How much do solar panels cost?


Factors Affecting the Cost of Solar Panels

The cost of solar panels varies for households across the country. Indeed, the following factors have an impact on the costs for the owners.

Home energy consumption

The amount and type of energy your household depends on will impact the cost of solar panels. For example, a household that relies heavily on electricity will want a larger solar system than a household that primarily uses gas appliances.


Where you live has one of the biggest impacts on your solar panel costs. Part of the Cost of life in an area is how much you pay for electricity, which is factored into the price of a solar panel system.

Additionally, your geographic location determines how much sunlight your home receives. Some states with the most sunlight all year round include Arizona, New Mexico, Nevada, Texas, California, Florida and Utah.

But the presence of sunny days does not necessarily mean lower costs. Instead, the most affordable states for installing solar panels often have state-level financial incentives to reduce the overall cost to homeowners.

Solar tax credits

Solar tax credits are available at the federal level to offset costs for homeowners interested in installing solar panels on their home. A tax credit is a dollar-for-dollar savings on the taxes you already owe to the federal government. The tax credit is a major incentive, because you’ll essentially get a discount on the high price of an installation.

The Investment tax credit offers a 26% tax credit for solar panel systems installed between 2020 and 2022. In 2023, homeowners who install solar systems will receive a 22% tax credit. Currently, the tax credit expires in 2024, but Congress may extend this tax credit opportunity to encourage solar energy in the United States.

Additionally, homeowners in some states can take advantage of state-level tax credits to further offset their costs.

System size

The larger your solar panel system, the higher the costs. Your household energy consumption determines the number of panels you will need for an appropriate amount of electricity production.

When deciding on the size of your system, the solar company should be able to help you determine the appropriate size for your home.

Also, the goals of your solar system will come into play. If you are just looking to reduce your energy costs, you may need a smaller system. But if you want to completely eliminate your electric bill, a larger system may be required.


Residential solar panels are usually installed on the roof. With this, the condition and layout of the roof will impact your costs.

As a general rule, solar panels should be tilted for maximum exposure to the sun. Roofs without a proper slope could require the installation of sloped platforms, which increases your costs.

If the roof is older or in poor condition, many solar companies recommend repairing or replacing the roof before installing the solar panel. Of course, adding a new roof to the mix will increase your costs.

The home environment

Not all homes are good candidates for solar panels. If yours sits in the shade of beautiful trees, you probably won’t get the most out of your panels without cutting down your trees. Removing trees from your yard impacts the overall cost of the facility and can cause your energy consumption to increase during the summer months. While environmental impact is one of the primary motivations for using solar panels, cutting down trees defeats that purpose.

However, if you live in sunny terrain, it makes sense to consider solar power. A solar company should be able to give you a reasonable assessment of your home’s suitability. But you’ll have to decide for yourself whether the changes needed for an optimal solar setting are right for your home.


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