Naturally, one of the first questions we’re asked is “How much do solar panels cost?”
A solar energy system is not a one-size-fits-all solution, making it difficult to answer this question without knowing your site details and other information.
While we may not be able to provide an exact price for your specific site, this blog will walk you through everything that affects solar panel installation costs, with real price ranges to give you a ballpark estimate of what to anticipate as you investigate a solar investment for your home, business, or farm.
There are two primary installation methods for solar energy systems: roof mounts and ground mounts. The third, less common method is a carport.
Roof mounts are attached to your existing roof structure. They generally cost less than ground mounts or carports due to lower labor and fewer components.
Solar can be installed on metal, shingle, and flat roofs. Each one requires different components and varying levels of labor.
Shingle roofs require a specific flashing piece to attach the panel racking to the roof. For a ribbed or standing seam metal roof, the racking is attached directly to the metal. Panels are installed on a flat roof using a ballast mount - a tray held in place by a concrete block.
Ground mounts and carports are great options for homes and businesses without suitable roofs for solar panels. In most cases, this type of system can be installed at a location that receives optimal sunlight for optimal performance.
The trade-off is ground mounts, and certainly, carports tend to cost more than installing solar panels on your roof. This is mainly due to the increased labor and additional structure required to hold the panels in place.
However, there are instances where a ground mount, being situated in the perfect location, may require fewer solar panels, ultimately balancing out the cost.
There are two basic variables with solar panels: power density and color. Power density is the amount of power that a solar panel can produce per unit of size. For example, a solar panel of the same size may produce between 400 and 600 watts, depending on the power density. Generally speaking, the more power-dense the panel, the higher the cost per watt.
Color is the other variable with solar panels. The basic panel has a blue cell, a white back sheet, and a silver frame. Modules with a black frame, black back sheet, or black cell are generally more expensive, but they offer better curb appeal.
There are three types of solar inverters: String Inverters, Microinverters, and String Inverters with Power Optimizers.
String Inverters link solar panels together in one or multiple groups. String inverters tend to be more cost-effective than other types of inverters. They are primarily used with ground mounts.
Microinverters are installed on each individual panel. Although this type of inverter has its benefits, they tend to be the most expensive type of inverter.
Power optimizers with string inverters have many of the benefits of micro-inverters. They are more expensive than just string inverters but less expensive than micro-inverters. Most roof mounts are now using an inverter setup of power optimizers with string inverters.
Our goal is to design your solar panel system to offset as much of your electricity consumption as possible while ensuring the highest possible return on your investment. The higher your electricity bill is, the more solar panels, inverters, and equipment the system will require. However, many of the soft costs, such as permitting, remain the same, so the cost per watt will be significantly lower for a commercial solar system compared to a small residential system.
The amount of shading a solar system receives has a direct impact on the system's performance and the type of equipment that’s used.
If a system is installed in an area with shading, it may require additional panels and microinverters to meet the customer’s energy coverage requirements. On the contrary, a system in full sun could produce the same amount of energy with fewer panels and string inverters.
Weather patterns in each region are different. Some locations receive more sun than others. Other regions receive more snow. Our systems are designed using local weather data. This data will impact the system size and the necessary equipment.
Interconnection is the process of connecting the solar system to the power grid. Each local utility has specific requirements that must be followed. Some of these requirements could impact the type of meter you need or whether transformer upgrades are required.
The interconnection cost is different for each project, depending on how much solar is already in your area, the age and strength of the equipment on your line, and the size of the system you’re installing.
Since the power produced by the solar system must be transported to the utility meter, the farther the solar panels are from that interconnection point with the utility, the higher the installation cost will be. This is due to the conduit installation or trenching required, as well as the amount and size of wire required (the farther the distance, the larger the wire must be).
When examining your solar quotes, it’s important to make sure you’re comparing apples to apples because not all solar quotes are created equal. And not all solar companies are equivalent.
Several factors will cause some solar installers to be more expensive than others:
The average commercial solar panel system will cost between $1 and $2.50 per watt. Businesses should expect to pay between $125,000 and $500,000+ before any tax incentives or grants are utilized. This cost will vary significantly depending on the system size, installation type, and various other factors we have covered above.
With available state and federal incentives, most commercial solar owners could receive 60-90% of the system’s cost back within the first few years after energizing their system.
The chart below shows the ballpark installation costs for commercial solar systems, covering monthly electric bills of $600, $1,200, and $2,400.
The average cost of installing a residential solar panel system ranges between $2 and $3 per watt. This means you can expect to pay between $25,000 and $50,000 for solar energy systems, depending on various factors such as the system's size and the type of equipment used.
After utilizing the 30% federal tax credit, homeowners can expect to pay between $18,000 and $38,000 for solar panels.
The chart below shows average installation costs for residential solar systems, covering an average monthly electric bill of $60, $120, and $180.
There are several financing options available for solar panels, each with its own set of pros and cons. However, all have varying effects on your installation cost and payments.
If you’re considering installing solar panels at your home or business, it’s crucial to be aware of more than just the upfront costs. While solar energy offers numerous long-term benefits, there are several often-overlooked costs that homeowners and businesses should be aware of before making the investment:
While solar panels are generally low maintenance, they do require occasional cleaning and inspection to ensure optimal performance. Depending on the location and environmental factors, regular maintenance may be necessary to keep the panels free of dirt, debris, and shading from nearby trees or buildings.
Before installing solar panels, it's essential to assess the condition of your roof. If your roof is old or in need of repairs, it may be necessary to invest in upgrades or replacements to ensure it can support the weight of the solar panels and withstand the installation process.
Additionally, if your roof requires maintenance or repairs in the future, it may be necessary to remove and reinstall the solar panels, adding to the overall cost.
Solar inverters are essential components of a solar panel system that convert the direct current (DC) electricity generated by the panels into usable alternating current (AC) electricity for your home or business. Over time, inverters may need to be replaced due to normal wear and tear, technological advancements, or malfunctions.
Thankfully, your manufacturer’s warranty will most likely cover the replacement of your inverter. However, you would be responsible for the labor to diagnose and fix the issue (unless you have Paradise Energy’s Triple Ten Guarantee).
While solar panels are designed to be durable and long-lasting, they are not immune to damage from severe weather events, accidents, or other unforeseen circumstances. Repairing or replacing damaged panels can be expensive, so it’s essential to consider the potential for repair costs when budgeting for solar panel installation.
It’s natural to weigh the initial cost of solar panels against the potential return on investment (ROI). While the upfront expense may seem significant, understanding how solar panels pay for themselves over time is crucial for making an informed decision.
The upfront cost of installing solar panels can vary depending on factors such as system size, location, and available incentives. However, it's important to consider the potential long-term savings on energy bills. On average, a 10-kilowatt solar power system can save a typical household about $1,440 per year or $120 per month. Over time, these savings can offset the initial investment, leading to significant financial benefits.
One of the primary ways solar panels pay for themselves is through reduced energy bills. By generating your electricity from solar energy, you can significantly decrease or even eliminate your reliance on traditional utility providers, resulting in substantial savings over time. These savings can help offset the initial cost of installing solar panels and contribute to a positive ROI.
Additionally, homeowners and businesses can take advantage of various federal and state incentives to offset the upfront costs of solar panel installation. These incentives, such as the federal solar investment tax credit (ITC) and depreciation for commercial installations, can significantly reduce the overall cost of installing solar panels, making them more financially accessible for many individuals and organizations.
By leveraging these incentives, you can accelerate the payback period for your solar panel system and increase your overall ROI.
Another way solar panels help pay for themselves is by increasing the value of your property. Homes and businesses with solar panel systems are often valued higher than those without, making solar panels not only a smart financial investment but also a valuable asset that can enhance the resale value of your property. This increase in property value can further contribute to a positive ROI over time.
The average ROI of solar panels in the U.S. is approximately 10%. This means that, on average, you'll make a profit of $10 for every $100 you spend installing a solar system. However, it's important to recognize that ROI percentages can vary based on factors such as location, system size, and available incentives. While some homeowners may experience lower returns or longer payback periods, others may see higher returns exceeding 20%.
If you want to learn more about the ROI of residential solar panels, or the ROI of solar panels in a particular state, read our blog: The Payback and ROI of Residential Solar Panels.
If you want to learn more about the ROI of commercial solar panels, or the ROI of solar panels in a particular state, read our blog: What is the Average ROI for Commercial Solar Panels?
The average monthly cost of solar panels depends on factors such as system size, energy consumption, and financing options. However, homeowners can typically expect to pay between $100 to $200 per month on solar panel financing or lease payments.
Commercial solar installations tend to be larger and more complex than residential systems, resulting in higher upfront costs. Additionally, commercial installations may require additional engineering, more permitting hurdles, and utility upgrades to transformers and other equipment, further impacting the overall cost. On the other hand, residential installations are typically smaller and more straightforward, leading to lower upfront costs.
The cost of solar panels varies depending on factors such as system size, panel type, installation complexity, and location. On average, homeowners can expect to pay between $25,000 to $50,000 for a residential solar panel system before incentives.
If properly installed, solar panel systems require minimal maintenance. Most solar panels and inverters come with lengthy warranties. Any maintenance costs will typically be associated with occasional cleanings, system inspections, and warranty diagnostic work.
At Paradise Energy Solutions, we build average maintenance costs into the cash flow we provide with our proposals. This will give you insight into how these costs will impact your ROI and payback. We also offer a Triple Ten Guarantee that covers most maintenance costs in the first ten years.
Ground-mounted solar panels tend to be more expensive than rooftop installations due to additional material and labor costs associated with mounting structures and wiring. On average, homeowners can expect to pay between $20,000 to $40,000 for a ground-mounted solar panel system before incentives. Businesses can expect to pay $150 to $500,000+ for a ground mount system.
Yes, solar panels can lead to significant savings on energy bills over time. Homeowners and businesses can reduce or eliminate their reliance on grid power by generating clean electricity from the sun, resulting in lower monthly energy expenses and long-term savings. System owners can also enjoy significant tax savings.
Yes, investing in solar panels can be a wise financial decision for homeowners seeking to lower their energy costs, enhance property value, and contribute to environmental sustainability. With favorable incentives and decreasing installation costs, solar panels offer an attractive return on investment for many homeowners.
In addition to reducing an expense, there are several incentives available that will help cover the upfront installation cost. The main incentive is the federal tax credit. This is 30% for residential and 30-50% for most commercial systems.
There are several additional incentives available for commercial installations. Businesses can depreciate their solar system, apply for a USDA REAP grant, and possibly capitalize on other local grants.
While this blog provides ballpark numbers for what you can expect to invest in a solar panel system, each installation is truly a custom solution. That's why it's important to request your free custom quote to get an accurate cost for your installation. Request your custom quote to get started.
Not ready for a quote? Use our solar ROI calculator to get an estimate of what a solar investment could look like for you.