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Published on February 4th, 2014 | by Zachary Shahan

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What Is The Current Cost Of Solar Panels?

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February 4th, 2014 by Zachary Shahan
 

Originally published on Cost Of Solar (with updates made to prices).

I think one of the first questions people ask when they think about going solar is: How much do solar panels cost? Unfortunately, there’s no simple answer to that question… that is, if you want me to answer the question you’re really asking. I can very easily answer the question “How much do solar panels cost?” (see below), but I think the real question you’re asking is “How much will it cost to put solar panels on my roof?” That’s a more complicated question to answer, but I’ll explain in more detail and provide some useful perspective on that in the article below.

How Much Do Solar Panels Cost Today?

Solar panels themselves are now a global product. There’s tremendous variation in the cost of solar panels based on the type and efficiency of the solar panels. However, the type of panels used for residential solar installations is quite standard and the costs are basically set globally. That cost has fallen tremendously within the past few years — they’re now about half the price they were in 2008, and about 100 times lower than they were back in 1977. The latest US Solar Market Insight report (from Q3) put the price at $0.70/watt. A report from REC Solar shows that the price in Q2 as a bit higher — about $0.73/watt. Still, the price is very low compared to 2008 or 2009, and insanely low compared to 2000.

How Much Do Solar Panels Cost… On My Roof?

But when you ask “How much do solar panels cost?,” what I think you really want to know is how much it costs to put solar panels on your roof, right?

The bulk of the price of going solar is now the “soft costs” (installation, permitting, etc.) rather than the solar panel cost. Again referencing the latest US Solar Market Insight report, the average installed cost of a residential solar panel system was $4.72/watt. However, prices vary tremendously by region. “Common residential system prices ranged from less than $3.00/W to just above $7.00/W,” the Solar Energy Industries Association writes. The total price of a system, of course, varies tremendously based on the size of your roof and your electricity needs.

So, the key is really just to get an initial quote and then get a closer look at your situation from a local installer, who can give you a more specific quote.

How Much Does It Cost To Go Solar? & How Much Will I Save?

But when it comes down to it, what you probably really need to know is how much it will cost you to actually go solar. And a related question would be how much you will save in the long run.

In many places now, you can go solar for $0 or close to $0 down through solar leasing companies or through simple bank loans. Then you’re just paying monthly payments like you would on a house, car, or college loan. However, in this case, your payments are likely to be less than the amount of money you’re saving on your electricity bill. So, really, you’re not paying any more than you’re already paying for electricity… you’re saving money!

solar power savings How Much Do Solar Panels Cost?

Studies have found that the average solar homeowner will save about $20,000 over 20 years from going solar. In three of the four most populous states in the country, that 20-year total is actually $30,000In Hawaii, it’s up above $60,000! And that’s just the average.

But, again, the financing options and the savings really depend on where you live and some personal circumstances (like how much you’re spending on electricity right now). So, what you really need to do is get a solar quote if you’re interested in finding out how much solar panels cost for you.

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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.



  • Frank T

    I am a bit confused on how to calculate the Return on Investment…

    Say I’m planning to use:

    35x of Yingli’s Panda 270W module which costs $448.4 per panel ($15,696.45 for all 35 panels), Which will be rated as a 9.8KW (STC) system or 6.8145KW at NOCT ( http://store.energymatters.com.au/yl270c-30b ). 1 year at 98% of the minimal rated power output, 10 years at 92% of the minimal rated power output, 25 years at 82% of the minimal rated power output.

    Additional info from my calculations:

    NOCT Pmax: 119.19W/m2

    Fill Factor: 77.66% @ NOCT, 76.4% @ STC

    Solar Cell Efficiency based on VocIscFF/Pin at NOCT: 7.6854% (Does this mean my actual module efficiency will be lower once the cell temperature hits the nominal 46C?)

    The reason why I choose 35 panels at NOCT is due to the amount of power I use, which is around 30.1kWh per day. I live in Southern California, Rowland Heights, 91748 to be specific. The solar insolation levels in LA (I’m assuming mine is the same) is 5.4KWh/m2/day. With 5 hours of peak sunlight every day. The cost of electricity being $0.215/Kwh during May 2014

    Based on the 2014 Q1 average US Average Residential System Price of $4.56 per Watt, the modules will cost roughly 16.8% of the entire system, so the total cost being $44,688 minus the 30% tax incentives equalling $31,281.6 for the entire system.

    Given those conditions…what is the best way to accurately calculate the amount of years it’ll take to break even and start generating profits?

  • Bob_Wallace

    The AU market is more mature. With AU’s very expensive electricity there was much more incentive to install solar. That created a large market and strong installation companies.

    Electricity in the US is not nearly as expensive and people in many markets don’t save nearly as much by installing solar. We’re just now seeing real competition in the installation business and our prices should come down fairly quickly.

    A lot of the cost of a solar system in the US is “customer acquisition”. Many people have to be sold. In places like Germany where solar is more popular customers call up and order a system,

    Another US cost is paperwork and inspections. Many of our local building departments are not yet efficient when it comes to permitting a solar system.

  • Bullfrog

    I got a quote for my 2,000 square foot house in the Dallas area and it was $85,000 installed. Financed over 30 years that comes out to $509/month. My electric bill is about $140/month on average. So over 30 years solar would cost over $100,000 more than electricity from the grid (gas, coal, wind).

    That’s WITHOUT subsidies. All the articles include the subsidies but I’m less interested in what will it cots ME as how much will it cost US. Somebody has to pay those subsidies, right? That “hidden” cost comes directly out of our paychecks in the form of federal and state taxes.

    Just FYI, for those that care about cost after subsidies, my $85K price tag was reduced to $48K with federal and local subsidies. Still over $250/month on a 30-year loan. But I refuse subsidies on principle.

    • Bob_Wallace

      $85k for how many watts of panels?

      What principle would cause someone to not take advantage of subsides?

      After all, those subsidies were created as a way to bring down the cost of solar so that it became affordable for all.

      If subsidies make solar affordable (seemingly not in your case) then by accepting them and installing solar you help others by helping to build and mature the solar industry.

      • Bullfrog

        You realize subsidies are real costs, in full, right? The principle of not taking subsidies is not having my neighbors pay for my power consumption. And the economic principle of cost analysis. Hiding the cost doesn’t make it cost effective, except to the person taking the subsidy. It raises the cost to society overall. Those are solid principles.

        • Bob_Wallace

          Your neighbors aren’t paying for your power consumption. They are investing in cheaper electricity for all.

          The way we get the price of solar systems down is to build the industry and that means that we have to help some people afford a system. As more are installed the industry becomes stronger and more efficient. And cheaper.

          $85k for a 10kW system is a joke. A very bad joke.

          US average (non-subsidized) price at the end of 2013 was $4.59/watt. $45,900 for a 10kW system.

          $32,130 after the federal 30% subsidy.

          • Bullfrog

            Sorry Bob but you sound like a salesman. My experience trying to go PV is that its more expensive by about $400/month compared to my regular electric bill. I appreciate your enthusiasm for solar though. I’d love to have panels on my house providing free renewable energy.

          • Bob_Wallace

            Bullfrog – I can assure you that I’m not a salesman in the sense that I work for a company and make money by getting people to purchase stuff.
            I am a salesman in the sense that I’m very concerned about the future of our planet, about what we’re doing to our children’s and grandchildren’s lives and do what I can to move us away from fossil fuels. I’m hawking a better future.

            The prices you have been quoted for solar are very much higher than the national average. The price I gave you is from Greentech Media which has a major research division. And their numbers are very close to the prices produced by other organizations.

            There are a few places in the country where solar is very high, perhaps you live in one of those. Places where the industry is very underdeveloped and there’s not enough competition to bring prices down.

            I’d suggest you shop a bit harder.

            And I’d suggest you rethink subsidies. We, taxpayers, subsidize all sorts of emerging technologies. The money generally goes to companies, not individuals, so we’re not so used to seeing them up close and personal. Let’s take a look at energy subsidies…

            Over the first 15 years of these energy sources’ subsidies, oil and gas got 5 times what renewables got (in 2010 dollars) and nuclear energy got 10 times as much. (Most of the renewable subsidies went to corn farms for ethanol, not wind, solar and other renewable electricity technologies.)
            Between 1918 and 2009 oil and gas received average annual subsidies of $4.86 billion. (92 x $4.86 billion = $447 billion)

            Between 1947 and 1999 nuclear received average annual subsidies of $3.50 billion. (53 x $3.50 billion = $185.6 billion)

            Between 1980 and 2009 biofuel received average annual subsidies of $1.08 billion. (29 x $1.08 billion = $31 billion)

            Between 1994 and 2009 renewables received average annual subsidies of $0.37 billion. (15 x $0.37 = $5.6 billion)
            http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf
            Now, it’s not clear that the subsidies for oil, gas and nuclear have done us all that much good. Their prices keep rising. Perhaps subsidies kept prices from rising faster and higher.

            But the subsidies that renewables have received have been wildly successful. Thirty years ago wind-electricity was $0.38/kWh – it’s now less than $0.05/kWh. Thirty years ago solar panels were around $100/watt – now they are less than $1/watt.

            You, as an individual, are in a better position than are many Americans. You’ve got either the capital or the credit to install solar on your house. With a subsidy (and finding a better price) you can put panels on your roof and pay less per month for your electricity.

            If a lot of people in your position install solar then the price will come down and people who are less well off can also afford a system.

            Right now our residential solar price is averaging $3.59/watt. Rooftop solar is being installed in the UK, Germany and Australia for around $2/watt. We’ve got some cost cutting to do and that will take more people installing and building the industry.

    • Me Oh My

      They’re trying to cheat you. Get 2 more bids.

      • DallasTexas

      • Bullfrog

        Nope. That’s what they cost. I’ll get another bid but don’t expect it to be any different. You realize this is cost WITHOUT subsidy, right?

      • Bullfrog

        I just checked another site, Home & Garden TV and they quote a 13kW system in LA having a pre-subsidy cost of $94K which is right in line with the quote I have, mine is a little less. Articles like the one above are not honest. If so everyone would have these systems on their roof. I want one but its too expensive.

        • Bob_Wallace

          $7.23/watt in LA? Something is very stinky.

          LA as Los Angeles or as in Louisiana? If SoCal you should be finding installers at or below the national average of $4.59/watt. There’s a community group in the area that was doing group buys and installing for (IIRC) under $3/W.

          • Me Oh My

            My neighbors in Los Angeles just had panels done – 1 by SolarCity and the other by SunPower.

            Both were a bit over $4 before tax credits. 20 panels and 24 panels.

    • Techngro

      I assume you pay a decent amount in taxes every year. I think you should see the subsidy as a way of getting back some of your hard earned money.

      Look at it this way. There are plenty of people who don’t pay taxes at all and get subsidies in the form of social services (welfare, section 8, etc.). So I don’t think you should feel bad, as a person who actually pays taxes, in getting a tax break or subsidy to save yourself some money in the long term.

  • james braselton

    hi there i found some solar power that can provide 15 kw too 51 kw expenceive

  • whammami

    I was a bit disappointed in the beginning to see that the Author Mr Shahan did mention only the cost of the installation and not the cost of the Panel. He did mention the savings ranging from 10k to 60k but we really don’t have a clear picture on really how can a panel go for with what efficiency. The title did not reach its objective.

  • mearme

    are solar panels available for business property. if so, are there tax rebates?

  • Dave Nantz

    If you lease the system you lose the tax deduction

    • Bob_Wallace

      The subsidy goes to the owner/leasing company. That lets them offer you a cheaper lease price.

  • disqus_l4zSoQqrpI

    Seems like in the U.S. all the barriers to going solar exist past the hardware.

    • Bob_Wallace

      Yes, we’ve got two areas where savings could be made. One is “customer acquisition”, the amount spent on selling the product. We’re still in a situation in the US where solar has to be sold. It’s cheap enough in places like Germany and Australia that people call up and ask to buy.

      Another is permitting costs. We (depending on the location) require a lot more paperwork and inspections than are required in less expensive places.
      Customer acquisition costs will go down as demand grows. Permitting costs are being addressed and some states have already cut costs

  • pvcalc

    In order to get a quite good idea of the financial aspects of an installation see for example the calculator http://pvcalc.org/pvcalc . It’s sophisticated enough to be used for valuation of solar power installations.

  • fudfighter

    The real question is “Is it worth switching to solar generated power?” The answer depends greatly on your situation, economically, geographically, and politically. It’s still a significant up-front investment, whether that comes out of your own pocket or you find a bank that may, possibly, with much convincing, lend it to you. The payback period – more accurately, the break-even point – or how long will it take to recuperate the cost of ownership, varies extremely. In sunny climates where electricity prices are rising, switching to solar basically locks in your electricity price and the system can pay for itself in a few years. But if you’re still connected, i.e. a grid-tied system, your utility company may charge you more for using less, unless they have buy-back agreement, which most in my area do not. Also with grid-tied, if the grid goes out, you can’t use your array anyway, unless you have a means of completely isolating it from utility power.
    So, is it worth switching? Although the price of the components have dropped over the years, this is still a very complicated question.

    • http://zacharyshahan.com/ Zachary Shahan
    • Tony Reyes

      SMA has inverters that lets you use some of the power your array is generating (1500 Watts) even when the grid goes down. There is a physical switch on the inverter that lets you isolate your home from the grid while still complying with NEC code safety requirements. Surprisingly, the cost of the inverter is nearly the same as a standard inverter. I expect this feature to become standard across all residential inverters soons.

    • Jim Seko

      I live in St. Louis which has 75% as much Sun hours as Los Angeles. The cost of our mostly coal supplied electricity is low. The local solar installers know they must install at a lower cost and manage to beat the US average installed cost by wide margin. It also helps that Ameren Missouri pays $1.50 per Watt in addition to the federal 30% tax credit. Most Ameren customers are not aware of these rebates and tax credits which will expire 12/31/2016. I commend Zachary Shahan for writing this article because informing the public about money saving solutions to climate change is super important. The best way to see what you can save in dollars is to get a few quotes.

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