Solar panels are a growing trend—and a smart one at that, but the factor that has deterred most people from jumping on board the solar photovoltaic bandwagon is the cost of solar panels. But how much does solar panel installation really cost?
The truth is that the cost to install solar panels “depends.” There is no one-size-fits-all model for incorporating solar panels into your home’s energy supply. You can go as big or as small as you’d like. The cost is also relative since the amount you end up saving on energy consumption also plays into the amount you are spending to initialize that process.
Let’s look at some of the basic solar panel installation costs you could be looking at if you decide to incorporate solar energy into the construction of your home and solar panel system.
How Much Does Installing Solar Panels Cost?
Before you can determine the cost of installing solar panels in your home, you first need to determine the size of the solar energy system you need to install to counter your monthly energy bill.
This will vary based on numerous factors, including the size of your home, the type of heating and cooling systems you have installed in your home, and the number of non-standard items you have in your home (hot tub, swimming pool, electrical appliances that run continuously, etc.).
This also applies to your business, and when you are doing your calculations to determine the costs, remember to factor seasonal energy increases into your equation. If there are months when the amount of time you need to run your air conditioner or heater is increased, that will reflect in your energy bill, and you will want to plan to accommodate the maximum energy usage.
Of course, that also means planning for future renovations and expansions that might cause your energy consumption to increase. However, this may be addressed later by incorporating another solar panel into the expansion, as long as your first installation leaves room for the connection.
For the purpose of providing you with a basis of information for calculating solar installation costs, we’ll look at some average electricity costs for US homes. Still, it’s important to remember that these may vary based on the aforementioned variables and fluctuating energy costs across the country. It is always a good idea to consult professionals such as a local solar company to determine the appropriate size and cost of installing panels on your home.
The average US home consumes 1kW of electricity per hour (kWh), and with 730 hours per month and the average price of a kWh of electricity costing $0.10, the average US home pays approximately $73 a month for electricity. Based on this figure, how many solar panels would you need to install to generate enough capacity of solar power to run your home? This largely depends on the other variable: the average amount of sunlight your home is exposed to.
How much do solar panels generate? The average generating capacity of a panel is 10 watts per square foot at a conversion efficiency of 12 percent, which translates into 100 square feet of panels per kW you generate. That 100 square feet of solar panels would be enough to power your home if the sun were out 24 hours a day.
Since it isn’t, you need anywhere between 400 and 800 square feet of solar panels to power your home for the entire day. This will depend on where you live and how much sun exposure your home gets. Of course, these are estimates. Your home may consume less energy and thus require fewer square kilometers of solar panels, or it may have higher sun exposure and thus require fewer square kilometers—or the opposite may be true.
That is why it’s important to have a much clearer outline of the characteristics of your house to get an accurate idea of the cost of installing residential solar panels.
How Much Will Solar Panel Installation Cost You?
Before we get into the average cost of installing solar panels, it’s important to note that how you store your solar energy will also affect the overall cost. You have a couple of options for this, including using batteries to store energy.
You can also use reverse net metering to monitor how much energy flows into the grid from your solar system so you can be awarded credits for when your panels aren’t generating power and you need to consume from the grid. However, when it comes to calculating installation costs, you also need to know what components you will be required to install to make the solar system more effective.
What Components are Required in the Installation of Your Solar Panel System?
There are usually four components:
Panels- Harnesses the sun’s energy and converts it to electricity. Solar panel cost often increases with an increase in efficiency.
The charge controller- Regulates the flow of electricity from the panels, protecting the battery.
The battery- Stores the generated electricity for later use when the solar panels are not producing more.
The inverter- Converts the stored D.C energy into A.C, which can run standard electrical equipment.
Factoring in the cost of each component, the cost of installing solar panels averages around $7-$9 per watt. That means solar panel installation costs for a 5kW solar energy system would be between $25,000-$35,000.
Of course, installing solar panels may not be so expensive, especially when you factor in federal and state solar incentives and rebates. Even though it may seem like there is a long payback period before you start to see the benefits of your installation, that time is shortening each year. This is because the cost of traditional energy sources continues to rise, and the technology behind solar PV installation has become more efficient and inexpensive.
In fact, it is largely the cost of the auxiliary equipment that drives up solar installation costs. As these prices become more affordable, solar systems are getting closer to achieving a 10-year payback period, even without incentives such as the federal solar tax credit. For a more accurate estimate, get quotes from several solar companies to determine how much your solar system will cost.