With energy bills and climate change on the rise, you may be wondering if it’s finally time to switch to solar power. Solar panel costs have been dropping precipitously this decade, but to many consumers, the up-front cost still feels prohibitively high.
There’s a huge range of prices in the solar market. We’ll take a close look at how energy efficiency and system size influence the cost of going solar. The cost-benefit analysis will also shift depending on your state’s specific solar incentives and sun exposure.
Read on to see how to get the best deal on your solar project and what you can expect to pay based on your home’s energy needs.
What Is the Cost of Solar Panels?
Solar panel prices are much higher in some areas than others, but we can approximate how much you’ll need to spend to become a zero-net energy household.
The average home in the U.S. consumes 886-kilowatt hours (kWh) of electricity per month. To offset this usage entirely, a 6kW system is your best bet. With the cost per watt averaging $2.95 nationwide, your price tag comes to $17,700 before factoring in the Federal Solar Tax Credit. After the 30% deduction, this comes to a total of $12,390.
It’s important to emphasize that the cost of solar panels fluctuates wildly depending on where you live, how much energy you hope to offset, system size, and the financing option you decide on. We’ll cover the major factors that dictate solar panel price points below.
Low Cost to Go Solar | $12,500 |
Mid Cost to Go Solar | $17,700 |
High Cost to Go Solar | $24,000 |
What Factors Affect the Cost of Going Solar?
Not all solar energy systems are created equal. Depending on how much you invest in energy-efficient solar panels and how many you plan to buy, the cost can shift up or down by thousands of dollars.
Plus, if you pay attention to your local tax benefits, you’ll save big — especially if you live in an area where solar rebates are available.
These five major factors decide how much you’ll have to pay to go solar:
- System Size
- Solar Panel Type
- Financing Option
- State
- Installer
Check out this video on how solar prices have trended over the years and why the prices have gotten so much cheaper.
Solar Panel Cost by System Size
One of the biggest factors in how much you’ll pay for solar is the system size you’re after. The more solar panels it takes to offset your energy usage, the more you’ll have to pay. Consult your utility bills to get a sense of how much electricity your home uses.
We can compare two households with drastically different energy needs to illustrate how much the price can change. Starting small, a cabin in New Hampshire that consumes only 600 kWh a month may only need to spend $8,000 to completely offset its reliance on the local electric grid. On the other hand, a multifamily home in the suburbs that burns through 1,200 kWh in a month will be on the hook for almost $15,000.
If you have high energy output but can’t afford a 12kW solar system, you may wonder if it’s still worth buying a smaller number of solar panels. There’s nothing wrong with doing this, but it will take longer for your solar panels to pay for themselves. Since you’ll still be paying a portion of your electric bill, your savings will drop, and your return on investment will be delayed.
There are two cases in which we recommend against this strategy:
- If your new extended break-even period is longer than 30 years: it’s unlikely you will ever make your money back, and you’ll end up losing money on a solar power system.
- If your primary motivation for switching to clean energy is to take advantage of a net metering program: states and electric companies will only pay for the excess energy your system generates. If you own a giant home full of appliances and gaming devices, it’s unheard of for a 4kW system to spin your utility meter backward.
You’ll still help reduce carbon emissions by taking any pressure off of your local electric grid. If you’d like to make sound financial and environmental choices, pay close attention to how savings on your energy bill stack up against the total cost.
On the other end of the spectrum, there’s one unfortunate outcome that only affects homeowners with very low energy consumption. Households that hardly use any electricity will easily produce enough solar energy to become energy-independent. However, these households already have such low utility bills that their monthly electric bill savings will be negligible. In such scenarios, you may never make enough back to justify the high installation cost.
Determine how many kWh your house uses in a month, and use the chart below to decide which solar system size is right for you.
Solar System Size (kW) | Average Monthly Energy Output (kWh) | Average Cost Before Incentives | Average Cost After Federal Tax Credit |
4kW | 600 kWh | $11,800 | $8,260 |
6kW | 900 kWh | $17,700 | $12,390 |
8kW | 1,200 kWh | $23,600 | $16,520 |
10kW | 1,400 kWh | $29,500 | $20,650 |
12kW | 1,600 kWh | $35,400 | $24,780 |
Solar Panel Cost by Solar Panel Type
Another big cost factor concerns the quality of solar panels rather than quantity. Some solar panels are much more efficient at turning available sunlight into the electricity that powers your home. Higher-efficiency panels will cost more, but they can save you thousands in the long run, especially if you live in an area with a good solar buyback program.
The best solar panels on the market are monocrystalline, costing around $1.25/W. You’ll see these sleek black panels in nice neighborhoods. Each panel is made up of whole silicon crystals, which have an efficiency rate between 17% and 22%. Because they’re so efficient, you won’t need to buy as many to power your home, partially counterbalancing their higher price point.
These panels work great in less-than-ideal conditions, making monocrystalline a strong choice for homeowners with partly shaded roofs. They won’t degrade as much as their polycrystalline counterparts on hot days. If you live in a sunny state like Arizona (explore outstanding solar solutions providers in Arizona), we strongly recommend spending the extra few dollars on these ultra-efficient panels. Another pro tip: the equipment warranties for higher efficiency panels are usually a few years longer.
The next best type of solar panels is polycrystalline. These are composed of fragments of silicon crystals rather than one single one. Their efficiency rate averages 16%, but they perform worse on shade and hot days. In terms of cost, polycrystalline panels are a much more affordable option, totaling approximately $0.95/W. A 6kW solar system composed of these panels will cost at least $2,000 less than a monocrystalline version.
Finally, there are thin-film solar panels, which have the worst efficiency rating of the group at 12%. They are the cheapest of the three major options, coming out to $0.75/W, but lack the longevity homeowners should look for. Thin-film panels last 10-20 years, just half as long as the best solar panels on the market.
We don’t recommend these panels for a residential setting, but they do come with a few benefits worth mentioning. Thin-film panels are much more lightweight and flexible than their crystalline counterparts, so they are worth considering if you want solar energy for your van, RV, or sailboat.
Remember, our prices are just averages and will still differ depending on your state and solar panel installation company. Use the chart below to get a sense of how the type of solar panel affects the total system cost:
Solar Panel Type | Average Cost |
Monocrystalline | $17,700 |
Polycrystalline | $14,160 |
Thin Film | $10,974 |
Solar Panel Cost by Financing Option
You’ll see four major financing options when dealing with a solar installer: cash purchases, solar loans, solar leases, and Power Purchase Agreements (PPAs).
With a cash purchase, you’ll pay for everything right off the bat. While this comes with the highest up-front costs by far, you can usually get a sizable discount for paying all at once, and the long-term savings are the strongest, which is one of the biggest differences between buying and leasing solar panels. Without monthly payments to a solar company, you’ll immediately feel the savings on your energy bill. Your buyback period is also shorter: 20 years down the line, you’ll have saved big by avoiding the interest rates hidden in loans.
If you’d rather pay over time, the next best option is a solar loan. Both loans and cash purchases qualify you for solar incentives like sales and property tax exemptions, so we always recommend homeowners invest through one of these paths. This financing plan will still transfer your system ownership, but you’ll repay the loan over five to 10 years. If you have good enough credit, plenty of solar providers will offer you a deal for $0 down, making the up-front cost nonexistent.
You’ll never get ownership of your solar system through a solar lease, but your energy bills will be much lower. Instead of owning your panels, they’ll belong to a third party, and you’ll pay to use their energy. You pay a fixed monthly fee to the solar provider, which is often lower than a loan and less than regular utility costs.
A Power Purchase Agreement (PPA) is almost the same as a lease. Instead of paying a fixed monthly rate, your payments will depend on how much energy you consume from the panels. With these last two options, you’ll spend less on electricity, but you won’t qualify for any rebates, and you won’t be investing in your property. You’ll unlikely benefit from a higher property value, as these systems are much more difficult to transfer.
However, both a PPA and a solar lease come with some perks. Because the solar installation company is still the technical owner of your panels, it’ll remain responsible for keeping them maintained. You’ll save big on the costs of repairs and cleaning. Plus, they’re much more accessible than a solar loan or cash purchase, which demand good credit or substantial capital.
If you have the money saved, there’s no better way to buy a solar plan than through a cash purchase. Compare the up-front fees, monthly costs, and long-term savings of each of the major financing plans:
Solar Financing Option | Average Upfront Fees | Average Monthly Cost | Average 25-Year Savings |
Pay in Cash | $17,758 | $0 | $22,379 |
Loan | $0 | $158 | $17,000 |
Solar Lease | $0 | $100 | $5,000 |
Solar Panel Cost by State
The cost of solar is heavily dependent on which state you live in. Some states have invested in the infrastructure to make clean energy cheap, while others have provided solar subsidies and financial incentives. Electricity is cheap and plentiful in some areas while expensive and scarce in others. Finally, residents of sunny states like California (explore recommended solar companies for California residents) are solar-viable for hundreds of days a year and won’t need as many panels to power a home.
States that get lots of sunlight will lead to more savings as well. Solar panels are much more efficient when solar radiation is high, so you won’t need to buy a giant system to offset your energy use.
If you live in an area with net metering or Solar Renewable Energy Credits, you can expect to make thousands back over the course of a decade. For example, New Jersey puts tons of power on the side of solar consumers. An N.J. homeowner with a 9,000 kW system can earn over $750 yearly by selling excess energy to the local utility company. Every U.S. resident will save 30% through the Federal Solar Tax Credit, but other tax incentives vary from state to state.
Finally, every region’s power grid charges a different rate. If you’re paying an exorbitant rate for electricity, your savings are expected to be significantly higher. On the other hand, if your utility bills are already low, solar energy may not be as sound of an investment. For example, states like Washington face above-average solar panel costs and relatively low electricity rates (check out solar incentive programs in Washington). There are still many cases where energy independence makes sense in Seattle, but the prices will be higher there than in the rest of the country.
Find your state below and see how much you can expect to spend on a solar panel system:
State | Average Monthly Energy Usage (kWh) | Average Solar System Size Needed (kW) | Average Cost per Watt ($) | Average Cost Before Incentives | Average Cost After Federal Tax Credit |
Alabama | 1,187 kWh | 7.92 | $2.45 | $19,404.00 | $13,582.80 |
Alaska | 654 kWh | 4.36 | $2.41 | $10,507.60 | $7,355.32 |
Arizona | 1,061 kWh | 7.08 | $2.44 | $17,275.20 | $12,092.64 |
Arkansas | 1,120 kWh | 7.47 | $3.06 | $22,858.20 | $16,000.74 |
California | 573 kWh | 3.82 | $2.86 | $10,925.20 | $7,647.64 |
Colorado | 706 kWh | 4.71 | $3.44 | $16,202.40 | $11,341.68 |
Connecticut | 731 kWh | 4.88 | $3.22 | $15,713.60 | $10,999.52 |
Delaware | 942 kWh | 6.28 | $2.75 | $17,270.00 | $12,089.00 |
Florida | 1,081 kWh | 7.21 | $2.58 | $18,601.80 | $13,021.26 |
Georgia | 1,098 kWh | 7.32 | $3.20 | $23,424.00 | $16,396.80 |
Hawaii | 544 kWh | 3.63 | $2.67 | $9,692.10 | $6,784.47 |
Idaho | 1,010 kWh | 6.74 | $2.93 | $19,748.20 | $13,823.74 |
Illinois | 767 kWh | 5.12 | $3.16 | $16,179.20 | $11,325.44 |
Indiana | 997 kWh | 6.65 | $3.63 | $24,139.50 | $16,897.65 |
Iowa | 873 kWh | 5.82 | $3.45 | $20,079.00 | $14,055.30 |
Kansas | 945 kWh | 6.3 | $2.39 | $15,057.00 | $10,539.90 |
Kentucky | 1,130 kWh | 7.54 | $2.34 | $17,643.60 | $12,350.52 |
Louisiana | 1,254 kWh | 8.36 | $3.17 | $26,501.20 | $18,550.84 |
Maine | 531 kWh | 3.54 | $3.45 | $12,213.00 | $8,549.10 |
Maryland | 1,005 kWh | 6.7 | $3.13 | $20,971.00 | $14,679.70 |
Massachusetts | 627 kWh | 4.18 | $3.54 | $14,797.20 | $10,358.04 |
Michigan | 676 kWh | 4.51 | $3.78 | $17,047.80 | $11,933.46 |
Minnesota | 793 kWh | 5.29 | $3.45 | $18,250.50 | $12,775.35 |
Mississippi | 1,193 kWh | 7.96 | $2.64 | $21,014.40 | $14,710.08 |
Missouri | 1,060 kWh | 7.07 | $2.85 | $20,149.50 | $14,104.65 |
Montana | 842 kWh | 5.62 | $2.42 | $13,600.40 | $9,520.28 |
Nebraska | 1,000 kWh | 6.67 | $2.83 | $18,876.10 | $13,213.27 |
Nevada | 935 kWh | 6.24 | $2.60 | $16,224.00 | $11,356.80 |
New Hampshire | 615 kWh | 4.1 | $3.61 | $14,801.00 | $10,360.70 |
New Jersey | 691 kWh | 4.61 | $2.95 | $13,599.50 | $9,519.65 |
New Mexico | 656 kWh | 4.38 | $3.39 | $14,848.20 | $10,393.74 |
New York | 603 kWh | 4.02 | $3.48 | $13,989.60 | $9,792.72 |
North Carolina | 1,077 kWh | 7.18 | $3.04 | $21,827.20 | $15,279.04 |
North Dakota | 1,091 kWh | 7.28 | $2.42 | $17,617.60 | $12,332.32 |
Ohio | 895 kWh | 5.97 | $2.98 | $17,790.60 | $12,453.42 |
Oklahoma | 1,132 kWh | 7.55 | $2.62 | $19,781.00 | $13,846.70 |
Oregon | 957 kWh | 6.38 | $3.13 | $19,969.40 | $13,978.58 |
Pennsylvania | 837 kWh | 5.58 | $3.06 | $17,074.80 | $11,952.36 |
Rhode Island | 597 kWh | 3.98 | $3.61 | $14,367.80 | $10,057.46 |
South Carolina | 1,119 kWh | 7.46 | $2.89 | $21,559.40 | $15,091.58 |
South Dakota | 980 kWh | 6.54 | $2.39 | $15,630.60 | $10,941.42 |
Tennessee | 1,217 kWh | 8.12 | $2.97 | $24,116.40 | $16,881.48 |
Texas | 1,168 kWh | 7.79 | $2.77 | $21,578.30 | $15,104.81 |
Utah | 793 kWh | 5.29 | $2.69 | $14,230.10 | $9,961.07 |
Vermont | 565 kWh | 3.77 | $3.14 | $11,837.80 | $8,286.46 |
Virginia | 1,117 kWh | 7.45 | $3.04 | $22,648.00 | $15,853.60 |
Washington | 1,037 kWh | 6.92 | $3.25 | $22,490.00 | $15,743.00 |
West Virginia | 1,078 kWh | 7.19 | $3.50 | 20994.8 | 14696.36 |
Wisconsin | 703 kWh | 4.69 | $2.92 | 15992.9 | 11195.03 |
Wyoming | 867 kWh | 5.78 | $3.41 | 14854.6 | 10398.22 |
Find Solar Cost Estimates In Your State
Solar Panel Cost by Installer
Every solar installation company offers different types of solar panels, warranty packages, and financing options. You can spend less or try to go the DIY solar panel installation route, but you might end up with less efficient solar panels or worse damage protection.
If you want to cut costs, cheaper brands like Sunrun are primarily geared toward customers working within a tight budget. It specializes in solar leases with no down payment and still offers a suite of highly efficient solar panels in the 18 – 21% range.
On the more expensive side of the industry, companies like SunPower (explore our review of SunPower solar products) sell solar systems worth thousands of dollars more, but you get what you pay for. Its Maxeon panels have the highest energy efficiency on the residential market, so your savings will be huge if you can foot the price. Panels from the M Series operate in the extraordinarily high 420 – 440 Watt range but take up no extra space, making them a great option for homeowners with limited roof space.
We recommend contacting a sales agent at the companies that catch your eye to get a more precise idea of how solar costs differ by provider.
Company | Logo | Star Rating | Best For | Service Area | Link |
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Highest Quality Panels |
All 50 states |
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Best Damage Protection |
20 states |
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Best Solar Financing |
22 states |
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Best Customer Service |
9 states |
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9 states |
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Fastest-Growing Solar Provider |
7 states |
Company | Star Rating | Best For | Service Area | BBB Rating |
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Highest Quality Panels |
All 50 states |
A+ |
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Best Damage Protection |
20 states |
A+ |
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Best Solar Financing |
22 states |
A+ |
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Best Customer Service |
9 states |
A+ |
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Best Customization Options |
9 states |
A+ |
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Fastest-Growing Solar Provider |
7 states |
F |
Additional Costs & Hidden Fees of Going Solar
Your initial purchase of solar panels is rarely the only investment you’ll make. Keeping systems at peak performance for 30 or even 40 years inevitably means making repairs, replacing parts, and paying for general maintenance.
We’ll review the additional maintenance costs and hidden fees that won’t show up on the price tag of your solar panel system:
Damaged Panel or Inverter
Maintenance costs for solar panel systems vary from state to state, but pieces sometimes break. If you live in an area without heavy snowfall in the winter, there’s usually less damage incurred that needs to be repaired. Higher-end monocrystalline panels are more durable and should break less often than their cheaper counterparts, but their components also cost more to replace.
To avoid paying thousands of dollars for a replacement inverter, look for a solar company with a competitive warranty package and damage protection: we think Momentum Solar has the best warranty on the market.
Roof Repairs
If your roof isn’t structurally sound, you have to repair it before installing a solar system. If it leaks with the solar panels already attached, the repair cost can run into the thousands. Of course, this entirely depends on the details of your warranty agreement with your solar provider and its panel manufacturer. ADT Solar is one of the only solar companies that will cover repairs for roof leaks and holes. Check out our review of ADT solar.
Animal Damage
While not incredibly common, critters like squirrels, rats, and mice burrow under solar panels and build nests there, often chewing through important wires. You can buy critter guards ahead of time to prevent this, and you may end up paying for additional repairs later if you skip this step.
Tree Trimming or Removal
If tall trees branch over your property and block the sun, you may have to hire a professional tree trimmer to clear them away.
Cleaning
If you’re looking to hire out for cleaning, you’ll be looking at an additional $200 each time you contact a service. This number will be less if you have fewer than 20 panels.
Permits and Inspections
Solar permits cost around $300 in most major cities and can go as high as $500 in states like Colorado. Speak with your sales agent about these fees, which may be included in the price and handled by your solar installer.
Sales Tax
With an average combined sales tax of 6.44% in the U.S., you can expect to shell up around $900 in sales tax for a new solar system. However, 25 states offer sales tax exemptions for solar energy. In Texas, for example, you are 100% exempt from a sales tax for solar purchases.
Read also: Who is Eligible for Solar Tax Exemption
How Can You Save Money When Going Solar?
To score a big discount on your solar purchase, you should first research the solar incentives specific to your state or city. Then, look into the financing options that offer the best deal on the type of system you need.
We’ll go over each in detail, but these are the top five ways you can save money on your solar system:
- Take Advantage of Solar Incentives and Subsidies
- Opt for Higher Efficiency Panels
- Install a Solar Battery
- Buy a Monitoring Display
- Optimize Your Panel’s Positioning
Take Advantage of Solar Incentives and Subsidies
Tax exemptions and net metering can return thousands of dollars to your bank account. The Federal Solar Investment Tax Credit is the easiest and most powerful, which can save you $4,000 – $8,000. Make sure to tap into local incentives as well: you can investigate your neighborhood’s solar benefits in the Database of State Incentives for Renewables and Efficiency.
Opt for Higher Efficiency Panels
You can cut costs in the short run by buying low-efficiency polycrystalline panels. However, your projected 25-year savings with Tier-1 solar panels are much higher. You should be able to avoid expensive repair costs with higher-quality panels as well.
Install a Solar Battery
Some of the top solar batteries like Tesla’s Powerwall+ can cost you an additional $10,000, so seeing them in a section on savings may seem strange. However, solar batteries are a great financial decision in some cases.
If the net metering benefits are high where you live, you want as much excess energy as possible. An energy storage system you can rely on at night means you’ll rarely take anything out of the power grid.
Batteries are an especially good idea if your state has low sunlight exposure or frequent power outages.
Buy a Monitoring Display
Buying a system with a monitoring display is a great way to avoid unnecessary repair and maintenance costs. You’ll get up-to-date statistics on how much sun and shade each panel gets and parts that aren’t functioning.
To build upon this ability, prioritize companies with strong customer reviews and manufacturer warranties in your search. Some installation companies come with production guarantees. If your energy levels slip, they’ll be financially responsible.
Optimize Your Panel’s Positioning
Discuss optimizing your solar system’s design with your provider to get the most sunlight. If placing your panels on a flat surface, adjust the tilt angle to 28°, and always try to aim your solar panels toward the south.
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When Will You Break Even on Your Solar Investment?
A solar buyback period is the amount of time it takes for your electric bill savings to surpass the overall cost of the system, which is a key factor for many when determining whether or not converting to solar is worth the investment. This is the magic number: once your solar loan is paid off, you’ll be free from energy costs for as long as the panels last.
On average, it takes between seven and twelve years to break even on installation costs. With most panels lasting 25 – 35 years, this leaves you a decade at least to reap the rewards of solar energy.
To calculate your solar payback period, divide your solar panel system’s cost by your yearly electricity bill savings. For example, if you spent $15,000 and now save $2,000 a year, your solar system will take 7.5 years to pay for itself. Using highly efficient solar panels will place you in the clear even quicker.
With electricity prices skyrocketing nationwide and solar panels getting cheaper, you can expect the amount you save to increase, meaning payback periods could soon shrink to five years or less.
How Have Solar Prices Evolved Over the Years?
Solar prices have declined immensely over the past few decades, and there is lots of good news for supporters of sustainable energy. The manufacturing process for photovoltaic (PV) cells has been optimized so much in the past 10 years that prices have dropped almost 70%. High-efficiency panels for homeowners cost $7.53/W in 2010 and now hover around an average of $2.65/W.
This is especially impressive considering how much more energy-efficient solar cells have become. It’s rare for a product’s price to drop and quality to improve rapidly, and the rate of improvement is expected to trend the same way through the rest of the decade.
There has been an uptick in solar costs since 2021. The pandemic disrupted the global supply chain, dramatically increasing shipping and labor costs. Solar customers should be relieved to know this increase was felt universally across the whole economy and isn’t a harbinger of expensive solar cells to come.
We can give you both good news and bad regarding the raw materials that go into a solar system. The conflict in Ukraine made aluminum, steel, and copper more difficult to source, all of which are critical components in a solar system’s base and wiring. On the other hand, we can confidently forecast cheaper access to the materials that go into PV modules, such as cadmium telluride and crystalline silicon.
Looking into the future, we can expect the price of solar panels to recover quickly from the world-historical events of the last two years and continue to trend downwards.
FAQs About the Cost of Solar Panels
How much do solar panels cost for a 1000 sq. ft house?
A 1000 sq. ft house should consume approximately 880 kWh of electricity. To completely offset this energy usage, you would need to spend $13,000 after factoring in the Federal Tax Credit.
How much do solar panels cost for a 1500 sq. ft house?
A 1000 sq. ft house should consume approximately 1,100 kWh of electricity. To completely offset this energy usage, you would need to spend $15,500 after factoring in the Federal Tax Credit.
How much do solar panels cost for a 2000 sq. ft house?
A 2000 sq. ft house should consume approximately 1,325 kWh of electricity. To completely offset this energy usage, you would need to spend $18,000 after factoring in the Federal Tax Credit.
How much do solar panels cost for a 2500 sq. ft house?
A 2500 sq. ft house should consume approximately 1,580 kWh of electricity. To completely offset this energy usage, you would need to spend $23,000 after factoring in the Federal Tax Credit.
How much do solar panels cost for a 3000 sq. ft house?
A 3000 sq. ft house should consume approximately 1,840 kWh of electricity. To completely offset this energy usage, you would need to spend $27,000 after factoring in the Federal Tax Credit.
Can I use cheap solar panels?
Cheap solar panels still have a lot of benefits. They will still reduce your carbon footprint, lower energy bills, and increase your property’s value. At the same time, they will degrade more quickly and produce less power than their more energy-efficient counterparts. It will take much longer to break even on your initial investment, but you should still get a return if you buy from a trusted solar panel brand.
How long does it take to pay off solar panels?
The average U.S. household will consume 886 kilowatt hours (kWh) of electricity in one month. With each one of these kWh costing you approximately 16 cents, we can calculate an average monthly electric bill of $143.
This means that your solar panels only need to cover 75% of your electricity usage to give you $1,287 of yearly savings. In 10 years, you’ll have gotten a complete return on your investment. While solar panels lose efficiency after their first decade, maintaining them should increase their shelf life. Plus, electricity costs are rising faster every year, so we can expect savings to only go up from here.