With the 26% federal tax credit reducing at the end of 2022, millions of American homeowners are asking themselves whether or not installing solar panels is worth it.
The answer depends on many factors including where you live, how much roof space you have, if your roof is shaded, how much power you use, what your local utility charges you for electricity, and the prices offered by local solar companies.
Our solar panels cost and savings calculator takes all of these factors into account when calculating the payback period and investment return for your specific home.
You can either dive straight into our calculator and get an accurate estimate of how much a solar installation can save you, or you can read on to get a closer look at how to determine if solar is worth it for your home.
1. What is the average payback period for residential solar panels in 2021?
The solar payback period refers to the amount of time it takes for the electric bill savings from your solar panels to equal the amount you paid for the system. The average payback period for a residential solar system in 2021 is about seven years.
A payback period of seven years equates to a return on investment of approximately 14%. However, this varies greatly by state and even by regions within states.
Calculate the solar panel payback period for your home based on your location, electric use and current local solar system prices
Once you have generated an accurate payback period, you can compare this to the returns you see on other types of investments:
- Long-term government bonds currently have returns between 0.1% and 2%
- Zillow estimates that home prices increase between 3% and 5% annually
- The stock market has risen around 9.5% historically
As you can see, residential solar panels stack up favorably against all of these other investment options - and this is even before we consider the increase in a home’s value caused by the solar panel installation.
2. How much do residential solar panels cost for an average 2000 square foot home?
Solar panel cost is often measured as the “cost per watt” of solar. This makes it easy to compare the relative value of solar systems of different sizes in terms of the watts of power they can produce.
Our data shows that the average cost of a residential solar system in 2021 is $2.85 per watt, before the federal tax credit. At that price, a typical 7 kilowatt (kW) home solar system would cost $19,950. The cost would fall to $14,763 after claiming the 26% solar tax credit.
The cost of residential solar panels has dropped dramatically over time. In fact, it has fallen over 70% in the past decade.
In 2019 alone, the cost of solar dropped by 5%.
3. How much will solar panels cost for your specific home?
To calculate solar panel cost for your home, it is first necessary to calculate how many solar panels are needed to power your home. The number of solar panels you need depends on how much electricity your home uses.
Our calculator can easily determine how many solar panels you need just by using the cost of your most recent electric bill.
See how many solar panels you need to power your home and how much they will cost based on current offers in your area
4. How long do solar panels last?
Most standard solar panel warranties ensure that your solar panels will last at least 25 years. As solar panels age, their power output decreases. It’s normal for a warranty to guarantee that they will produce over 80% power output at the end of 25 years.
However, this is just a minimum lifetime. It’s possible for solar panels to last well over 30 years. In fact, premium panels, like SunPower's, will guarantee at least 92% power output in Year 25.
5. What maintenance is required for solar panels?
There is very little maintenance required for solar panels. It is recommended that you clean your solar panels once or twice a year to avoid dirt and buildup. However, this might not be necessary if your area gets regular rainfall or if your roof is steep, which allows debris to easily fall off.
It is worth checking to see that all junction boxes are sealed and watertight once every five years.
Because there is almost no maintenance required, you don’t need to worry about additional maintenance costs.
6. Is my roof suitable for installing solar panels?
There are a number of factors that determine how suitable your roof is for solar panels, including:
- The size of your roof
- The direction your roof faces
- The pitch of your roof
- How much of your roof is shaded
When trying to determine if solar panels are worth it for you, consider the size, direction, pitch, and the amount of shading your roof has. Large, unshaded, southern-facing roofs are the most ideal for solar production.
7. Does my roof have to face due south for solar panels to produce enough electricity?
While solar panels facing due south do produce the most overall electricity, it’s perfectly fine to have panels facing southwest and southeast.
As solar prices continue to fall, panels are being put on west-facing roof spaces even though they produce about 15% less electricity.
This is especially common for those with time-of-use electricity billing, who wish to move their solar generation to later in the afternoon (when their power company charges peak rates) in order to save money on their electricity bills.
8. Can you buy and install your own solar panels to save money?
It is possible to buy solar panel kits and then organize the installation, permitting, and inspections yourself. Doing this could save you between $2,000 and $3,000 - potentially more.
However, there are some potential pitfalls to install solar yourself. The installation of solar panels is dangerous, as it requires you to do electrical work at great heights. It’s also possible that you could damage the equipment, and it can be very difficult to claim a solar warranty when you install on your own. DIY solar projects typically suit those who are contractors, or those who know a qualified solar electrician to help them out.
If you order a DIY solar kit, you can contact a local solar contractor to assist you if you are not comfortable performing the installation on your own. In some cases, however, installers will charge you more for the installation of a DIY solar kit, making it cost the same amount it would have if you hired an installation company to do all of the work. If this is the case, it might not be worth it to install solar on your home with a DIY kit.
Therefore, if you are considering DIY solar panels, we suggest that you get at least one quote from a full-service solar company that will supply the equipment, perform the installation, and handle permitting.
If you think a DIY solar project is right for you, you can use our solar calculator to find out how many solar panels are right for your home. Then, check out our price comparison of popular DIY solar installation kits of that size. We have prices on hundreds of kits from around 20 different online stores.
9. Which solar panels are best for home?
There are many ways to rank the best solar panels, including by value, efficiency, and performance. These brands tend to have the best overall solar panels:
- Canadian Solar
- Trina Solar
You can read our expert summary and justifications for the ranking of top solar panel manufacturers in 2021 on our best solar panel brands expert reviews page.
10. How many solar panels are needed to power a house?
The number of solar panels you will need to power your house will depend on two factors:
- The amount of electricity you use
- Your location, as where you live determines how much electricity your solar panels can produce
Our online solar calculator can take your monthly power bill and location to work out how many solar panels you need, as well as the cost based on the prices of solar companies near you.
See how many solar panels you need for your home
11. Do I need to buy a solar battery if I install solar energy panels on my house?
In short, no.
In most areas, it is not necessary to buy a solar battery when you install solar panels on your roof. This is because most utilities offer some form of net metering, which effectively allows homeowners to sell the excess energy their solar panels produce to the power company, instead of physically storing it in a battery.
Even though battery storage is getting cheaper, it still has a relatively long payback period. For example, the Tesla Powerwall only costs around $12,000, including installation, but it will still take almost 10 years for it to pay for itself.
Another important factor when deciding are solar panels worth it is how high your electricity rates are and whether or not your utility offers retail net metering. Places with high electric rates and full retail net metering are often some of the best places to install solar.
With that said, it may be worth considering installing solar with a battery system if you live in an area that does not offer net metering.
12. Who are the best solar panel installation companies near me?
As the largest consumer reviews site for the residential solar industry, we have reviews of most solar panel installation companies.
We also have rankings for solar energy companies by state and city so that you can refine your search for the best local solar company to only those companies that service your local area.
Compare the prices of the best-rated solar providers near you online
13. Do solar panels increase the value of your home?
A 2015 study showed that a typical solar panel system added a $15,000 premium to the selling price of a home. They did this by studying comparative sales of similar houses with and without solar panels.
Separately, Zillow released a study in 2019 which concluded that solar panels, on average, added 4.1% to the value of a home, effectively making installing solar panels a worthwhile investment, even if you plan on selling your home in the future.
So, are solar panels worth it for your home?
As you can see, there are many factors that go into determining if solar panels are worth it for your home. The return on a solar investment depends on where you live, your roof’s features, your electric rates, and who installs your panels.
The easiest way to answer the question “are solar panels worth it?” is to use our solar calculator to get an accurate cost and savings estimate tailored to your home and energy usage.
Then you can be on your way to powering your home with clean energy - all while cutting your electric bill.
Find out how much will a solar system cost you after federal, state, and local incentives in 2021
- Standard home solar does not “work” at night.
- Home solar panels are not attractive.
- DIY solar installation is difficult (if not impossible) for most homeowners.
- Not every roof configuration is ideal for maximum solar power generation.
- Solar manufacturing is not good for the environment.
Disadvantages of solar energy include a high initial cost, an inability to work on every roof type, and it may be difficult to find a local installer depending on where you live.Are solar panels still worthwhile? ›
As well as saving you money on your energy bills, solar panels can also earn you cash. And don't worry, panels can still generate some electricity on gloomy days, vital when the weather's as dull as watching paint dry.Why don't they put solar panels on new houses? ›
This is because solar panels don't have the capacity to store energy for use later in the day. This doesn't mean it's not possible at all, but to store energy you'll also require the addition of a battery bank, making the installation more complex and expensive.What is the biggest problem with solar panels? ›
Intermittency. One of the biggest problems that solar energy technology poses is that energy is only generated while the sun is shining. That means nighttime and overcast days can interrupt the supply.Does solar panels affect your house insurance? ›
You may not see an increase in your homeowners insurance premium after installing solar panels on your roof. However, you'll likely need to raise your coverage limits to account for the replacement cost of your solar panels, which will likely result in some increase to your premium.Do solar panels cause roof leaks? ›
In virtually all cases, the answer is no. Roof leaks after solar panels are extremely rare. When roof leaking after the solar panels are fitted does occur, however, it usually becomes evident very quickly after the installation process is finished.Do solar panels damage your roof? ›
For most homeowners, as long as your solar panels are properly installed, they shouldn't do damage to the exterior or the infrastructure of your roof. If you are working with a qualified licensed professional and your roof is in good condition, your solar panels won't affect the integrity of your roof.Why are people not buying solar panels? ›
High upfront costs for your solar energy system. This is usually because solar equipment and/or installation costs are expensive where you live. Space restrictions mean that you can't install a solar panel system large enough to deliver adequate electric bill savings.Is solar still worth it 2022? ›
Under the right conditions, solar is worth it for the average American homeowner in 2022. However, it's not a one-size-fits all type of energy solution. Consider the following to assess if you're a good candidate for solar: Access to sunlight: Does your roof have access to direct sunlight?
Your Home Is Using Too Much Power
If your solar panels are not reducing your bill, it can be because: Your system is generating less electricity than you use. You're using too much electricity at night when panels aren't generating it. Too many appliances or devices are plugged in.
Disadvantages of selling a house with solar panels
Buyers may have concerns about whether the solar panels have affected the integrity of the roof structure. They may also question how to action any necessary repairs to a roof that is embellished with solar panels.
- Delamination and internal corrosion. If moisture finds its way into the panel, it can cause internal corrosion. ...
- Electrical issues. Faulty wiring prevents your solar panels from performing well. ...
- Micro-cracks. ...
- Hot spots. ...
- PID effect. ...
- Birds. ...
- Snail trails. ...
- Roof issues.
Caption: Perovskites are widely seen as the likely platform for next-generation solar cells, replacing silicon because of its easier manufacturing process, lower cost, and greater flexibility.What is the future of residential solar? ›
Photovoltaics (PV) and concentrating solar power are likely to continue to grow rapidly—the National Renewable Energy Laboratory (NREL) projects solar energy could provide 45% of the electricity in the United States by 2050 if the energy system is fully decarbonized—and technology costs are projected to continue to ...What is the lifespan of a solar panel? ›
The Lifespan of Solar Panels
Solar panels, also known as photovoltaic or PV panels, are made to last more than 25 years. In fact, many solar panels installed as early as the 1980s are still working at expected capacity.
Once you pay off your loan or buy your system outright you will essentially be getting energy for free. When it comes to payment, those who are using solar energy will still get a monthly utility bill. This will show how much energy you produced versus how much energy you used for the month.How long does it take solar panels to pay for themselves? ›
The most common estimate of the average payback period for solar panels is six to ten years. This is a pretty wide range because there are many factors that will influence the number of years it can take to pay off your panels and the monthly savings you can expect.Do solar panels increase bills? ›
PV solar panels enable you to generate your own free electricity, which is then used to power your household appliances and other electrical devices. This means that you won't need as much electricity from the grid so will save money on your bills, especially if energy prices rise.Why are more people not using solar energy? ›
It all comes down to cost and infrastructure. Ultimately, the biggest hindrance to the development of renewable energy is its cost and logistical barriers. Once the infrastructure for renewable energy sources grows, we will see it take off in popularity and use.
According to the National Renewable Energy Laboratory, homes with solar panels sell 20% faster and for 17% more than those without.Are solar panels worth it for seniors? ›
Solar panels are definitely worth it for seniors. If you can purchase your system outright, you see the biggest savings overall. However, with a $0-down, low-interest solar loan, your monthly payments will typically be lower than your electricity bill, allowing you to see savings on day one.Does rain hurt solar panels? ›
Solar panels will still work even when the light is reflected or partially blocked by clouds. Rain actually helps to keep your panels operating efficiently by washing away any dust or dirt.Can rain destroy solar panels? ›
The rain itself will have no effect on your solar energy system. Solar panels are made of waterproof material, hence moisture won't damage them.Does rain damage solar panels? ›
Luckily, solar panels are waterproof by design, so you don't have to worry about them rusting or malfunctioning when rain falls. In fact, the pressure from a light rainstorm can even wash dirt and debris from solar panels –– saving you some time on spot cleaning.Does mold grow under solar panels? ›
Solar panels are similar to your home's roof. They can slowly develop organic growth like moss, mold, mildew, algae, and lichen.What type of roof is not good for solar panels? ›
Roofing materials that are not ideal for solar include wood and slate roofs. For one, these roofing materials are brittle, so solar panel installers can't just walk around on the roof as they normally could. This makes for a more difficult and, therefore, more expensive installation process.Can High winds knock your solar panels off your roof? ›
This means the system needs to stay away from the roof's edge because that is the area most likely to suffer from uplift. Uplift can happen if the wind makes its way between the roof and the solar panels, causing the solar panels to lift off the roof.
In fact, one study confirmed that solar installations increase a home's resale value by up to $5,911 for each kilowatt of solar panels installed, and another estimated an increase of 4.1% of the home's value.Do solar panels void your roof warranty? ›
In most cases, solar panels will not void a roof warranty. However, you have to be cautious of some companies that may install solar panels without considering the consequences of some actions, such as drilling holes in your roof.
Having a source of power for your home or business that is always available could be the biggest difference in how things work in your life. In addition, tax rate changes and solar panel availability could mean that 2023 is the best time in the next few years to invest in a solar power system.Will solar panels get cheaper in 2023? ›
For the 2022 tax year, the credit stands at 26 percent of the cost of solar system; it is slated to drop to 22 percent in 2023 and end in 2024.Will solar panels be cheaper next year? ›
Prices are expected to continue to drop over the long term. However, the cost of solar installation will not drop at the same rate because hardware costs are less than 40% of the price tag for a home solar setup. Don't expect home solar to be dramatically cheaper in the future.Why is my solar true up bill so high? ›
The High Usage Surcharge takes into account the energy your solar system generates. If applied, the Surcharge indicates that you are using significantly more energy than you generated. The High Usage Surcharge reflected on your monthly bill is not paid until your Annual True-Up.Do you make your money back on solar? ›
How much money do you get back from solar? The federal tax credit will allow you to recoup 30% of your investment right off the bat. Additional savings can be obtained through local and state-level incentives, net metering programs, and savings on your month-to-month electric expenses.Do solar panels on homes make a big difference in energy bills? ›
Your monthly electricity costs will reduce dramatically once you start using solar panels in your home. And of course, this will have a huge positive impact on your energy bill over time. You'll be able to see a huge difference in your energy bill if you have been using energy for over 30 years.Why do mortgage companies ask if you have solar panels? ›
When we do the loan, we want to make sure that the buyer gets a copy of the solar agreement that the owner has, we want to make sure that there is a warranty against all malfunctions and defects, and we want to make sure that the lease is transferable to our buyer regardless of whether the solar panels are leased or ...Is there anything negative about solar panels? ›
High upfront cost
The large upfront cost is one of the biggest drawbacks of solar panel systems. As of January 2022, the average cost of solar in the U.S. is about $3.00 per watt. So, a 6 kW solar panel system would run you around $18,000, on average, before the federal tax credit is applied.
High initial costs for material and installation and long ROI (however, with the reduction in the cost of solar over the last 10 years, solar is becoming more cost feasible every day) Needs lots of space as efficiency is not 100% yet. No solar power at night so there is a need for a large battery bank.Is solar power for home worth it? ›
There are various ways solar panels pay off, from reducing your carbon footprint to increasing your home's value. The National Renewable Energy Laboratory (NREL) found that homes with solar power increased in value by $20 for every dollar saved on energy. That is a 20-to-1 return on investment (ROI).
Wind turbines have a higher energy yield than residential solar panels. Wind turbines can harness up to 50% of energy compared to 20% for solar panels. In fact, one wind turbine can generate the same amount of electricity in kWh compared to thousands of solar panels.Can a house be powered by solar panels only? ›
With a modern solar energy system, including power storage, you can definitely run a whole house completely on solar power. Today's high-efficiency solar panels and solar batteries make it cheaper than ever before to power an entire home exclusively using solar energy.What is the latest solar panel for 2022? ›
- Q Cells: Best Value.
- Silfab: Best Warranty.
- Canadian Solar: Most DIY Friendly.
- Panasonic: Best Panels for Hot Climates.
- REC: Best Durability.
- SunPower Maxeon: Most Energy-Efficient.
- Longi: Best Mid-Tier Option.
|Advantages of Solar Energy||Disadvantages of Solar Energy|
|Reduces Electricity Bills||High Initial Costs|
|Provides Tax Incentives||Time Consuming|
|Pairs with Solar Battery Storage||Weather Dependent|
|Environmentally Friendly||Stringent Criteria|
The energy generated by the sun throughout the manner of heat as well as light energy. Advantages: Solar energy somehow does not pollute the environment. It is possible to generate power using solar energy sometimes in distant as well as unreachable regions.What are 2 main advantages of using solar energy? ›
- Solar power is low-emission. ...
- Solar power is suitable for remote areas that are not connected to energy grids. ...
- Solar power provides green jobs. ...
- Solar panels contain no moving parts and thus produce no noise. ...
- In the long run, solar power is economical.
|Solar cells use renewable energy source that is inexhaustible||Solar cells cannot be used in absence of the light|
|It does not generate any emissions or radiations so environment friendly||It incurs a very high initial cost for installation|
According to Zillow, homes with solar panels sell for approximately 4 percent higher on average than homes without solar energy. That means an added value of about $9,200.Why don't we use solar energy more? ›
It all comes down to cost and infrastructure. Ultimately, the biggest hindrance to the development of renewable energy is its cost and logistical barriers. Once the infrastructure for renewable energy sources grows, we will see it take off in popularity and use.How many solar panels would it take to power a house? ›
The average home in the U.S needs between 16 and 20 solar panels to cover its electric bills. Three main factors impact how many solar panels you need: your energy usage, the sunlight in your area, and the solar panels you choose.
The average cost of a solar panel installation in 2022 ranges from $16,870 to $23,170 after taking into account the federal solar tax credit, with an average solar installation costing about $20,020. On a cost per watt ($/W) basis, solar panel prices in 2022 average $2.86/W (before incentives).How long do solar panels last? ›
Solar panels, also known as photovoltaic or PV panels, are made to last more than 25 years. In fact, many solar panels installed as early as the 1980s are still working at expected capacity. Not only are solar panels remarkably reliable, solar panel longevity has increased dramatically over the last 20 years.Is solar the future? ›
Photovoltaics (PV) and concentrating solar power are likely to continue to grow rapidly—the National Renewable Energy Laboratory (NREL) projects solar energy could provide 45% of the electricity in the United States by 2050 if the energy system is fully decarbonized—and technology costs are projected to continue to ...How many solar panels do I need? ›
You can calculate how many solar panels you need by multiplying your household's hourly energy requirement by the peak sunlight hours for your area and dividing that by a panel's wattage. Use a low-wattage (150 W) and high-wattage (370 W) example to establish a range (ex: 17-42 panels to generate 11,000 kWh/year).Do solar panels work at night? ›
The short answer is: no, solar energy systems only operate during the day. This is because the power from the sun is key to how a solar panel turns light into electricity.How do solar panels affect your roof? ›
Solar panels can protect your roof from the sun's harmful rays. The panels absorb sunlight that otherwise would be absorbed directly by your shingles, sun bleaching them and drying them out. Additionally, air flows between the panels and the roof, cooling the roof considerably.What are the three limitations of solar cells? ›
- The solar panels use semi-conductors (made up of silicon). ...
- The efficiency of the panels for the storage of electricity is not sufficient.
- Silver is used in the panels as a soldering material which is very costly.