The national average for solar panels costs about $16,000 for a 5 kilowatt system before tax credits. However, some solar panel systems can run more than $35,000. The exact price a homeowner will pay depends on a number of variables, including geographic location, home size, solar system size and solar installer rates.
It’s important to remember that the investment for a solar system covers more than just the panel costs.
Pro Tip
“Pricing for solar is turnkey, so it includes permits and installation. If you’d like a home battery for resilience when the power goes out, they can add a significant cost to your home solar system price.” – Roger Horowitz
On the bright side, solar panel costs have decreased by more than 50% in the last 10 years, according to the Solar Energy Industries Association (SEIA). The typical solar energy system is priced around $16,000, although the actual cost fluctuates depending on a system’s size, regional rates, and the solar installer you choose. The easiest way to find an accurate price is to speak with a local installer.
Solar Financing Options
Your final cost will also hinge on the solar financing route you take. For homeowners who don’t have the capital to invest in a solar system outright, there are other financing options to consider. However, some of them come with drawbacks.
Finance Yourself
Homeowners opting for an upfront payment (aka cash) for their solar system can expect a higher return on investment. They will bypass interest charges and are eligible for solar rebates and incentives such as the 30% solar tax credit for photovoltaic solar panel installation.
Solar Loans
Solar loans can be a good option if you want to own your system, as they still make you eligible for incentives, but you won’t have to pay for everything upfront. These loans work similarly to loans like you’d see for cars or other home improvements, so you’ll need to compare solar loan providers, rates and other factors. However, it’s important to note that the accruing interest of 4% to 7% over time can dramatically increase your total costs.
Solar Leases and PPAs
These options provide homeowners the opportunity to lease systems instead of owning them outright. A solar lease is an agreement between the homeowner and the solar provider that allows them to install solar panels on their house at minimal to zero costs for a fixed monthly payment. A solar PPA enables homeowners to purchase power from a solar company or a third party at a fixed rate per kilowatt hour. Although solar leases and PPAs are less expensive upfront, homeowners are ineligible for rebates and incentives, which can help them save 30% on installation costs.
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