The cost of installing solar panels can vary based on:
- Nature of the job (DIY or professional).
- Your location.
- The brands of the equipment selected.
- Your energy consumption.
It’s a fact that 95% of homeowners hire a local solar company for the installation process. This article will detail the factors that can contribute to the installation cost of solar panels.
Factors Affecting Solar Panel Installation Costs
Manufacturer and Equipment:
Brands with good quality equipment and reputable backgrounds will have higher prices for their products than new brands. However, expensive solar panels don’t always mean that those panels will have better performance.
Inverters also have an impact on the price of a residential solar system. String inverters cost less than microinverters and also have lower electricity production. So, if you want good performance, go for microinverters.
Choosing monocrystalline or polycrystalline panels doesn’t affect the price drastically. Mounts or racking will also increase the price. This is especially important if you are in an area with bad weather. Investing in durable racking will add more cost to the system but will benefit you in the long run.
Geographic Location:
If your location hosts many businesses and installers, their competition will set the price for a solar installation. This means that one solar installer might offer a lower price for the same installation another offers.
The cost is not just limited to installation but also local policies, labour costs, solar panel costs, job volumes, and overhead costs. If your home typically receives less sunlight, you’ll need to invest in more panels or a few highly efficient ones.
Sunlight levels can affect the number of solar panels you need to buy to power your home. The Investment Tax Credit (ITC) is a federal solar tax credit covering about 30% of your solar installation cost. This significantly decreases solar installation prices. You can also look for other incentives to reduce the cost further.
Solar System Size:
Solar system size is measured in kilowatts (kW). This tells you the peak power solar panels can produce in ideal conditions. With kilowatt-hours (kWh), it’s a little different. This tells you about the energy production of your solar panels and the energy consumption of your home. The size of your solar system is directly proportional to your energy consumption.
You could live with a smaller system if you don’t use much energy. However, you’ll require a more extensive system if you use too much electricity. This will also dictate the cost of the solar system. Try to go for cost-per-watt systems. These systems are bought in bulk and typically cost less due to lower overhead costs.
The Right Price
Experts say a reasonable price for professionally-installed solar systems in 2022 is $2.60-$3.20 per watt. If some company charges you more than that, look for other offers. Going less than $2.60 per watt can put you at risk of getting a mediocre customer service or a low-quality installation.
Solar companies offering these low prices are only looking to make quick cash and cannot provide you with the customer support you require for the lifespan of your solar panels. So, always ensure that you go for a solar company with a good reputation and a reasonable price rather than shady ones.
Solar Battery Costs
To achieve energy independence, you should invest in an energy storage option, preferably a solar battery. They can cost a minimum of $10,000. That’s a hefty sum, but the solar tax credit covers solar batteries.
Look out for other battery incentives so that you can get more benefits. Along with federal tax credit, owning battery storage with a solar panel system will set you back $20,000. Battery installation costs depend upon the number of batteries and the battery manufacturer.
Even expensive batteries like LG Chem and the Tesla Powerwall are popular due to increased power outages. Homeowners can also save money on electricity bills if they have Time-of-Use electricity rates.
Solar batteries are a significant part of the money-saving process. However, most homeowners are happy with having a solar panel system. A solar battery feels more like a luxury.
Selecting The Right Solar Installation Company
You should always look for an installer with the following requirements:
- A minimum of 1 NABCEP-certified installer.
- Has been in business for more than five years.
- Has an employee range of 15-20.
- Hires their installation crew.
If a company’s charging you a higher price, carefully check the company’s background and see if the price is justified. You could also be paying the premium installation rate without any benefits.
However, suppose an installation company charges way less than the average price. In that case, you should also be wary of that company since you might be at risk of receiving low-quality equipment or a poor installation.
You can find many online solar calculators to help with your savings and cost estimates. With this, you can contact installation companies based on your budget. The calculator can also get the details for your home and find you a suitable solar installer as per your need.
The solar panel cost depends upon your electricity consumption and geographic location. To determine your savings, you don’t need to put complex numbers in the solar calculator. Just put in your monthly electric bill and your address.
Then the solar calculator will calculate your energy consumption and your local utility company’s electricity rates. All of this will depend on a few factors:
- The long-term worth of solar panels.
- The number of solar panels needed to power your home.
- Your savings with solar panels.
- The cost of the solar panels.
Even if they were expensive in the past because of being a new technology, solar panels are now affordable, thanks to solar incentives. These rebates and incentives bring the price of a solar system down by a lot.
Plus, solar panels meet the investment put in them quickly and then turn to benefit you by saving your money on electricity bills. Moreover, you don’t produce harmful pollutants that can harm the planet.
$20,000 is a lot, but federal incentives waive 30% of that cost after one year. You can also finance the system in other ways, like PPAs, solar loans, and leases. You can expect savings from $1,000-$1,600 annually on electricity bills with solar panels.
However, savings will vary according to your energy consumption, state net metering policy, the cost of electricity, and system size. You should expect a solar payback period of 8-11 years, after which you can enjoy free solar electricity for fifteen years.