The US has a bright future when it comes to adopting residential, commercial, and utility-scale solar technology.
Solar energy has been rapidly growing in popularity in the United States for several years now. Since 2014, in fact, the average price of solar PV panels has dropped almost 70%. This level of affordability has made solar energy economically competitive with conventional energy sources in most states.
Homeowners across the country have chosen to add solar panels to their property for both financial and environmental reasons. Recent estimates project solar energy to account for 30% of all electricity generation in the US by the year 2030.
If you are considering adding solar panels to your home, you will want to do some research first. That’s why we’ve put together this article. It covers the basics of solar energy so that you can determine whether it’s right for you.
Solar power technology leverages one of Earth’s most powerful and most dependable energy resources: THE SUN. Solar power technology, in its various forms and configurations, captures solar radiation, also known as plain old sunlight, and converts it to usable electricity, which can be used for a wide array of applications.
Find Energy has prepared this guide so you can learn more about solar energy, especially if you’re considering getting a solar power system for your home or place of business. By reading this guide, you’ll be able to talk comfortably and confidently with your solar contractor, knowing that you’re getting the right solar system for the right reasons and for the right amount of money.
So let’s start, right at the very beginning.
A Brief History of Solar Energy
Sunshine empowers life on Earth. Since early on in human history, people have used solar energy to enhance their quality of life—from starting fires, to heating houses, and nowadays, to power modern houses and places of businesses.
Solar panels are a relatively recent discovery, but humans have been harnessing the power of the sun since at least the 7th century when glass was used to focus the sun’s beams to light small fires.
A French physicist named Edmon Becquerel discovered the photovoltaic effect in 1839. This discovery was foundational to the field of solar energy. It enabled later scientists to come up with the blueprints for what would go on to become modern solar panels.
For example, in 1873, Willoughby Smith found that selenium could be used as a photoconductor.
Then Charles Fritts created the first solar cells from selenium in 1883.
Finally, Daryl Chapin, Calvin Fuller, and Gerald Pearson invented the modern form of the solar panel in 1954 while working for Bell Labs. The trio was the first group to create silicon solar labs, which is still what we use today.
“Solar One”, the very first solar residence, was developed at the University of Delaware in 1973. Then throughout the rest 70s, technological developments made solar panels more cost-effective for consumers. This affordability is what has led to the creation of the current residential solar energy market.
Consumer demand for solar energy continues to rise, as prices for solar panels continue to drop over the decades, prompting more than one million installations in the US as of 2016.
Key Solar Energy Terminologies
If you are new to solar energy, then there are a number of key terms that will be unfamiliar to you initially. This section will help you get up to speed faster by defining some of the most important of those terms for you.
Also commonly referred to as renewable energy, alternative energy describes energy derived from sources such as the sun, wind, tidal, and geothermal heat, which are naturally renewable and cause less-to-no harm to the environment.
Balance of System (BOS)
BOS describes all physical components of the solar system outside of the panels, typically including: inverters, wires, fuses, switches, fault detectors, racking and mounting hardware, monitoring system, etc.
The electric grid, or just grid, is the infrastructure that transports electricity from suppliers to consumers. Grids are made up of distribution lines, transmission lines, and generating stations.
Federal Tax Credit
When you install a solar system, you may be eligible for a federal tax credit or other solar incentives, which may cover a percentage of the total amount you spent on purchasing and installing solar panels. The federal tax credit is temporary and declining year-over-year.
Often described as the brain of the solar power system, an inverter is a device that converts the direct current (DC) electricity generated by the solar power system into the alternating current (AC) electricity that powers most houses and places of businesses.
Kilowatt (Kilowatt Hours)
You will often see kilowatt shortened as kW and kilowatt-hour shortened as kWh. These are the units that energy consumption is measured in. Kilowatts measure the demand for power at a given point in time. Kilowatt-hours measure the consumption of power in an hour.
A meter is what your utility company uses to monitor how much electricity you consume in a month. Meters are also part of solar systems. They tell you how much energy your system has generated over a specific period of time.
A mounting system is what holds your solar panels in place. Roof-based mounting systems are most common but there are also ground-based options for homeowners who can’t add solar panels to their roofs.
Net metering is an electricity billing practice, of which there are several different types. The main thing to know is that it’s the practice of giving you credit for the excess solar energy that you generate and send back into the electrical grid.
Peak Sun Hours
Peak sun hours refers to the quality of the sunlight absorbed by solar panels. Expressed in kilowatt-hours per square meter (kWh/m2), peak sun hours refers to an hour’s worth of sunshine at an irradiance of 1 kilowatt per square meter (kW/m2)
Photovoltaic (PV) refers to the solar panel technology responsible for the direct conversion of sunlight into electrical power. In most cases, PV installations are commonly found on the ground, walls, rooftops
Power Purchase Agreement (PPA)
A PPA is a popular type of solar financing option. It enables consumers to add solar panels to their homes for little or no upfront cost. In exchange for this, the customer agrees to purchase power from the solar company for a period of years.
A solar dealer pertains to a company involved in the selling of solar products and related services such as solar installation and maintenance.
A solar installer, sometimes referred to as a solar contractor, pertains to a professional or a company that specializes in the installation of solar power systems for residential, commercial, and utility purposes.
Key Components of a Solar System
A solar energy system itself does not create its own energy. Instead, a solar energy system harnesses the sun’s energy and converts into usable electricity
The vast majority of solar energy systems are built out of three or four critical components: panels, inverter(s), mounting, and solar battery storage units (optional). In this section, we will examine why each of these components is needed.
Often described as the face of solar technology, photovoltaic solar panels are the first thing you see when looking at a solar system. Solar panels are what generate direct current (DC) electricity out of solar radiation or sunlight.
An individual solar panel is made up of many solar cells just as an entire solar power system is made up of several solar panels, collectively referred to as a solar array.
In a residential or commercial solar setup, solar panels can typically be seen installed on the roof, but they can also be ground-mounted. Solar panels are tilted at a certain angle to allow them to absorb the most amount of sunlight possible throughout the day.
There are three types of solar panels available on the market: monocrystalline solar panels, polycrystalline solar panels, and thin-film solar cells. More on that later.
Inverters aren’t as visible as solar panels are, but they play just as crucial of a role in enabling solar energy systems to function. An inverter’s job is to take the DC electricity that panels generate and transform it into AC electricity so that the energy can be used to power a home.
There are two common types of inverters. String inverters collect electricity generated by the solar system in one central location for conversion. Microinverters, on the other hand, convert DC to AC electricity right underneath each of the individual panels.
The inverter works throughout the lifetime of your solar system but has a warranty of around ten years, while solar panels can last over 25 years. The inverter tends to be the most likely component to have faults, so it's well worth investing in a high-quality brand from the outset.
Mounting is the final essential component of a solar energy system. Mounting units typically consist of racks and mounts, which aren’t electrical components. Its job is to keep the panels and inverters of a solar energy system safe and secure.
There are three types of solar system mounting units.
Roof mounts, the most common type of mounting units, are used to attach a solar array to the roofs of residential homes and commercial buildings, as well as on boats, RVs, and vans.
Ground mounts attach a solar array on concrete piers on the ground for maximum stability.
Pole mounts, the least common among the three, attract a solar array on a pole, raising panels higher than standard ground mounts
Some mounting can also tilt your panels at the optimal angle for capturing light from the sun as it shifts throughout the day. This can help you increase the amount of energy that you generate from your system.
Solar Battery Storage Units
You don’t technically need a solar battery storage unit to use a solar energy system. However, understanding how solar batteries work and realizing that they are very useful may save you money in the long run depending on the initial cost of the solar battery system.
With a battery, you can power your home with solar energy even when the sun isn’t shining. This can lower a consumer’s electricity bill by significantly more than what solar panels can accomplish on their own. Solar batteries enable you to store the excess energy that your solar panels generate throughout the day.
How Solar Panels Work
As previously discussed, modern solar equipment consists of three or four parts:
In this section, we will cover how all of these pieces work together to generate electricity that can power your home.
Photovoltaic (PV) solar panels are the most popular type of panel on the market. They are built of numerous solar cells, which are made of silicon. The solar cells are arranged into a positive and negative layer so that they can create an electric field like a battery does.
Energy from the sun’s light hits these solar cells and the atoms lose electrons when they do. These electrons flow through the circuit of solar cells and generate DC electricity.
However, the United States uses AC electricity in its power grid. So solar energy systems have to convert the DC power they generate into a usable AC form. This is done by solar inverters.
Once the system’s inverter has successfully completed the conversion, the energy can be used to power a home.
What Happens to Excess Solar Energy
Sometimes a solar energy system generates more power than a home uses during a particular day. When that occurs, there are three things that can happen.
First, if no other systems are in place, the energy may simply go to waste. But this is rare.
Many homes have installed solar battery units alongside their solar panels. These store any excess energy that the panels create so that the homeowners can use it at night, in the early morning, or at any other time that their energy needs exceed what their solar powers produce.
Net metering is an alternative to this that essentially provides the same benefits. It involves sending excess solar energy back into the electrical grid. Then the homeowner that generated that power gets a credit on their electricity bill that reduces the amount they’re charged proportionally to the excess energy they sent back into the electrical grid.
The Basic Science Behind Photovoltaic (PV) Panels
Photovoltaic (PV) solar panels consist of numerous solar cells. Solar cells are created from silicon, like semiconductors. Much like a battery, these solar cells have a positive layer and a negative layer, which together forms an electrical circuit. When sunlight hits the solar cells, an electrical charge flows through this circuit and generates electricity.
Multiple cells create a solar panel, and multiple panels create a solar array. The more panels you have, the more solar energy you can generate.
Solar panels generate DC electricity. The US power grid, however, uses AC electricity, which is cheaper to transmit over long distances. It’s because of this that most solar power systems rely on inverters to convert DC electricity to usable AC electricity.
The Average Costs of Solar Panels
The answer to the question "How much do solar panels cost?" is not as straightforward of an answer as many would like, as the price of a complete solar energy system can vary by quite a bit.
There are three main factors that can impact the price you pay: your location, the size of the system that you purchase, and the brand that you buy from.
For example, on average a 2 kW solar panel system costs about $5,620 before tax incentives, but a 25 kW system costs $70,250. The average solar system is 8.2 kW and costs around $22,490 before tax incentives.
There’s also some variability in pricing for similar-sized solar systems in different states. For example, a 6 kW solar panel system in Arizona costs an average of $12,900 to $15,180. However, a system that’s the same size would cost you between $19,440 and $20,400 in Iowa.
Finally, as a general rule, solar panel brands with the best reputations are typically able to charge more for their systems than those with poor or still-forming reputations.
According to the Department of Energy, while prices vary from state to state and from manufacturer to manufacturer, the average cost of installing a solar power system is dropping dramatically and consistently year after year.
In the last few years, for instance, solar costs in the US have seen a significant reduction when China poured low-cost financing into its solar sector, exponentially boosting solar panel production. The Department of Energy’s goal is to cut solar costs by half by 2030, which makes today the perfect time to invest in a solar power system.
The Finances of Choosing Solar
The average cost of a solar energy system ranges from as low as $9,255 to as high as $28,000. The amount that you have to pay for one will vary based on factors like how much power your home needs, your location, and the reputation of the company that you buy from.
Most U.S. consumers who purchase solar panels are also able to save money on their systems with tax incentives. For example, there is currently a federal tax credit of 26%for systems installed in 2022. This credit will be reduced to 22% in 2023.
Paying for a Solar Energy System
There are two ways that you can pay to add a solar energy system to your home.
The first is to pay for the system outright with cash. Cash payment is usually if you have enough cash liquidity and you want to maximize your return on investment, which in a typical solar installation is around 10% ROI.
The second is to secure financing that allows you to begin enjoying the benefits of solar energy without having to pay for everything at once. This option is usually your best bet if you lack the funds to pay for a solar system outright, but still want to take advantage of reduced electric bills. Financing is also good option if you want be eligible for all rebates and tax incentives
If financing appeals to you, there are several options to consider. One of the more popular choices is to find a company that offers solar leases (also called PPAs). These involve leasing solar panels instead of buying them. You also have the option of taking out a loan or mortgage to finance your solar system. In these scenarios, it is important to understand how long it takes for solar panels to pay for themselves.
Solar Energy Systems can be a Good Investment
If you live in an area that receives ample sunlight, then it is likely that your solar energy system will pay for itself over time. That is because when you use energy that is generated by your solar system, you aren’t using power from the electricity grid, which reduces your monthly energy bill potentially by a lot.
Solar panels often last between 25 and 30 years. If you paid $15,000 for a system that saved you $100 on your monthly electricity bill, you would break even at 12.5 years. Then you would essentially be profiting every month that you use the solar panels after that.
That being said, the ROI calculation for a solar energy system can vary quite a bit based on how much you pay for the panels and how much they can save you in electricity costs each month.
Consumers who are interested in making an investment in a solar energy system will want to perform their own cost-benefit analysis to verify that they are making a smart financial move.
Ways to Save Money on Solar Power
While the initial cost of investing in a solar power system can be substantial, there are easy and readily available ways for you to save money on your solar installation.
Installing a solar system in your home qualifies you for a federal solar tax credit which amounts to 26% of your total equipment and installation expenses for all systems installed in 2022. It’s best to take full advantage of this sooner than later though, as the federal solar tax credit is set to decline over the course of the next few years, with a reduction to 22% in 2023.
Depending on where you live, there are net metering programs that allow you to funnel excess solar generation back into the electrical grid, in exchange for a credit from your utility company.
Additionally, installing a solar system in your home also qualifies you for a number of local utility rebates.
The Average Lifespan of Solar Panels
Solar panels are generally built to last between 25 and 30 years. As the years go by, solar panels lose some of their efficiency. It happens very slowly, but towards the end of their lifespan, solar panels will produce less electricity than they did when you first got them.
Quality also plays a big role in determining the amount of time that you can expect your solar panels to last. Some brands even guarantee their solar panels to maintain a certain level of efficiency over a set number of years.
For example, while shopping for panels, you might see some that offer warranties like 80% / 15 years. This means that the solar panels are guaranteed to maintain 80% of their maximum output for 15 years.
Generally speaking, solar panels are extremely durable with an average longevity of nearly 3 decades. And because solar panel systems do not have a lot of moving parts, they require very little repair and routine maintenance.
Still, the most effective way to ensure the long-term reliability of your solar panels is to work with a solar company right off the bat. Reputable solar companies go the extra mile in ensuring that their solar panels, from manufacturing to installation, are able to withstand extreme weather, high winds, and heavy snow loads.
Good solar companies with stellar reputation will also have a proven track record of providing solid customer service, which is invaluable when investing in a solar power system.
Maintaining Your Solar System
Solar energy systems are generally easy to maintain.
Panels are built to be durable and require little-to-no maintenance. In most cases, even if you just let solar panels be, they will continue to function properly. Solar panels can withstand most types of weather without requiring you to complete any special maintenance tasks to do so.
The main aspect of maintaining a solar system is keeping it clean. You will just periodically need to remove any dirt, leaves, and debris that accumulates on your panels to make sure that there isn’t anything blocking the sun’s rays from getting to them.
You may also need to perform more extensive maintenance after harsh weather. For example, when it snows, you will likely want to clear away that snow from your panels with lukewarm water and a squeegee.
Many solar panels can be integrated into a monitoring system, typically an app, that will let you track how much energy they produce in real time and how much energy they generate over an extended period of time. This will allow you to determine how certain external factors such as dirt and debris impact the performance of your panels.
The monitoring system will also notify you about any malfunctioning or damaged panel, so you can have it repaired or replaced. You may just need to call a repair person out to take a look at your panels if they ever get damaged, malfunction, or start to lose their power-generation efficiency.
While solar panel cleaning and maintenance isn’t typically covered under panel warranties, repairs and replacement for damaged solar panels usually are.
Common Solar Panels Problems
Although solar systems are usually very easy to maintain, they aren’t perfect. The following problems have the potential to impact the efficiency of your system. If you encounter one of these, you will likely need to call out a technician to repair the problem:
- Internal corrosion
- Faulty wiring and other electrical issues
- Micro-cracks on panels, which reduce the effectiveness of your system
- Hot spots that degrade system efficiency when panels get too warm
- Inverter malfunctions (inverters need to be replaced every 10 - 15 years)
- Problems caused by wildlife such as birds
Other Important Things to Know About Solar
The information above covers just about all of the solar basics and solar 101 information that you need to know. But there are still a few loose ends to tie up, which we’ve done in this section.
Grid-Tied vs. Off-Grid Solar Systems
This is another item to consider as you think about the basics of solar energy. If your solar energy system is grid-tied that means that it is connected directly to your local electrical grid. If it’s an off-grid system then it isn’t connected to the grid at all.
Grid-tied systems allow you to pull electricity from the grid when you need it. They also enable you to take advantage of electricity billing incentives, such as net metering.
Off-grid systems give you complete energy independence but at the expense of some convenience. Under this model, your solar panels will need to generate all of the power that you consume. Most people with off-grid systems use solar batteries or power generators to back up their panels.
Your Location and Your Home Will Impact the Effectiveness of Your Panels
Solar panels are only able to generate power when the sun is shining on them. It makes sense, then, that people who live in states that receive lots of sun year-round will be able to get more out of their panels than people who live in states with normal seasons.
Additionally, the effectiveness of your solar panels can also be influenced by the amount of sun that your home gets. For example, you might live in a warmer climate but have obstructions like trees or large buildings nearby that limit the amount of sun that your roof gets during the day. This can decrease the effectiveness of your solar energy system.
Solar Panels and Harsh Weather
Many people who are just getting into solar energy worry about how their panels will fare when faced with harsh weather like excessive rain, snow, or hail. However, solar panels are built to be very durable. A quality system should have no problem making it through harsh bouts of weather.
Solar Energy Pros
Solar is a growing industry in the United States for a reason: there are more than enough advantages to convince homeowners to invest in it. This section will cover six of the most important benefits of solar power.
Reduce Your Electricity Bill
For many homeowners in the United States, it makes complete financial sense to invest in a solar system. That’s because solar panels can save you a significant sum on your monthly energy bill.
The exact amount that you save will depend on a number of factors, such as how much sun your roof gets, how much electricity you’re using now, and what type of panels you purchase.
But as long as your roof gets sun for at least part of the day, you will be able to lower your energy bill by purchasing solar panels.
Although solar systems can cost upwards of $20,000, most homeowners break even on them within 8 years of their purchase thanks to the savings they receive on their energy bills.
Once your solar payback period is over, you will get to continue benefiting from a reduced energy bill until your panels stop working. That means you could enjoy more than 20 years of significant energy savings after you’ve already broken even on your investment.
Increase Your Home Value
A solar power system is considered an upgrade to your home, much like a remodeled kitchen or a finished basement, so installing one will increase the overall value of your home. Solar homes tend to sell for more than non-solar houses.
Studies show that home-buyers tend to pay a premium when buying a solar powered home. A particular study by Lawrence Berkeley National Laboratory estimates that a solar power system increases the overall value of a home by an average of $15,000.
Another major benefit of solar is the ability it gives you to reduce your carbon footprint.
The continual dump of pollutants and excessive amounts of CO2 into the air from traditional non-renewable energy sources is putting the planet in danger. The continued reliance on fossil fuels makes it more and more difficult for the environment to keep the air clean.
Researchers have shown that a residential solar panel system can solve the entire energy needs of a home with about 80% lower carbon emissions than fossil fuels. That’s a massive reduction, empowering you to do your part to fight climate change.
Increase Your Energy Independence
Many people choose solar because they wish to live a more independent lifestyle. Solar panels enable this by giving people a way to satisfy their energy needs without having to remain connected to the utility grid.
Just keep in mind, in order to achieve true energy independence, you will likely need to supplement a residential energy system with a solar battery or two.
Create New Jobs
Investing in solar panels for your home is also a great way to contribute to the growth of the solar industry. As residential solar systems grow in popularity, more and more people will be able to find employment in this industry as well.
The American author Anna Lappe once said, “Every time you spend your money, you’re casting a vote for the kind of world you want.” And investing in solar is a vote cast for a cleaner, healthier world that is less reliant on fossil fuel.
Alternative Payment Options are Available
Another big benefit of solar is the fact that there are many different ways to start using it. You don’t necessarily have to pay the entire cost of a residential solar system upfront.
Instead, you can take out a loan, sign a lease, or engage in a power purchasing agreement (PPA) with a solar provider. There are even community solar options available that allow you to enjoy some of the benefits of solar without even needing to add panels to your roof.
Payment options like these expand the pool of people who can enjoy solar power. They make it financially feasible for almost anyone to get involved.
Solar Energy Cons
While there are many great reasons to invest in solar panels, there are also some disadvantages of solar energy that are important to consider. Here are four that are worth spending some time thinking about.
Lack of Consistency
One of the biggest problems with residential solar systems is their lack of consistency and reliability. Panels only generate power when they receive sunlight. That means the amount of solar energy that your system creates in any given year will be highly dependent on the weather that you get. This can create scenarios in which your system doesn’t save you as much money as you think.
One way to get around this is by signing up for a net-metering program or adding a solar battery to your system. Both will enable you to store and later enjoy the benefits of the excess solar energy that your system generates when the sun is out.
Not a Good Fit for Homes with Certain Characteristics
Residential solar systems are getting more and more efficient. However, they still aren’t a good fit for many types of homes. For example, you might have a large tree or building near your home that limits the amount of sun that your roof gets. If so, you may not save enough on your monthly energy bill to justify adding a solar system to your home. It is imperative that consumers answer the question, "is my house good for solar?"
Additionally, solar is still much more effective in parts of the United States that receive a lot of sun. People who live in Palm Springs and Phoenix will be able to get more out of their systems than homeowners in Chicago.
Chemical Content of Components
A potential disadvantage of solar is the chemical content of some components that make up residential systems. That being said, a vast majority of residential solar panels do not contain any of the chemicals that are listed below. If you are concerned, you may want to inquire with your installer or the solar panel manufacturer. Potential chemicals include:
- Cadmium telluride
- Copper indium selenide
- Cadmium gallium
- Copper indium gallium
- Silicon tetrachloride
- Polyvinyl fluoride
Solar panels lose some of their effectiveness as they age, but the company that manufactures your panels will sometimes guarantee a certain level of efficiency for a certain number of years.
For example, you might see an 80% / 10-year warranty offered by a solar panel manufacturer. This would mean that they’re guaranteeing your panels to maintain at least 80% of their maximum efficiency for 10 years.
Weighing the Pros and Cons of Solar Energy
Now that we know the major pros and cons of solar energy, it’s time to consider their relative strengths. Are the pros more impactful than the cons? Or vice versa?
Most people would agree that the pros of solar energy significantly outweigh the cons. It’s true that solar panels aren’t as reliable as we would like them to be. And it’s fair to point out that they aren’t a good fit for some homeowners and contain some toxic chemicals.
But even a relatively unreliable residential solar system will still likely be able to save you a ton of money on your electricity bills over its total lifespan. And swapping to solar will reduce your carbon footprint by more than enough to make up for the harsh chemicals present in solar panels.
At the end of the day, the disadvantages of solar energy are inconsequential when compared to its many advantages, particularly its financial and environmental advantages over conventional energy, which will continue to soar in price as it continues to rely on non-renewable fossil fuels at the cost of the planet.
Even if you have a home that isn’t a good fit for solar, you can still take advantage of some of the benefits of this form of power by signing up for a community solar program.
Often described as the face of solar technology, solar panels are the first thing most people picture out when thinking of a solar power system.
In a nutshell, solar panels are capable of generating electricity through a fundamental chemical process called “photovoltaic effect”, which happens when particles of sunlight knock electrons free from atoms, resulting in the transformation of solar radiation into electrical energy at the atomic level.
A typical solar power system usually consists of multiple solar panels, which is collectively called a solar array. Also referred to as a solar module, a solar panel captures sunlight and converts it into usable electricity, which is then combined with electricity generated by other solar panels in the solar array.
How Much Solar Power It Takes to Power a House
As you begin thinking about how much solar energy you need to power your home, there are a handful of factors you’ll want to consider, with the most significant ones being—sunlight availability or the amount of sunlight your home receives, your energy usage or how much energy you use, and solar panel wattage or the wattage of the solar panels you choose.
Let’s go through each of these factors in more detail.
The Amount of Sunlight Your Home Receives
Among the most crucial considerations in determining how much solar energy you would require is the solar irradiation levels available in your location; put simply, how sunny it is where you live.
Your solar panels are only able to produce energy when they receive sun. The more hours per day that your roof gets sun, the more energy that your panels can produce.
Just as important is your rooftop situation. It is ideal to have a roof without trees or other obstructions so that your panels are exposed to the maximum amount of sunlight available. If you have a roof that gets more sun than average, you will likely need fewer solar panels to run your home.
If your roof is shaded for a large portion of the day, you may need to add extra panels to your system. Alternatively, solar panels can be mounted away from your home, on concrete piers or solar panel pole mounts.
How Much Energy You Use
This factor is relatively straightforward. If you live in a home that uses more electricity than average, you will likely want to invest in more solar panels to satisfy that extra demand. Homes that use less energy than average can get away with adding fewer solar panels than normal to their systems.
To get a good idea about your current electricity usage, you can check your most recent electricity bill. In most bills, your electricity usage for any given billing cycle is indicated at the bottom in kilowatt-hours (kWh).
Ideally, you want your calculations to reflect a year’s worth of usage, as the monthly average tends to fluctuate in different seasons—just think of your air conditioner use in the summer.
If you want to arrive at a more accurate ballpark, then you might just need to dig up your monthly bills for the past year so you can solve for the annual average, which you can divide by 30 to get your daily average, which you can then again divide by 24 to get your hourly average.
The Quality of the Solar Panels You Choose
Some solar panels are more efficient at converting sunlight into usable energy than others. This can be measured by comparing the wattage or power rating of your different solar panel options.
The design of the solar panel greatly impacts its efficiency, which in turn determines how well each square foot can convert sunlight into usable energy.
The more efficient solar panels produce the more wattage. The more wattage that individual solar panels generate, the fewer panels it will take to meet your energy requirements.
Most panels fall somewhere in the range of 250-400 watts of power, with different levels of efficiency. If your panels lie on the higher end of this range or go beyond it, you may not need as many to satisfy your home’s energy needs. Here is our write up on the most efficient solar panels.
How Many Solar Panels It Takes to Power a House
The average home in the United States uses approximately 10,649 kWh of energy every year.
And the average solar panel produces between approximately 400 and 600 kWh of power each year.
That means the average home needs between 18 and 27 solar panels to eliminate its reliance on electricity pulled from the grid entirely.
Needless to say, these numbers are just general estimates. As discussed above, the exact number of panels that will be needed to power your own home will depend on a number of factors, such as where you live, how much energy you require, and how much power your panel of choice generates.
Of course, there are several variables and assumptions that we used to calculate this number. The best way to figure out the specific number of solar panels that you need to power your home will be covered later.
One idea that you might consider while shopping for solar panels is getting more than you need to satisfy your home’s energy needs. This is often referred to as “oversizing” your solar panel system.
Adding an extra panel or two to your system can be a smart decision. Doing so will give you some room to expand your energy consumption habits without needing to pull more electricity from the grid.
A perfectly good reason to get extra panels is if you’re anticipating having new additions to your home. If you’re planning on making expansions to your house, like a new garage or a finished basement, then you will likely be needing more panels to power the extra square footage added to your living space. This is also true if you’re anticipating more people to live in your home.
However, remember that each panel that you add to a solar energy system will increase its cost. That means adding an extra few panels can be smart but adding too many will be an unnecessary drain on your finances.
How Your Roof Area Determines How Many Solar Panels You Can Have
The total number of solar panels that you can add to your system will depend on how much square footage is available on your roof. The average residential roof in the United States is 1,700 square feet. We’ll use that number for our calculations in this section.
The average 330-watt solar panel takes up about 21.51 square feet of roof space when it’s installed. That means if you have an average size home and you covered your roof entirely in solar panels, you could expect to fit approximately 79 of them on it.
Of course, that calculation doesn’t take into account the large portions of unusable roof space that many homes have. Additionally, solar systems have to have space between them so that they can be cleaned and maintained when needed.
But we can use these numbers to get a sense of how much roof space you need for the system size that you’ve chosen.
For example, imagine that you want to install a 7.5 kW solar system on your roof. These typically contain about 23 solar panels in all. That means you need approximately 495 square feet of roof space to install all of these panels (without taking into account the space that’s needed in between the panels).
A “solar panel setback” is generally required of most roof-mounted solar power systems. A “solar panel setback'' is the gap between the edge of the solar array and the edge of your roof. It provides an accessible emergency pathway on your rooftop for firefighters and other responders in case of an emergency.
In order to accurately predict the number of solar panels that you need to power your home, you need to perform a calculation with real information about your energy consumption habits and your solar energy system. This section will show you how to do that.
Calculate Your Annual Electricity Usage
The first thing you need to do is figure out how many kWh of power your home uses in an average year. The easiest way to calculate this is by looking at each of your electricity bills over a 12-month period.
Your electricity bill will tell you how many kWh you’re being charged for each month. Simply add those numbers together and you’ll get the total kWh amount of power that you used in a year.
While performing this calculation, you may want to consider whether there were any anomalies in your energy consumption over the year. For example, you might have gone on a vacation for a few weeks that significantly cut your kWh consumption one month. You may want to add some kWh to your final tally if that’s the case.
Determine Your Solar Panel Wattage
Now you’re ready to figure out the wattage of the solar panels that you’re going to add to your home. This measures the electrical output of a solar panel in ideal conditions. You can find the wattage of your panels with a simple online search.
Figure Out Your Production Ratio
Finding your production ratio is a bit more complicated. This is a measurement that shows the estimated energy output of your solar energy system over time. It can vary based on your geographical location and some other factors involving how much sun your home gets throughout the year.
Generally, a homeowner can expect their solar energy system to have a production ratio of between 1.3 and 1.6. You can perform the calculation using both of these numbers to get a low and high estimation of how much power your system will produce.
Putting It All Together
Now we’re ready to put all of these figures together to figure out how many solar panels you need to run your home. Here’s the calculation:
The number of solar panels needed = system size / production ratio / panel wattage
The variable of system size refers to the number of kWh that your home uses in a year. For example, consider the following calculation:
10,649 kWh / 1.3 / 300 W = 27.3
In this scenario, the home in question would need just over 27 solar panels to satisfy its yearly energy needs.
The Average Number of Solar Panels by System Size
As you think about how many solar panels you need to power your home, it can also be helpful to review the average number of solar panels by system size. This chart provides that information:
|System Size (in kW) ||Number of Panels Needed ||Annual Energy Production Estimate |
|4 ||13 ||6,400 kWh |
|6 ||19 ||9,600 kWh |
|8 ||25 ||12,800 kWh |
|10 ||32 ||16,000 kWh |
|12 ||38 ||19,200 kWh |
|14 ||44 ||22,400 kWh |
The Different Types of Solar Panels
All four of the major types of solar panels perform the same job: they capture energy from the sun and use it to generate power. But each of the following types of solar panels offers a different combination of affordability, appearance, and efficiency.
Depending on your property, the particular installation you’re considering, and your preferred system characteristics, one type of solar panel may perform better than the others.
Monocrystalline solar panels are thought of as being the most premium option. They’re made by forming silicon into bars and then cutting those bars into wafers.
The name “monocrystalline” comes from the fact that single-crystal silicon is used in the construction of the panels instead of some other type.
Since monocrystalline panels are made from pure silicon, these panels are cosmetically identifiable by their dark black appearance. Its pure silicon composition also makes monocrystalline panels the most space-efficient and the longest-lasting option among the other solar panel types.
Polycrystalline or multicrystalline solar panels are a middling option: they’re not the most efficient or the most affordable but they offer a nice balance of the two characteristics. These panels are also made out of silicon.
The key difference is that manufacturers don’t use single crystals of silicon to make polycrystalline panels. They essentially add many different fragments of silicon together to form the panels. This is what makes polycrystalline panels more affordable, since the manufacturing process hardly wastes any silicon materials.
Polycrystalline panels are cosmetically identifiable by their characteristic square appearance and blue speckled look.
Thin-film panels are different from the previous two types of solar panels in a few key ways. First, they’re made out of a variety of materials instead of silicon alone. For example, the most common type of thin-film panel is made out of cadmium telluride, but amorphous silicon and copper indium gallium selenide are also both sometimes used to make these.
Thin-film panels are primarily characterized by their light weight, wide availability in sizes, and material flexibility, which makes them a very good option for many alternative applications, but not for residential installations (more on this later).
Thin-film panels are also generally cheaper, which makes it quite appealing to those shopping for a less expensive alternative to silicon panels.
Amorphous solar panels are technically a subset of thin-film panels. However, they merit their own section because of the unique way that they work. Amorphous panels stack on top of one another to provide higher efficiency levels than standard thin-film panels while also taking up less space.
Thin-film amorphous panels contain silicon in their composition, however, they are not created from traditional silicon wafers. Instead, amorphous panels are composed of non-crystalline silicon placed on top of a substrate like glass, plastic, or metal.
As for its appearance, if you’ve ever used a solar-powered pocket calculator at any point, then chances are you’ve seen this type of solar panel before.
Pros and Cons of Different Types of Solar Panels
Each type of solar panel discussed above has its own set of pros and cons. In this section, we’ll review the benefits and drawbacks of each type of solar panel covered in the previous section.
- Monocrystalline solar panels offer the highest levels of efficiency on the market thanks to their high level of silicon purity.
- Monocrystalline panels are also regarded as aesthetically pleasing because of its sleek design.
- Monocrystalline panels are the most widely used solar panels in residential roof-mounted solar installation right now.
- Monocrystalline panels are also usually the most expensive option on the market as well. The average cost of monocrystalline solar panels is between $300 and $700 per panel. It’s also worth mentioning that these panels generate the most waste when they’re produced.
- Polycrystalline solar panels are manufactured in more environmentally friendly ways than monocrystalline panels.
- Polycrystalline panels are cheaper than monocrystalline panels. For example, you will typically pay between $200 and $500 per panel.
- Polycrystalline panels, thanks to new technologies and more advanced manufacturing, have seen a dramatic boost in its efficiency and power ratings over the years, slowly closing its performance gap between its monocrystalline counterpart.
- Polycrystalline panes still aren’t as efficient as monocrystalline panels. Because polycrystalline panels, instead of being pure silicon, are essentially silicon fragments melted, treated, and molded together into a silicon composite, the electrons cannot move as easily and as a result, decrease the efficiency of the panel.
- Polycrystalline panels are also not as resistant to both light and heat and are known to struggle if they’re regularly in temperatures above 80 degrees Fahrenheit.
- Thin-film solar panels are the cheapest option on the market. You will typically pay between $175 and $300 per panel. However, that’s really where the benefits end with this option, at least in terms of its residential application.
- Thin film solar panels take up a lot of space, generally making them unsuitable for residential installations.
- Thin-film solar panels degrade faster and have a lower lifespan than other options, resulting in much shorter warranties than silicon solar panels.
- Amorphous solar panels are almost like an improved version of thin-film panels. They can provide as much as double the efficiency of thin-film panels and may take up less space.
- Amorphous panels costs a bit more than standard thin-film ones. You should expect to pay between $200 and $400 per panel for these.
- Amorphous panels aren’t as commercially available as most other types of solar panels. The technology isn’t yet primed for most common rooftop solar panel installations outside of off-grid structures with very low energy requirements.
The Best Type of Solar panel for Different Uses
As shown in the previous section, there are pros and cons to each type of solar panel that you may consider purchasing. No option is perfect and no option is wholly without merits.
That means the choice that’s best for you will depend on your solar goals. Here are the scenarios in which each type of solar panel makes sense.
Buy monocrystalline panels if:
- You value efficiency above all else
- You aren’t especially concerned with the environmental impact of the manufacturing process
- You don’t mind paying extra for the best
Buy polycrystalline panels if:
- You want a solid blend of affordability and efficiency
- You care a good deal about the environmental impact of the manufacturing process
- You live in an area where weather over 80 degrees Fahrenheit isn’t very common
Buy thin-film panels if:
- You’re looking for the most affordable option on the market
- You don’t mind having to repair or replace your panels a bit more often
Buy amorphous panels if:
- You like the affordability of thin-film panels but want a bit more efficiency
- You have a small house and need to make the most of its limited roof space
Innovation in solar panel types
Since the earliest days of the solar industry, panels have been made out of silicone. However, there’s a chance that this could change in the coming years.
While we’re still a little ways away from bringing the potential of these innovations to the residential and commercial solar panel markets, it's just worth keeping in mind that new research is still being done in this field and it’s almost certain that the solar panels of tomorrow will be more efficient and cost-effective than the solar panels of today.
Researchers see great promise in a group of materials called perovskites. They theorize that perovskites could be used to create solar panels that are twice as efficient as current models.
For example, current silicone panels can turn up to about 22% of the sunlight they receive into usable energy. Scientists have already shown that silicone panels coated in perovskites can achieve 28% efficiency. But they think that they will eventually be able to reach 40% efficiency or more.
Hairy Solar Cells
There’s also very promising research being done on hairy solar cells, which despite sounding funny, actually refers to nanotechnology that uses light-absorbing nanowires on carbon-nanotube fabric.
Solar nanowires are capable of absorbing more energy from the sun than silicon, which opens up the possibility of a more efficient material for harvesting sunlight. In theory, hairy solar panels can absorb up to 96% of sunlight that reach the panels.
Hairy solar panels are also made from extremely flexible materials that allows for roll-to-roll manufacturing processes, which makes production costs significantly lower compared to non-flexible solar panels.
High efficiency, flexibility, and affordability altogether make hairy solar a potentially revolutionary technology for residential installations, as well as commercial and industrial applications.
Infrared Spectrum Solar Panels
Traditional solar panels harvest solar energy only from the visible spectrum of sunlight. Visible sunlight is only 50% of the total solar energy that reaches the Earth's surface, while the other 50% is invisible infrared radiation.
Solar infrared rays normally pass right through the silicon-based solar panels that we use today, which leaves any potential infrared energy untapped and wasted.
Light from the infrared spectrum has always been notoriously difficult to harness and convert into usable solar power. However, given that half of solar ray emission comes from the infrared spectrum, scientists and researchers are looking at various ways that infrared light can be captured and converted into usable power.
In hopes of doing so, non-traditional solar system materials such as vanadium, titanium, and carbon, among many others, are actively being studied as potential additions to solar semiconductors.
Choosing a Solar Contractor
A lot of people tend to get anxious about choosing a solar contractor because solar technology is still relatively new to many. Fortunately, you’ve reached this section of Find Energy’s guide to solar energy, so you know more about solar than most people.
Even after reading through this solar guide, choosing a solar installer can still be a pretty daunting task. How do you know that you’re working with a reputable solar company with a proven track record, the necessary licenses and certifications, and the professional ability to deliver the solar power system that best meets your energy requirements? Where do you even begin?
First, let’s start by making sure that you understand the solar installation process.
Understanding the Solar Installation Process
As you prepare to hire a solar installer, it’s a good idea to familiarize yourself with what the installation process should look like. This will tell you what to expect so that you can quickly identify if some aspect of the installation process isn’t proceeding as it should be.
- The average solar install is a six-step process. This is what it entails:
- A solar contractor comes out to your home and performs an assessment of your current electrical setup and rooftop
- The contractor recommends a solar setup that fits your needs and you approve it or suggest an alternative
- You apply for and receive all of the permits and paperwork that you need to add solar panels to your home’s energy system
- You purchase the solar equipment that you’re going to use
- The solar panel contractor installs the solar system on your roof
- The city inspects and approves your solar panels, which are then connected to the utility grid
Working with Solar Panel Contractors vs Doing It Yourself
If you’re handy around the home, you might also be looking into installing a new solar system on your own. This can be a viable option and does present some benefits that are worth exploring.
One of the biggest reasons to choose a DIY installation is that doing so will save you money. You’ll just need to purchase the system that you’re going to use and then a DIY solar system installation kit, which you can get from a hardware store like Home Depot.
That being said, DIY solar installations have some pretty significant drawbacks as well.
For example, the setup process is very complex. It will take you some time to figure it out and you run the risk of making mistakes that could impact the efficacy of your solar system.
Additionally, DIY solar kits are typically only designed to provide off-grid solar energy. Utility companies typically won’t allow homeowners to access the grid themselves. That means DIY installations are really only a good fit for homeowners who want to move themselves off-the-grid completely anyways.
Finding a Solar Installer Near You
Solar panel contractors are becoming more and more prevalent as solar panels grow in popularity. That means you should be able to find at least a few different options to choose from no matter where you live.
It’s also a relatively straightforward process to find solar installers with our website. Just type in your city name and select the "solar" page and you will find a list of options to browse through.
The difficult aspect of hiring a solar installer isn’t necessarily finding one. Instead, the more challenging component is making sure that you hire an installer with the right qualifications to get the job done on time and on budget.
To do that, you’ll need to do some research. We recommend you evaluate each potential solar panel contractor that you’re considering based on the factors covered in the previous section.
Evaluating Solar Installers
45% of companies fail within the first five years. The ones that make it that long do so because they’re doing something right. That’s why it makes sense to hire solar installers that have years of experience in the industry.
That being said, solar installation is a relatively new field. You may not find a ton of companies in your area that have at least five years of experience, But you should still try and find an installer with at least a few years of experience.
Not every company with lots of experience will have the best reputation. That’s why it’s also important to evaluate what previous customers think about the solar installers that you’re looking into. If you see mostly positive reviews, that’s generally a good sign that you’ll be happy with the company as well.
Solar contractors with certain certifications tend to be more reliable than installers without those certifications. The main certifying organization for solar installers is the North American Board of Certified Energy Practitioners (NABCEP).
The NABCEP offers one of the most robust certification programs for solar PV installers in the United States. If an installer that you’re considering holds this certification, then that’s an excellent sign that they know what they’re doing and will complete your installation properly.
Many solar panel contractors will provide their customers with warranties for the work they do. These are sometimes called workmanship warranties and the specifics of what they cover and for how long can vary considerably from installer to installer.
A good workmanship warranty will cover any problems that stem from a mistake made during the installation process. The average length of a solid workmanship warranty is between 5 and 10 years.
As you look into your solar installer options, it’s important to consider what warranties they’re offering to guarantee the work they do. If there are lots of exclusions and the warranty only lasts a year or two, you may want to look elsewhere.
If you hire a company to install your solar panels, you typically expect them to do the entire job themselves. However, the use of sub-contractors is very standard in the solar industry. Even the best solar installers will sometimes sub-contract out certain parts of the job.
For the most part, this is totally fine and not disqualifying. However, sub-contracting can become a red flag if the solar installer in question is not forthcoming about it during the hiring process.
For example, a subcontractor might not disclose which parts of the project they’re subcontracting out. They might also not be able to give you a good answer as to why they’re using sub-contracting.
If you get this type of a lack of transparency from an installer you’re considering, you may want to look into alternatives.
Comparing Solar Contractor Quotations
Anytime that you plan on spending a lot of money, it is important to carefully consider your options before making a final decision about what you will buy. Otherwise, you have no way of knowing whether you’re getting the right product or the right price.
In fact, it is very rare to stumble upon the best value product blindly. Consumers typically need to perform lots of research before they can ultimately settle on the right fit.
Solar panels are no exception to this rule. For most people, they are a large investment, which means that it is important to carefully compare your options before buying. And the way that you do this is by comparing solar panel quotes from multiple providers.
Before you start comparing quotes from solar panel providers in your area, you need to know what you should be looking for. That way, you can ask companies that don’t provide you with all of the information that you need to make a decision to supplement their quotes if needed.
When you have all of the necessary information from multiple providers, it becomes much easier to determine which of your options offers the best blend of quality and affordability for your solar energy goals.
With that in mind, this section will go over the most important factors that you should be looking at while comparing solar system quotes.
Cost and Tax Incentives
Cost is typically the first thing that a consumer looks at when comparing solar system quotes. It’s a pretty self-explanatory metric. The less that you pay for your system, the quicker you will break even on your solar investment.
Just make sure that you are also considering the tax incentives that each system you look at will allow you to claim. There likely won’t be much variability from company to company in terms of the credits that are available to you if the systems that you are looking at are similar to one another. But it’s an important factor to keep in mind all the same.
System Size and Power
The size and power of your solar system will have a big impact on how quickly the investment pays for itself. The more power that your solar panels generate, the less electricity that you will need to pull from the grid to power your home.
That’s why this factor needs to be a part of your quote comparison process. It may show you that it’s smarter to pay a little extra for a more powerful system now so that you can save much more on your monthly electricity bills over the long run.
Warranties and Guarantees
Warranties and other guarantees can be one of the biggest points of differentiation for solar panel companies. There are two major types of warranties that you will want to compare while looking at quotes.
First, many solar panels come with a general warranty that will cover repair and maintenance costs when certain events occur. The average range for these is 8 - 15 years.
Second, many solar panel companies also offer power output guarantees. For example, some manufacturers will guarantee their panels to operate at something like 85% of their maximum capacity for a period of 10 - 15 years.
When it comes to warranties and guarantees, the more that you can get the better. In some cases, it may be worth paying a little extra for your panels to lock in long-term protection for them.
Project Scope and Schedule
Solar system quotes should also contain information about how long the project will take to complete and what the installation process will be like. This can sometimes play a big role in a consumer’s purchasing decision.
For example, one solar company may be able to begin installing your panels immediately. While another could ask you to wait for six months or even longer to add panels to your roof.
Payment terms are another important factor to consider while comparing solar quotes. Some companies will want you to pay for everything upfront before the installation process even begins. Others will allow you to pay off percentages of the amount that you owe as certain stages of the installation are completed. You might even get multiple payment term options to choose from with some solar companies.
You won’t find this information on the quotes that you receive. But it’s important to consider while shopping for solar systems all the same. Generally, it’s best to purchase your solar panels from companies with strong reputations for doing great work.
That being said, you may have to pay a premium to do this. Companies with the best reputations may also require you to wait longer before they can begin installing your system.
Whether you believe that waiting or paying extra is worth it or not, you should still take a company’s reputation into account before accepting or declining its quote.
What Happens During a Visit From a Solar Contractor
Before we get into specific questions to ask solar companies, let’s start by looking at what information you should expect to receive while getting a quote.
A complete solar panel quote should include each of the following pieces of information:
- The solar panel model and the specific number of panels to be installed
- The amount of power your solar system will generate
- The inverter model that you will use
- The expected power production per year that you will get from the system
- The amount that you can save in dollars each year
- Information about any solar incentives that you can qualify for
- The total cost of the system
- Loan information (if you’re not paying the full price of the system immediately)
- Warranty information
The first thing to do while getting a quote on a solar system is to make sure that you receive all of this information. If you’re missing something on this list, that’s the first thing you should ask for.
To provide you with all of this information, the installer will likely need to spend some time on your roof. They will also likely need to ask you a few questions about your current energy consumption habits so they can figure out which solar system will best suit your needs.
The typical process for getting a quote from a solar panel installer will generally look something like this:
- The solar panel installer will often begin by looking at your roof to figure out which types of solar panel installations are possible with your setup.
- The installer will ask you some questions about your energy consumption habits and other topics that are relevant to finding the right solar panels for you.
- The person delivering the quote will give you their recommendation for the type of solar panels that best suit your needs along with information about costs, warranties, power generation capabilities, and more.
- You will get the opportunity to ask any questions that you have for the installer.
- You will either come to an agreement with the installer then and there or take some time to consider the quote and compare it to your other options.
Asking Solar Contractors Key Questions About Their Company
You will likely have several different solar companies to choose from if you decide to buy a solar system for your home. Asking these questions to each of those companies will help you decide which one is the right fit for your project:
- How many projects have you worked on that are similar to this one?
- Can you provide me with references of satisfied customers?
- Do you have the necessary licenses to install solar panels in this state?
- How long has your company been in business?
- If you are going to subcontract some of the work on this project, how do you ensure the subcontractors do quality work?
- What type of warranty do you offer? What specifically does it cover? And what would void it?
Asking Solar Contractors Important Questions About Solar Panels
Homeowners today have a massive number of different solar panel options to choose from. That can make it difficult to ensure you find the product that’s best for your needs. Asking these questions to the company that’s going to install your solar panels can help you resolve that problem:
- Why do you offer these panels and not another option?
- What panels are you using on your home or business?
- How difficult will it be to upgrade this system in the future?
- What will the maintenance process for these panels look like?
- How challenging (and costly) will it be to repair the panels?
- Do I need to protect these panels from animals or the weather?
- Would it be difficult or costly to add a solar battery to the system?
Asking Solar Contractors Important Financial Questions
For most homeowners, finances are the biggest point of concern as they decide whether upgrading to solar is right for them. That is why it is important to ask solar companies pointed questions about the financial aspect of the transaction before you sign any contracts.
Here are some of the best questions to ask a solar company about money:
- What government incentives will I qualify for with this solar system?
- How can I be sure that I qualify for the tax credits and rebates you’re suggesting?
- How will I pay you? All at once? Or spread out over the course of months?
- How long will it take for me to break even on my investment in this solar system?
- Will my home be worth more after installing these solar panels?
- Do I have multiple payment options? If so, what types of financing do you offer?
Asking Solar Contractors Questions About a PPA agreement
A solar power purchase agreement (PPA) is a financial document that you might be asked to sign if you plan on using financing to pay for your solar system. PPAs can be very helpful, as they allow homeowners to add solar panels to their home without having to pay the total cost of doing so upfront.
That being said, PPAs can also be very complicated. They outline the complete details of the lengthy financial agreement that you’re going to enter into with the solar company.
This is why you make sure that you ask the right questions before signing a PPA. Here are some questions to consider:
- Which financial institution is providing the capital for the PPA?
- What will happen to the PPA agreement if the solar system breaks before the agreement ends?
- Do you offer any guarantees that would protect me financially if my solar panels stop working earlier than expected?
- What happens to the solar system at the end of our PPA?
- What inflation rate are you using? How will it impact my payments to you as the years of our agreement go by?
Understanding Your Solar Panel Financing Options
As you compare solar system quotes, it is important to make a decision about how you plan on paying for your system. That’s because the payment method that you use could end up influencing which quote is your best option.
So to help with that, this section will cover some of the ways that you can pay for solar panels and how that might influence your purchasing decision.
By most measurements, cash is the best way to purchase a solar system. It does require you to spend a lot of money upfront. But it saves you from having to pay any interest and allows you to own your solar panels outright immediately.
If you plan on buying your solar system with cash, you may want to ask the companies that you’re considering whether they offer a discount for this. It never hurts to ask and doing so could save you money.
Solar Loans vs. Solar Leases
If you need to finance your solar panels, then you have two options: taking out a solar loan or signing up for a solar lease. Loans allow you to pay off your solar panels over time and own them once you do. This is worse than paying cash because you will have to pay interest. But you still get to own your solar panels at the end of the day.
Solar leases are different. When you sign one of these contracts, you’re essentially agreeing to have solar panels installed on your home and to purchase the power that they generate from the company that installs them.
You won’t actually own the panels once your lease is over, although many companies will give you the option of purchasing them if you’d like to do so.
Ultimately, solar loans are typically a better option than leases because once you pay them off, you get to enjoy the benefit of having a lower electricity bill without having to make any additional payments.
With a solar lease, once you stop paying, you stop getting to enjoy the benefits of solar energy. You may still be able to save money on your energy expenses with a solar lease. But you likely won’t be able to save as much as you would if you purchased the panels.
Using a Solar Costs Calculator
Using a solar calculator can provide you with several key pieces of information that will be important to have as you consider your solar options.
First, a solar panels cost calculator can tell you what size residential solar system you need. It gives you this information by considering how much power your home uses and how much sun it gets in a day.
Additionally, a solar calculator can tell you how much you should expect to pay for a residential solar system. It does this by figuring out what size solar system you need and then looking at average price data for systems of this size.
Solar Costs Calculator: Figuring Out Your Information
Without further adieu, here’s our solar panel cost calculator. If you need help coming up with the data that the calculator requests, we’ve got you covered in the next section.
Calculating the Total Kilowatts Your Consume
This is one thing you need to figure out before you’ll be able to fully benefit from a solar costs calculator. It’s possible to calculate this figure by going through your house, looking at the wattage of all of the appliances that you use, and figuring out how long you use each appliance for each day.
However, this is unnecessarily time-consuming. If you get a utility bill, it will almost always tell you the number of kilowatt-hours (kWh) that you’re being charged for that month. You can multiply that monthly figure by 12 to get your home’s annual electricity consumption.
Determining How Much Sun You Receiver Per Day
The amount of sun that you receive per day plays a big role in determining how much energy each of your solar panels will be able to generate. Homes that receive more sun need fewer panels to achieve the same amount of energy generation.
However, when it comes to solar, we don’t care about the total number of hours that the sun is out for the day. What really matters is the number of peak-sun hours that you get (times at which an hour of sunlight is capable of providing at least 1,000 watts of energy per square meter).
Most homes in the United States get between 3.5 and 6 hours of peak sunlight per day.
You can then adjust your state’s average peak sunlight higher or lower depending on whether you think your home gets more, less, or the same amount of sun as the average home in your state.
Solar Costs Calculator: Determining Your System Expenses
The first step to calculating the cost of your residential solar system is using the calculator above. It will tell you which size system you need. Once you have that information, figuring out exactly how much you’re going to have to pay for a residential solar system is a simple process.
Understand Your Tax Credits and Rebates
You often won’t have to pay the full amount of whatever solar panel prices you find online. That’s because nearly everyone who adds solar panels to their home qualifies for at least one tax credit or rebate, which brings the net price of the system down -- often considerably.
For example, you will almost definitely qualify for the federal tax credit (ITC). This currently reduces the price of a solar system by 26% for systems installed in 2022 and 22% for systems installed in 2023. However, sometimes solar manufacturers offer quotes that already take this discount into account. So just make sure you’re paying attention to that while you research prices.
You may also qualify for tax credits and rebates from your state or local government. These vary from region to region so you’ll want to do your research on your website to find out what you might qualify for.
Once you’ve figured out all of the tax credits and rebates that you’ll qualify for, you can subtract them from the sticker price of a residential solar system to get an estimated figure for how much you’ll end up actually paying for it once everything is taken into account.
Add Installation Charges and Component Costs
Depending on where you’re shopping, the online price that you see for solar panels may or may not be inclusive of everything that you need to get up and running with it.
For example, if you’re shopping on a solar panel manufacturer’s website, the price they provide may not take into account the cost of installing the panels. If so, you would need to get in touch with a solar installation company to figure out how much that process would add to your price.
Additionally, the price of your solar panels may not take into account components like mounting and solar batteries. Mounting is essential so you’ll have to make room in your budget for it to ensure that your solar system stays securely in place throughout its lifespan.
Solar batteries aren’t essential so you can decide whether you want to pay for one upfront or not. Just keep in mind, installation charges are usually lower if you install your solar panels and a solar battery at the same time.
Making Your Solar Decision
Residential solar power is becoming more and more accessible to different types of consumers thanks to the many innovations occurring in the industry. Adding solar panels to your home is a smart investment for homeowners who live in areas that receive a decent amount of sun throughout the year.
But even if you can’t or don’t want to add solar panels to your home, you can still enjoy the cost-saving and carbon footprint reduction benefits of solar energy by joining a community solar program.
When it comes time to make your solar panel selection, take advantage of the many resources that we’ve created to help you make the best decision for your unique needs.
Solar Power System FAQs
How does solar impact property values?
Adding solar panels to your home will generally increase the value of it as long as you own the panels outright. That’s because if someone buys a home with solar panels already installed, they get to enjoy a reduction on their monthly electricity bill without having to install panels themselves.
Why should I go solar?
Why go solar? People install solar panels for a few reasons. First, they are often a smart investment that pays for itself over time. Second, solar panels help to reduce our reliance on fuel-generated electricity, which protects the environment. Finally, solar panels also enable people to enjoy more energy independence.
Do solar panels produce power when the sun isn’t out?
Solar panels will still produce some energy when it’s cloudy. But they don’t produce any at night. That being said, if you install a battery with your system, you will be able to use excess energy from your panels during the night.
Will I still have an electric bill if I switch to solar?
Yes, you will likely still have a small electric bill even after switching to solar. But this could be very small and you may not even get a bill some months depending on how much power your system generates.
How much should I budget for solar panel maintenance?
You really don’t need to budget anything for solar panel maintenance. They are extremely durable and only need special attention in rare situations where something has gone wrong.
Is it better to buy or lease a solar energy system?
You will likely get the best financial return if you purchase a solar energy system. But leases are a great alternative for people who want to enjoy the benefits of solar energy without having to pay or care for an entire system..
Is my home suitable for solar panels?
Generally, if your home receives sunlight during the day, then solar panels can work for you. That being said, the more sunlight you receive, the more power you can generate. Homes that receive very little sun will see smaller cost-saving benefits from their system.
What happens to my solar panels if I sell my house?
If you own your solar panels outright, they will typically be transferred to the new owner when the sale completes. If you lease your panels, you have the option of transferring the lease to the new owner if they would like to do that.