How much a solar panel cost
Solar panel costs have decreased drastically over the previous decade, and solar systems now provide homes with more value than ever before. Keeping in mind thatare only one component of a comprehensive solar system, other solar installation costs must be considered. We’ll examine why costs have decreased so substantially, the essential words for analyzing the cost of solar systems, and the numerous aspects that will eventually affect the price you pay for your solar system.
1- Examine your utility bill.
Solar panels generate their own energy and can thus significantly reduce, if not completely eliminate, your monthly electricity expenditure. The higher your bill, the more likely it is that you will save money by switching. However, you should keep in mind that power rates and use — the two primary costs on your bill — are subject to volatility.
2- Assess your exposure to sunshine.
More sun equals more energy generated and a larger possibility for solar savings. Certain states, such as Arizona and California, receive more sunlight each day on average.
The direction of your home toward the sun, the quantity of shade, and the type of roof all contribute to the output of a solar system. You may use the SolarReviews calculator to determine the efficiency of panels in your location. Enter your mailing address and the average monthly cost of your energy bill.
3- Calculate the cost of a household solar panel
The majority of the cost associated with solar panels is in the installation and purchase of the panels themselves.
Long-term expenses can more than compensate for the upfront outlay. “The majority of systems are low-maintenance and are meant to last 20 years or more with minimal change in the amount of electricity produced,” Nilsen explains.
Consider how much energy you consume on a regular basis – your consumption is reflected on your monthly electricity bill — and what size system will generate the required amount. Certain tools, such as the SolarReviews calculator, can estimate the size of your system for you.
According to the CSE, a typical home 5kW size system with installation costs between $3 and $5 per watt, or between $15,000 and $25,000. This pricing does not include any tax credits or incentives.
4- Seek out incentives
The government provides substantial incentives to homes that install solar panels as an alternative energy source. For instance, a federal residential tax credit allows taxpayers to deduct 26% of installation costs for systems installed by Dec. 31, 2022. The credit decreases to 22% in 2023 and ends in 2024 unless Congress renews it.
The federal tax benefit is nonrefundable, which means you cannot receive a refund for the savings. Rather than that, you may minimize — and potentially eliminate — your tax liability.
5- Maintain a close eye on trade policies
Changes in government trade policy have an effect on prices as well. President Trump slapped a four-year tariff on imported solar cells and panels in January 2018 that began at 30% and was expected to decrease by 5% each year until February 2022. Tariff rates were increased from 15% to 18% for the fourth year in a row in 2020. In 2018, the tariff resulted in a 16 cent per watt rise for the average consumer, amounting to a $960 increase for a six-kW system.
6- Make the connection
If you live in a region with high energy costs and an adequate solar rating, and you can afford the initial expenditure, it’s worth installing solar panels in your home while the 26% tax credit is still available – for the environment and your wallet. However, do not expect to completely reduce your electricity bill overnight.
If you decide to get solar panels, do your research and look for available incentives. Bear in mind that you are not required to purchase solar panels; you may also lease them. This has a reduced initial cost, but because you do not own the panels, they will not add value to your home and you may be ineligible for incentives.
Compared to a decade ago, solar panels are now far more affordable. Finding out how to evaluate solar system costs and how they work helps you grasp the most essential factors that affect solar system costs.