You can pay for solar panels in various ways, such as:
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&#; Cash
&#; Financing
&#; Lease
&#; Power Purchase Agreement (PPA)
Cash and financing are the only options that let you claim the 30% Residential Clean Energy Credit. Leasing and PPAs may be less money down but you will have a minimal return on investment.
When shopping for solar panels, you may be surprised at the cost. Why are solar panels so expensive?
Solar panels cost a lot of money because of the price of raw materials like silicon and lithium. Solar panels also require advanced manufacturing and may have complicated installations.
However, the high upfront cost of solar panels is offset by long-term savings. Many homeowners break even with solar panels after just ten years, for example, because of energy savings.
Keep reading to find out everything you need to know about why solar panels are so expensive.
The average home solar panel system costs between $13,000 and $20,000. The larger your home, the more you&#;ll pay for solar panels.
Those prices may seem expensive. However, solar panels are significantly cheaper today than ever before in human history.
In fact, according to the Solar Energy Industries Association (SEIA), the average cost of a residential solar system was $40,000 in . Today, it&#;s just $18,000 &#; and prices continue to drop.
Paying $13,000 to $19,000 for an average solar panel system may seem expensive. So why do solar panels cost so much? What are the factors impacting the price of solar panels?
Some of the most important factors impacting the price of solar panels include:
Solar panels are made from expensive raw materials. The most important raw materials in solar panels include:
Some solar panels also use silver or silver-coated silicon wafers. Silver can make solar panels more efficient, but it can also increase manufacturing costs.
Most solar panel arrays also use steel. Steel arrays keep your solar panels stable and secure. Others use aluminum for similar reasons. Whether using steel or aluminum, these materials increase the cost of your solar panel system.
Some homeowners buy cheap solar panels to save money today. Others buy higher-end solar panels, spending more money today for greater efficiency. Depending on the type of solar panel, you could spend anywhere from $0.70 to $1.50 per watt or more.
The three main types of solar panels are:
Polycrystalline ($0.70 to $1 Per Watt): A polycrystalline solar cell consists of multiple silicon crystals fused together. They&#;re the cheapest solar panels, on average, and they effectively convert sunlight into electricity. If you see a solar panel with a blueish hue, then it may be a polycrystalline solar panel.
Monocrystalline ($1 to $1.50 Per Watt): Monocrystalline solar cells are made from a single large block of silicon. They&#;re more expensive in terms of both raw materials and manufacturing. However, they&#;re more efficient than polycrystalline panels.
Amorphous ($1 to $1.50 Per Watt): Some solar panels use amorphous silicon cells, which have non-crystalline amorphous silicon cells attached to a substrate &#; like metal, plastic, or glass. While ordinary solar panels are rigid, amorphous silicon cell solar panels are flexible.
To install solar panels on your home, you need certain equipment. Whether you buy this equipment through a solar panel company or on your own, it increases the cost of your solar panel system.
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Consider the cost of solar panel mounts. These mounts cost $10 to $5,000, depending on your mounting option. Mounting options vary in price and include:
Fixed Mounts ($10 to $30 Each): The cheapest solar panel mounts are fixed mounts. These mounts are ideal for locations with continuous exposure to sunlight. Your solar panels remain in a fixed position all year long, giving your home a constant supply of electricity at a reduced price.
Adjustable Mounts ($50 to $100 Each): Some homes have adjustable mounts, which allow you to change the angle and direction of solar panels based on time of year. These mounts are more expensive.
Tracking Mounts ($500 to $5,000): The most advanced solar panel systems have tracking solar panel mounts. These mounts track the sun as it moves across the sky, keeping your solar panels operating at maximum efficiency all day long. You spend more for tracking mounts upfront, but many find the efficiency boost is worth it.
You&#;ll also need to buy an inverter to change DC to AC, allowing your home to use the electricity your panels produce. The average solar panel inverter costs $1,000 to $1,500, although homes with larger systems may require costlier inverters.
The solar panel installation industry has surged in the last decade. Today, it&#;s easier than ever to find a solar panel installer in your area. That makes solar panel installation costs competitive.
Solar panel installation labor costs and other expenses include:
Installation Labor Costs ($1,000 to $3,000): The average solar panel installation takes a team of three workers around 1-2 full days. Expect to pay for 8 to 12 hours of labor for three people. Depending on the cost of labor in your area, you could spend anywhere from $1,000 to $3,000 for labor.
Electrical Labor Costs ($100 to $500): You may need to hire an electrician to install the sub-panel. Sometimes, the solar panel installation company has a licensed electrician for this work. In other cases, you hire the electrician yourself.
Permits & Inspections: Depending on your municipality or state laws, you may need to pay for inspections and permits. Expect to spend about 1% to 3% of your project&#;s overall budget on permitting and inspection.
Ongoing Maintenance: Solar panels require little maintenance. Some homeowners pay $100 to $200 for an annual solar panel inspection, while others hire professional solar panel cleaners. However, you can save money by cleaning solar panels yourself.
Solar panels may seem expensive. However, there are proven ways to save money on solar panels. Follow the tips below to reduce the cost of your solar panel system:
Request Multiple Quotes: As with any home project, it&#;s important to request multiple quotes for solar panels. Some experts recommend getting three quotes, for example. You ignore the highest and lowest quotes and choose the middle one. Others want the cheapest or most expensive option. By requesting multiple quotes, you get a better idea of fair solar panel costs in your area.
DIY Installation: Some homeowners install solar panels themselves. DIY solar panel installation can be tricky, and it&#;s beyond the skill of the average homeowner. However, you could save money by doing part or all of the project yourself.
Buy High-Quality Solar Panels with a Good Warranty: Many homeowners buy cheap solar panels to save money, only to have those solar panels break after a few years. Generally, it&#;s better to spend more on solar panels today to save money in the future. Look for solar panels with a strong warranty, as this warranty protects your investment. The average solar panel has a 12 to 25-year warranty.
Take Advantage of Tax Credits & Incentives: Depending on your city, county, or state, you could have access to certain tax credits, incentives, or rebates. Check for local solar panel promotions to reduce the overall cost of your solar panels. Federal tax credits, meanwhile, could allow you to recoup up to 30% of your solar panel installation cost.
Solar panels have a high upfront cost because of materials like lithium, steel, aluminum, and silicon.
Over time, however, solar panels tend to pay for themselves. In fact, the average payback period for solar panels is around 5 to 10 years. You can recoup your initial investment within a few years, then earn pure profit for the rest of your solar panel lifespan.
Compare solar panel quotes in your area today to find the best solar panels for your unique needs and budget.
This article has been published in accordance with Socialnomics&#; disclosure policy.
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