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Sustainability March 2, 2017
Relying on renewable – particularly, solar – energy is becoming increasingly popular. In fact, in the last decade, solar energy has increased in prevalence by over sixty percent. So how much green would you have to spend to add this green energy to your own house?
The good news is that the cost of solar electricity has drastically decreased compared to the price 40 years ago, going from $76 per watt in 1977 to about $0.65 per watt in 2016. However, there are a number of other factors – like the solar panels themselves, plus their installation and operation – that determine how expensive solar energy would be for you. To find out exactly what variables determine solar panels’ (often expensive) price tag, ENTITY talked with Barry Jacobson, president of, and certified solar PV installer at, Solar Impact.
Whether you’re considering solar panels to help the environment or to decrease your monthly electricity bill, here’s a breakdown on the cost of solar panels and everything that goes into installing them…plus a few (monetary) benefits that could make solar worth the price and effort.
READ MORE: Solar Power: The Good, the Bad and All the Facts You Should Know
If you’re thinking about solar, you should be happy that prices for the actual panels have dropped by 60 percent since 2010. On average, though, a homeowner can still spend between $4,000 and $16,000 – or, approximately 30 percent of their total solar budget – on residential solar panels. The price can vary based on the size of each panel, the material it’s made out of it and how many panels you need.
Besides looking at panels’ basic price tags, you can also figure out the cost of solar by comparing the price of the solar panels to how much electricity they can produce. For jargon lovers, this equation is known as the cost per watt ($/W). Because the panels’ power potential factors into your bottom line, the most expensive panels might not actually be the best for you. Instead, you should consider which kind of panels – ranging from those made with monocrystalline silicon solar cells to polycrystalline silicon solar cells – would work best for where you live, what kind of roof space you have and what amount of money you’re willing to spend. Whatever route you take, Jacobson says solar panels last an average of “30 to 40 years.”
Inverters, which make up about 10% of total costs, convert electricity from the solar panels into energy that can be used by plugs for wired products. In the words of your old physics professor: direct current (DC) is changed into an alternating current (AC). Inverters also allow electrical currents to be shut off, if necessary. On average, the inverters cost about $3,000, according to Jacobson. One good piece of news, though: inverters are following the solar panel trend and dropped in price throughout 2016.
Before you write a $3,000 check, though, you should know that there are two types of inverters: micro inverters and string (or central) inverters. Micro inverters are more expensive, and replacing them requires more work. Why would you bother with them, then? Micro inverters are installed on the back of each solar panel, which allows for maximum performance of each panel. (Basically, micro inverters are private tutors that help each panel earn an A+ in power productivity). Although more expensive initially, micro inverters also last longer than string inverters.
String/central inverters are easier to maintain because they do not have to be installed on each panel. Instead, one string inverter is intended to service all of your panels. The downside? Poor performance by one panel can affect the performance of other panels. Although initially cheaper, string inverters also typically have a shorter lifespan than micro inverters do.
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Now for the pieces of equipment that probably don’t pop into your mind when you think of solar panels. Solar panels aren’t actually nailed directly to your roof; instead, they’re connected to your roof via racks or to the ground/roof of your carport via mounts. Both racks and mounts allow installers to place panels at the most sun-friendly angles. How much will these cost you? “Roof support racking usually averages out to $2,000,” according to Jacobson. The price can vary based on the ease of installation and the surface you want your panels installed on.
Other equipment costs include those for a performance monitoring and tracking system – which lets you observe how much energy your panels are producing – and, in some cases, solar batteries. Some states allow net metering, in which people with solar panels “store” their extra power in the city’s electrical power grid and receive a credit for their extra energy. When their panels don’t produce all the energy their house needs, they buy energy from their electrical supplier – but get the “extra” amount they produced earlier for free. In other cases and states, buying your own solar battery makes more sense – even though they can cost around five grand.
One surprising fact about solar panels is that “the type of solar panels we install today are very similar to the ones developed in the 1950s,” according to Jacobson. However, that doesn’t mean installation comes with 1950s prices!
The cost of actual labor – plus permits and inspections – ranges from $2,000 to $5,000, depending on where you live. When you’re charting out your prices, expect to spend 30 percent of your budget on these fees. However, you could see reduced labor prices in the near future. A recent report found a drop in price between the first and second half of 2016, with solar power analyst Ben Gallagher predicting: “Solar hardware firms will need to not only compete on price, but they’ll have to…help reduce soft costs [like labor and installation].”
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The final 20 percent of the total solar panel system is from the cost of operation, including maintenance, repair, insurance, overhead costs and monitoring. However, Jacobson says, “Annual maintenance costs are minimal. The main cost is washing the solar panels with mop and water when they get dirty.”
After reading all these facts and figures, you’re probably wondering if solar panels are worth the cost and effort in the first place. The truth is, solar comes with its share of monetary benefits.
For instance, installing a small, 5 kW system increases a house’s retail value by almost $30,000 on average. Studies have also found that, if you put your house on the market, solar panels can help it sell 17 percent faster. “Usually, the [overall] value [of solar panels] is more than the cost of the solar equipment,” Jacobson says. “Also, monthly savings will continuously increase over the years.”
READ MORE: Shedding Light On The Benefits Of Investing In Solar Energy
Jacobson also points out that “solar electricity is cheaper than electricity from the utility, and you lock in your electricity rate for the next 25 – 30 years.” Energy Sage recently examined the 20-year savings that solar energy can create in various states. Those in California have been found to save as much as $28,360 on electricity, and it’s not just the sunny states who can benefit. Solar in New York and Massachusetts also report almost $30,000 in savings.
There’s no doubt about it: solar panels – and solar energy overall – is a pricy investment, even in light of recent cost reductions. However, like any investment, the initial payment can be worth the payout later. Now, it’s just up to you to decide if solar panels’ numbers stack in your favor!
