One of the biggest questions surrounding solar is, “how much do solar panels cost?” You’ve probably been told that solar energy can save you money on your electric bills, but how much does solar cost? The most common way to calculate the average cost of solar panels is on a “dollars per watt” basis. However, it is more useful to look at the cost of a system of solar panels. We will first explain how much a solar panel costs in terms of cost per watt, and then look at the cost of a system of solar panels.
How much does a solar panel cost?
The cost of a solar panel is usually reported in terms of cost per watt. A “watt” (W) is a unit of power, or amount of energy produced per time. In the case of solar panels, the rated wattage is the maximum amount of power, or energy per time, that the panel can produce. Solar panels come with different rated wattages, ranging from 100 W (low efficiency) to upwards of 365 W (high efficiency).
U.S homeowners paid $3 to $4 per watt to install a solar panel system in 2016, with an average cost per watt of $3.57 per watt. However, after the 30% Federal Investment Tax Credit (ITC), that cost per watt drops to about $2.50 per watt. If we take 275 W as a “normal” efficiency panel, we can calculate the average cost for an installed solar panel to be about $700 after the 30% Federal ITC.
How much does a solar system cost?
So what does the average cost of one installed solar panel mean for a homeowner? Well, not much. However, if we look at the average size of a whole system, we can get a sense of how much a system of solar panels costs. The national average residential system size is 5,000 watts (or 5 kW). This means that the average system has about 18 panels and costs about $12,500 (after the Federal ITC). That is 12% lower than it was in 2015, and solar panel system costs will continue to fall. However, federal and local incentives are set to expire in the coming years, making 2017 the perfect time to buy solar.
It’s important to point out that the cost per watt of a solar system is not the same for everyone. The average cost per watt can vary due to location, system size, whether it is a roof mount or ground mount, roof configuration, roof type, and equipment. The average cost per watt is not the same for every installer, so it is important to compare multiple installers in your area.
How much would a solar system cost for my home?
The number of panels you need for your home depends on two factors: how much energy a panel can produce and how much electricity your house uses per month. Generally, we talk about electricity in terms of kilowatt hours (kWh). Your electric should show you the amount of kWh of electricity you use each month.
First, let’s talk about the amount of electricity that a solar panel produces. As you would expect, the amount of energy your solar panels produce depend on how much sunlight they get. This is determined by how many sun hours (or hours of sunlight in your region), the direction of your roof (south-facing roofs are the best!), and the amount of shading on your roof from trees or other obstructions. No two houses have exactly the same solar potential so it’s important to talk to a solar professional to get an accurate estimation of your energy production. For example, we would expect our 5 kW example system from above to produce around 300 kilowatt hours (kWh) in a sunny part of the country on a south-facing roof with no obstructions, but would only expect it to produce 200 kWh in a region without much sun.
Second, we need to look at how much electricity your home uses. A typical household in the US consumes about 600 kWh per month but this can vary dramatically. If you own a pool, use a Jacuzzi tub, have larger appliances, use consumer electronics for extended periods of time, etc., your usage could be significantly more than average. Your electric usage will also vary based on the season if you use an AC unit or have central heat. You can find your electricity consumption on your latest electric bill.
It’s important to keep in mind the additional benefits associated with solar panel systems. Not only can you eliminate your electric bill, but you can also protect yourself from electric utility rate increases.
As you can see, determining the cost of your system of solar panels is not an easy question to answer. That is why we have created a solar savings report that uses estimates your electricity consumption, qualifies your roof, and estimates your potential solar savings. Visit our solar calculator to get your custom solar savings report.