Until money starts growing on trees, every purchase we make, big or small, will be driven by the cost. We spend time examining the cost versus the benefits and debate whether the purchase will put us in a better spot.
Investing in solar energy is no different. It’s critical that you weigh the cost versus the benefits that it will provide you. The first step to finding out if solar is an option for you is gaining an understanding of the cost. This blog is a guide to help you determine the potential cost of installing your solar system.
What is the cost of a solar panel?
There are many options when it comes to selecting solar panels for your system. Each of these options come with a different price tag. The options are:
- The type of panel - polycrystalline (lower efficiency, but more budget-friendly) vs. monocrystalline (higher efficiency, but fewer panels and space is needed)
- The size of the panel (power output)
- The brand (tier 1 manufacturer versus tier 2 or 3)
The cost of solar panels continues to drop thanks to product improvements and manufacturing efficiencies. As of January 2020, the average cost for solar panels is as follows:
- Polycrystalline panels - $0.40 - $0.60 per watt
- Monocrystalline panels - $0.60 - $0.90 per watt
*The most common size panel is 330 watts.
Other Costs to Consider When Going Solar
We discussed the cost of a solar panel in the paragraph above, but there is much more that goes into the final cost of a solar electric system. A complete system has panels, inverters, wiring, and racking. Each solar system is custom to meet the owner’s needs, which means the type of components and the quantity needed will vary based on the system’s final design.
These are the factors that will impact the final price of your solar system:
- The energy consumption that needs to be covered
- Type of installation - roof mount or ground mount
- Roof type - metal, shingle, or flat
- The type (string, micro or power optimizers), brand, and quantity of your inverters
- Shading and weather patterns in your local area
- Interconnection cost - This will vary based on your local utility company. There are also costs that will vary based on the distance of the system to your interconnection point
Here's a more in-depth look what goes into the installation cost.
How Much Does it Cost to Install solar?
The good news is the cost of solar continues to decrease. According to a recent report by NREL, the price for residential and commercial solar has dropped 61.3% since 2010, and it continues to decrease as processes and equipment increase in efficiency.
The average total install cost of a solar system in the mid-Atlantic region was $2.19 per watt as of January 2019. This is the average from both residential and commercial installations. The per watt price will decrease the larger the system is, and likewise, the price will typically go up for smaller systems. Are you considering waiting for pricing to continue to drop? Don’t! Now is the time to go solar. The Investment Tax Credit of 26% decrease to 22% at the end of the year.
Cost of Installing Solar for Homes
|Solar System Size||Total Installed Cost
|Cost After the 26% Federal Tax Credit|
|$60||5 kW (16 330W panels)||$21,870||$16,184|
|$120||10 kW (32 330W panels)||$31,900||$23,606|
|$180||15 kW (48 330W panels)||$45,465||$33,644|
Cost of Installing Solar for Business
|Solar System Size||Total Installed Cost
|Cost After the Tax Incentives|
|$600||50 kW (157 330W panels)||$124,100||$60,448|
|$1,200||100 kW (438 330W panels)||$220,900||$107,598|
|$2,400||200 kW (556 330W panels)||$398,600||$194,154|
The Avoided Cost of a Solar Energy Investment
It’s important to consider the avoided costs of a solar investment. If you have a monthly electric bill of $150, you will save over $30,000 in payments to your electric company and nearly $9,000 in taxes with the Federal Solar Tax Credit. Likewise, a $575 average monthly electric bill will save $172,349 on their electric and $32,400 in taxes. Plus, businesses can take advantage of accelerated depreciation the year the system is placed into service. That’s real money that you will have to pay without solar.
|Solar System Size||Total Installed Cost||Federal Tax Credit||Depreciation||Net Cost||ROI||30 Year Savings|
Some states provide additional grants and tax credits. Check with your installer to confirm available incentives in your region.
The solar panel costs listed above are averages. Although they are good for setting a reference point, your system cost could be more or less depending on your electric usage and other factors at the installation site.
Find out how much a solar system would cost for you by requesting a free quote using the button below. This will start a simple process that will give you the tools to decide if solar is right for your home or business
If you're not ready for a quote, start with our Solar Buying Guide. This free guide will give you an in-depth look at solar energy.