Here at Solar Action Alliance, we like to inform our readers about all things solar. One of the most pressing questions for somebody that is considering installing solar panels on their home is: what will this cost me?
It’s a good question, and one that seems to generate a lot of different answers from a lot of different websites. Some people try to answer by including your savings – but we find that most people are just curious about the upfront cost. If you want to know about the savings you can find by going solar, check out our page on solar savings!
We’re going to try and answer this question as simply as possible.
How Much Do The Solar Panels Themselves Cost?
So how much does an actual solar panel cost? Well, it depends on a few things: how powerful the panel is and who is buying the panels.
If you are not a solar installer and are considering doing a DIY solar panel installation on your home, you will likely have to pay retail prices for each panel. The general rule of thumb is that installers who buy in bulk pay around $0.85 per watt, while retail consumers pay around $1 per watt.
A typical solar panel ranges from 150-350 watts, so for this example we’ll cut right down the middle and use a 250 watt solar panel.
If you are going through an installer, you’re looking at around $212.50 per panel (250 watts x .85 cents). If you’re going DIY and buying panels yourself, you’re looking at around $250 per panel (250 watts x 1 dollar). Keep in mind that this is before tax rebates!
Average Cost Per 250 watt Solar Panel: $212.50
How Much Will the Whole Installation Cost me?
While it can be useful to know the price per solar panel, the real price comes from the entire solar power system and the installation. We are not a DIY-focused site, so for this cost analysis we are going to focus solely on installation costs through a certified solar installer.
Beyond just the cost of solar panels, there are many costs that go into a full-scale solar installation on your home. Here is a quick breakdown of all the costs that go into an installation:
- 25% – Solar Panels
- 10% – Inverter
- 10% – Installation
- 10% – Balancing of System
- 45% – Operational Costs (Design, Permitting, Connecting etc)
We will do a future post with a full breakdown of these costs, but what is the actual cost of a solar power installation on your home?
Let’s start by looking at the average installation. The average installation on an American home is a 5 kilowatt (5kW) system. For 2020, the average cost per watt of solar systems in the US is $2.96 cents.
So let’s do the math! If we multiply 5,000 watts by $2.96, we get $14,800.
But wait, don’t forget about the Federal Solar Investment Tax Credit! With this credit (set at 26% for 2021 and 2022), you save 26% of your total solar installation cost through a tax credit. When we take this 30% credit out of $14,800, we arrive at $10,952.
The average cost ($2.96 per watt) of the average solar system (5 kW) in the United States is approximately $10,592 after available tax credits.
