Solar Panels Cost: Everything You Need to Know

To determine the price of each project, the solar installation company will look at various factors and calculate a cost per watt price. Though, as Persaud explains, the consumer’s final price is largely determined by their energy usage. “You’ll get a solar estimate based on your past electric bill,” she explains. If your bill tends to be higher because you use more energy, the system will require more panels in order to meet your energy needs. Likewise, if your bill skews lower, you likely won’t need as big of a system, hence the lower price point.

“If you’ve got a really small house, but a really big electric bill, your roof might not be big enough to fit all the panels so you might need ground-mounted panels,” explains Persaud of the various systems that could be installed. “Or you might have a gigantic house and a really small monthly electric bill, which doesn’t usually happen, but in that case you might not need to cover your roof and panels, you might only need 10, for example.”

What impacts a solar panel quote?

White points to a site called Energy Sage, which allows homeowners to compare quotes from various different solar providers in the area. However, it begs the question why quotes can vary so much between companies for—generally—the same type of solution. Consider the following factors that impact the price a company may offer. “I like to think of it as different layers that go into the final amount,” explains Persaud.

Product

The first “layer” of a quote tends to be the product itself. There are many different brands of solar panels on the market and they cost different amounts. “Some are on the lower end and some tend to be much more expensive,” explains Persaud. The price difference often comes down to the efficiency of the panel—that is, what percentage of sun rays that hit the panel are converted into usable energy. The best solar panels typically have the highest efficiency rate. “SunPower makes one of the most expensive panels on the market, but their efficiency is 22%, which might sound low but is actually very high in the solar industry,” Persaud adds. “So a SunPower quote might be closer to $4 per watt.”

Size of system

The size of a solar system also greatly impacts the system cost. Logically, a larger system that requires more panels will typically cost more than a smaller system.

Installation requirements

The installation site will also impact the cost of a solar energy system. “Do you need extra wiring because you want the solar panels on your garage, but your meter is in your basement? That could be an extra $2,000 to wire it all the way down,” Persaud says. “Do you want the wire hidden, so you have to dig a trench? It’s stuff like that that comes up often for customers.”

Location

When looking at the average price of solar energy, it’s also important to consider the location and state where the system is installed. “I live in Vermont where there isn’t a lot of red tape when it comes to solar,” White says. “So our costs tend to be a little lower compared to a state like Massachusetts or New York where there’s a lot of permitting and other processes that add to the cost of the system.”

Additional factors impacting solar panel cost

Other factors that can determine solar panel installation costs include labor costs, competition in the market, and “add-ons” to the system, such as solar batteries.

Financial benefits of solar power