cost. Higher quality panels come at a higher price point.
Roof characteristics: The complexity of the installation affects the overall cost. Solar installers consider the difficulty posed by a complex roof and may charge accordingly.
Labor: Solar providers have different labor rates, allowing you to choose between reputable companies with varying reviews and installation timelines.
Permitting and interconnection: While not a major factor, the cost of permits and grid interconnection fees contributes slightly to the overall installation price.
System Size: The most significant factor influencing the price of a solar panel installation is the system size. A larger system with more panels will cost more upfront. However, a larger system can lead to greater long-term savings by significantly reducing or eliminating your monthly utility bill.
Location: Solar installation costs vary by location, primarily at the state level. While there may be some differences due to system sizes and incentives, it is important to consider the regional variation when assessing solar panel prices.
It's worth noting that specific average costs per watt vary across states. For instance, Arizona has the lowest average cost per watt at $2.44/W, while Michigan has the highest at $3.78/W. However, comparing the costs of systems with the same capacity in different states might not be fair due to varying energy needs.
In summary, the cost of solar panels is influenced by system size, location, panel brand and quality, panel type, roof characteristics, labor rates, permitting, and interconnection fees. Understanding these factors helps determine the overall cost and potential savings associated with installing solar panels.
Owning Solar Cost
Leasing Solar Cost
Solar Panel Cost
The estimated cost per panel typically ranges from $1,200 to $1,500. This comprehensive price encompasses various aspects such as design, permitting, hardware, installation, warranty, and monitoring services for your solar array. It's important to note that incentives are not incorporated in this price and will be factored into the net cost.
Net Cost is the amount you pay after deducting any incentives you received. Rebates can save you a large amount off your solar system.
On our website, we typically refer to solar panel pricing as the gross cost, which represents the cost before factoring in any solar rebates and incentives that can potentially reduce the initial expense or provide long-term financial benefits. Throughout the remainder of this article, our cost per Watt ($/W) figures are consistently presented as the gross cost. The reason behind this approach is that solar rebates and incentives are not universally accessible to all individuals. Even federal incentives, such as the 30 percent solar tax credit, may not be fully available to everyone. Eligibility for these incentives relies on having sufficient tax liability to claim the credit and lower the overall cost of your solar installation.
How Long Until Solar Pays for Itself?
On average, the payback period for your upfront investment in solar panel installation is 4.7 years. It is more accurate and beneficial to view solar panels as an investment rather than a standalone product that you simply purchase. This period, often referred to as the solar payback period, represents the point at which you recover the initial cost of your solar investment. To calculate this period, divide your combined costs (the gross cost of your solar panel system minus any incentives and rebates) by your annual financial benefits (including savings on electricity costs and eligible incentives/rebates).
The duration of your payback period is influenced by several factors, such as your electricity rates and energy consumption. By adopting solar power, you can shield yourself from rising energy costs. As the cost of electricity continues to escalate, your payback period will be shorter, allowing you to achieve financial equilibrium more quickly.