Perhaps you’ve been thinking about installing a residential solar system, but you’re hesitant because you’ve heard they’re expensive. Most people know that solar panels help you reduce, and sometimes entirely eliminate, your monthly electricity costs while providing a more eco-friendly alternative to traditional electricity. However, there is still a lot of mystery surrounding the actual costs associated with buying and installing a home solar system.
Sunlight is free, but the solar systems required to turn sunlight into energy that powers your home are not free. Decades ago, when people in the US started using solar panels on their roofs, the cost was considered prohibitive by many people. However, as solar panels have increased in popularity and have become more widely available, many homeowners are happy to discover that they are now quite affordable.
Here are some facts about the costs associated with solar power:
- The cost will be specific to your customized system and the final price will be influenced by several factors, including the size of your roof, how many panels you want, and which panels you choose.
- Solar energy continues to become more affordable. According to the Climate Reality Project, the cost to produce one megawatt-hour of solar power fell a whopping 86% from 2009 to 2017!
- According to a 2020 report released by the International Energy Agency, solar energy is now the cheapest electricity in the world.
- In the US, the average installation cost for residential solar panels is around $17k – $20k, and this is after redeeming the federal solar tax credit. There are numerous financing options available that we’ll discuss in more detail below.
- On average, it takes around 5 – 7 years to save the amount of money you’ll spend to install your solar system. In addition, solar panels have an extremely long life, so you’ll enjoy reduced energy bills for many years to come.
Reducing your power costs with solar panels
If you’re concerned about the upfront cost of solar panel installation, you have several options including a solar lease or a solar loan. A solar lease works exactly the same as a car lease, you simply pay a monthly rate for as long as you have the solar panels. Solar leases operate with a fixed monthly fee, so the amount you pay won’t change, even when energy prices rise or fall. Solar loans are a popular choice because you typically won’t have to make any net payments – your solar panels make the payment for you and you receive instant savings.