Switching to solar energy is definitely an eco-friendly decision, but the financial considerations can sometimes be a bit puzzling. Although there’s a huge potential for saving money on your energy bills, the transition still includes some significant initial costs. To help you better understand the process and financial breakdown, here are some valuable insights to assist you in making an informed decision.
Understanding Solar Power Costs
When trying to determine how much it costs to switch to solar power, it’s crucial to bear in mind that the cost isn’t a fixed figure. It fluctuates based on multiple factors such as the size of your solar panel system, your geographical location, the type of solar panels used, and any required upgrades to your current system to accommodate solar.
As of 2023, the average cost of installing a 6-kW solar system in the U.S. is between $12,000 – $30,000 before accounting for any government incentives or rebates. In California, the cost of an average system after incentives and rebates is about $12,012; in Nevada, $10,920; in Arizona, $10,248, and in New Mexico, $14,238 (Forbes).
Consumer Affairs provides an excellent breakdown by state of the average financial cost of a new solar system.
Of course, depending on your particular energy needs the costs can fluctuate. If your family wants to be 100% energy independent, needs to power multiple electric vehicles, or has a backyard pool, the price could be more expensive.
The Price Tag on Solar Panels
Homeowners have a choice of which type of solar panels they would like to install. Monocrystalline solar panels are the most energy-efficient and require less space. In addition, they have a longer lifespan and perform better in areas that experience higher temperatures. Over 90% of the materials used to manufacture these panels are recyclable. Also called single-crystalline panels, these can cost between $6,000 – $9,000 for an average installation.
Although not as energy efficient, polycrystalline solar panels are a more affordable choice. It takes more of these panels to generate the same amount of energy as monocrystalline solar panels, thus requiring more rooftop space. Polycrystalline panels are also 90% recyclable. These can cost between $5,400 and $6,000.
(American Solar Energy Society)
Adding Battery Storage
Investing in battery storage to be able to use all of the solar power your panels generate is something to consider. Battery storage makes your home energy independent since it will significantly reduce the need for grid electricity at night, on cloudy days, or when there are power outages. They are also low maintenance and easy to install. However, battery storage is an additional expense costing anywhere between $9400 – $23,000.
For more information about the benefits of adding battery storage to your solar installation check out “Renewable Energy Battery Storage Backups – Should You Invest?”
Installation and Additional Costs
Beyond the cost of the panels, switching to solar power involves other expenditures, as well. Installation costs can vary, depending on the complexity of the task, and you might also need upgrades to your home’s electrical system.
Installation involves both hard costs and soft costs. Hard costs can include items such as additional mounting hardware, wiring, and inverters. Soft costs include labor, permits, inspections, and administrative overhead.
The installation cost for an average solar panel system typically falls between $2,000 and $5,000.
And it’s possible that your roof may need to be significantly repaired or replaced so that it lasts as long as your solar panels. Solar panels can have an average lifespan of 30-35 years.
Maintenance of Your Solar Power System
Although solar panels require relatively low maintenance, you should anticipate some general upkeep and potential repair costs as well as the eventual need to replace the inverter.
Regular inspection and cleaning can keep your solar system in optimal working order. On average, this can cost about $1200 annually.
Sometimes extreme weather can damage solar panels which can require repair or replacement. Most warranties last 10-15 years and cover the cost of the panels, but labor and shipping costs are not always included in product warranties.
If your property is surrounded by trees, you may encounter the need to hire a tree service to trim back branches over time if they start to block the sun from reaching the panels. Those trees that were below your roofline when you installed your system could grow substantially over the years.
Fixr.com offers an informative guide to understanding the maintenance costs associated with solar power systems.
Incentives and Rebates Bring Costs Down
Fortunately, an array of incentives and rebates can significantly reduce the cost of your transition to solar power. Congress renewed The Federal Investment Tax Credit (ITC) which now provides a 30% tax credit on the cost of your solar system if it was installed between 2022-2035.
And many state and local governments offer their own financial incentives for switching to solar energy. Doing a bit of research can help you understand how to maximize any offsets to the cost of installing your new system.
For additional local, state, and utility incentives, visit the Database of State Incentives for Renewables & Efficiency.
Your Return on Investment from Solar Energy
While the initial expense might seem daunting, the long-term savings of changing to solar power can be substantial. An average solar panel system will pay for itself in energy savings in 7 to 20 years. Considering the lifespan of a solar power system is 30-35 years, you can potentially save tens of thousands of dollars over the system’s lifetime.
And if you sell your home before you reap the benefits of your solar power system, you can still see a return on your investment. According to experts in the real estate industry, homebuyers are willing to pay 4.1% higher, or up to $15,000 more, for a home that is energy efficient. And in certain housing markets, that amount goes even higher.
Architectural Digest offers even more information on how changing to solar power can increase your home’s market value.
The Bottom Line
Although the cost of changing to solar power involves an upfront investment, there are a number of incentives available to offset the initial costs. And keep in mind the long-term savings, the increase in your home’s value, and the positive impact you’re making on the environment.
With a well-rounded understanding of the process and some research regarding your specific needs and circumstances, you can find a solar power solution that fits both your budget and your commitment to sustainable living.
Please feel free to reach out to us for a FREE CONSULTATION or FREE QUOTE if you have any questions about solar energy or how you can add a solar power system to your home or property.
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