The Cost of Solar Panels:
Is The Price Of Solar
Holding You Back?

Learning more about the cost of solar panels can get pretty complicated.


When people ask how much solar panels cost I think they can usually see the frustrating answer coming from a mile away:

"It depends".

Of course, that answer isn't too helpful. After all, how much closer does it really get you to your goal of learning how much solar power will set you back?

Unfortunately, when it comes to solar panel systems, there is no simple answer to the cost question.

Why is this?

The reason it gets complicated is that there are many factors involved that affect your solar price. Until you take some of these things into account, there is no way you can get a clear idea of solar cost.

So let's take a look at some of the variables that will affect how much you have to pay to go solar:

  • Grid-tie system or batteries?
  • Reducing your electric bill or eliminating it?
  • How large is the installation?
  • Residential or commercial?
  • Ground mount or rooftop?
  • What incentives are available in your area?
  • What color is your hair?

Alright, that last one was just to see if you were still paying attention.

But you don't want a big list of questions, you want to know about the cost of solar panels, right?

So let's assume we're talking about a batteryless grid-tied system. A recent report by the National Renewable Energy Laboratory (NREL) estimated the cost of solar power for a residential rooftop solar installation to be $5.71 per installed watt. This number could vary significantly, however, depending on the solar market in your region.

If we assume the $5.71 per installed watt cost, a 5 kilowatt rooftop system will cost you about $28,550. Of course, incentives should get a big chunk of that amount back into your bank account. For instance, a 30% tax credit is offered by the federal government.

There are other ways to save money too, including:

  • Installing yourself (be careful with this, though, since it could make you ineligible for government incentives)
  • Getting together with like-minded neighbors and buying panels in bulk

So, where is the money going when you shell out thousands of dollars for a rooftop solar installation?

Of course there are the costs of the solar panels, inverter, racking, wiring, and labor. There are other costs too, however, including permitting and other regulatory costs. In a July 2012 article in Forbes, former Westinghouse Solar chief executive Barry Cinnamon blamed this "red tape" for making solar significantly more expensive in the US than in Germany. It seems as though a streamlined permitting process is one option for reducing the cost of solar panels.

Though you won't know the exact cost of your future solar installation until you get an estimate that takes your specific location into account, you can use the variables and estimates on this page to get a ballpark figure before you speak with a solar installer. This will give you a good basic understanding of the cost of solar energy and make you aware of the kind of questions you should be asking.

Take your time and don't feel you have to move forward until you're questions have been answered to your satisfaction. Producing clean energy on your rooftop is a great goal but it has to make financial sense as well.

Good luck!



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