Solar Panel Installation Cost Breakdown

Juliet D'cruz

Updated on:


Are you planning to buy a solar panel system?

The cost of solar panel installations around the country is between $9,000 to $28,000. The national average is $18,500 for a 6kW system or $2.50 to $3.50 per watt.

However, the price might be way different than the average. It depends on several factors, like the geographical area, your energy consumption, labor costs, and more.

How much do you need to shell out for a home solar panel system? Keep on reading to see our solar panel installation cost breakdown and more.

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Size of the Solar Panel System

The size of your solar panel system determines its cost. It mostly depends on your household’s electrical consumption. The higher your requirements, the larger the system.

You can arrive at an estimate, but you have more factors to consider. If you’re curious, look at your past utility bills. Check your monthly and yearly consumption. Divide it by 30 or 365 respectively to get your daily average in kWh (or kilowatt-hours).

Your daily average usage is your solar panel system’s target production if you want to cover 100% of your needs. However, you need at least a 25% cushion as solar panels don’t always operate at 100% efficiency.

Of course, it’s different if you don’t need 100% coverage. For a more accurate estimate, contact a solar panel installation contractor instead.

Location of the Property

Your consumption isn’t the only factor affecting your solar panel system size and cost. Your current area is also a huge factor in determining the total solar panel installation cost. It affects the cost in many ways, as do the following factors.

Market Conditions

The cost of solar panel installation varies like how rent differs in prices across the country. Labor costs and local competition between contractors dictate the total cost. On top of that, they must also factor in the state and local policies.

State and Local Incentives

The federal government grants investment tax credit (ITC) for homeowners. It allows you to deduct 26% of the installation cost from your federal taxes. The costs can even be lower, depending on the incentives in your area.

Check with your state to see the credits or incentives they offer for solar panel installation. If you’re one of the many people who file taxes for free online, then the tax program you use to submit your return should ask you about any renewable energy installations you have made. Utility providers or other organizations may also offer credits or rebates. Doing this ensures your solar panel system is at its lowest price.

Property-Specific Factors

The amount of sun your property gets will play into how much money you’ll shell out for your solar panel system. Some states get more sun than others, and it may also differ between cities. If your area is rainy, you must invest in a more efficient system.

The specific location of your property matters, too. You must consider the amount of shade your roof gets during the day.

If a building obstructs the sun, your solar panels will have less output. To compensate, you must increase the system’s size.

Your roof’s orientation also plays a role in the price computation. Does it face the ideal direction for collecting solar energy? If not, you must increase the size of your solar panel system as well.

Solar Panel Type and Brand

The equipment used in solar panel systems can differ depending on your needs. For example, the type of inverter for your system might be different than your neighbors’. Microinverters cost more than string inverters, but they have a higher rate of electricity production.

Polycrystalline panels have a lower upfront cost than monocrystalline panels. The battery setup’s round-trip efficiency affects the cost in terms of energy loss.

As with most things, the brand matters, too. However, a higher price doesn’t always equate to better performance. Make sure to do your research in this area, as well.

Type of Solar Panel System

There are three main types of solar panel systems: grid-tied, off-grid, and hybrid.

Grid-tied systems, as the name suggests, connect to the grid. This way, you can draw power when the solar output of your panels is lower than your needs.

It also allows you to enjoy the benefits of net metering. This feature allows you to export excess power to the grid. Utility companies then pay you with credits.

Off-grid is the exact opposite—your home doesn’t connect to the grid. You rely solely on your solar panel system for all your electricity needs. Off-grid systems require batteries to store excess power for later use.

Hybrid systems offer the best of both worlds. You’ll store excess power in a battery, but you can still draw power from the grid for backup. As you might expect, they’re much more expensive than the other options.

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Solar Panel Installation Cost Breakdown

Your choice of installer also plays into the total cost of installation. Smaller companies often charge less than bigger companies, but you might sacrifice your peace of mind and quality work to get lower costs. It also applies to maintenance contractors.

Do your research in choosing the best contractor for your home. Consider their experience and knowledge about how to install solar panels. Then, compare their prices through a quote and learning the right questions to ask solar companies.

They’ll factor in several considerations when they inspect your property. For instance, they’ll look at the roof. Homes with ideal roofs, like a flat roof, require less time for installation, meaning they cost lower.

Homes with skylights and irregular rooflines can make the installation more complicated. If your roof needs a replacement before installation, it adds to the cost, as well.

Get an Estimate Now

To get a proper solar panel installation cost breakdown, it’s best to approach solar companies instead. They can offer you a better estimate based on your specific needs and conditions.

Never rely on other people’s opinions, even if they have a solar panel system at home. After all, their home is different from yours. You can, however, ensure more savings by researching properly.

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