How much does it cost to set up solar panels

Between professional labor and materials, you will pay anywhere from $4,500 to $50,000 to install solar panels on your home. Most homeowners pay an average of $25,952 on the costs of installing solar panels.

Home energy technology is evolving so quickly that we're watching the design and costs of installing solar panels change in real time. After the recent extension of the Solar Investment Tax Credit (ITC), homeowners can take a 30% tax credit for solar panel installation until 2032. Add the savings from your electric bill, and you can significantly offset the solar panel cost for your home.

Solar Panel Cost Factors

The cost to install solar panels roughly breaks down into:

• 50% materials

• 25% labor and permits

• 25% maintenance and overhead

Where you live, the type of solar technology you choose, and the number of watts you need to power your home will all play a factor.

Type of Panel

There are three main factors to consider when choosing the type and cost of solar panels: efficiency, life expectancy, and design. The design will dictate how much space the panels will take up on your home and whether they are flexible enough to attach to different types of structures. All in all, each of these factors will help you balance upfront vs. long-term costs.

Let's take a look at the three major players. Keep in mind that the following solar panel prices only include material costs.

Monocrystalline

Featuring high-purity silicon cut into wafer-like panels, you can expect top performance from monocrystalline panels—AKA "mono" panels—without needing a ton of space. The solar panels cost $1 to $1.50 per watt.  The American Solar Energy Society (ASES) notes that mono panels have an average lifespan of up to 40 years.

Polycrystalline

As the top competitor of mono panels, polycrystalline cells—which are made of melted and molded silicon—are a bit less energy efficient but take up about the same amount of space. The solar panels will cost $0.70 to $1 per watt with a lifespan of 25 to 30 years, according to ASES.

Thin Film

Thin film solar panels are the most flexible option today, mounting to glass and metal of varying shapes and angles. They can also tolerate higher heat, making them an excellent option for warmer climates. Expect to pay $1 and $1.50 per watt, but a bit more in the long run. ASES notes that thin film panels last just 10 to 20 years and come with a shorter warranty.

Labor

Budget $0.50 per watt for labor when installing solar panels professionally. The number does not include permits or the cost of additional technology such as special mounts, tiles, or shingles. Labor will also vary widely depending on the cost of living in your area, availability of materials, and local incentives—but we'll dive into these more below.

Per Watt

Between the cost of materials and labor, you will pay between $2.50 and $3.50 per watt for solar panel installation. 

The number of watts necessary for your solar panel system varies widely. While the average home will require around 6kW—or 6,000 watts—the number required for your home will depend on:

• The amount of direct sun on your home

• Your local climate

• The structure of your home  

The return on investment will also depend on local tax incentives and local utility prices—as you will almost always need to stay connected to the grid to offset energy usage.

Location

If you live in a cloudy New England town, there's no question why you may pay a bit more than a sun-soaked area of Arizona. As we mentioned earlier, the cost of labor and local incentives—even at the county level—will contribute to how much you'll pay out of pocket for solar installation.

For example, here are average solar panel installation prices for a 5kW system in each region:

• Midwest, Southwest, West: $15,000–$17,500

• New England: $16,500–$18,200

• South: $15,000–$17,000

• Mid-Atlantic: $15,800–$17,800

The roof's pitch and access to your solar panel installation area can also affect the installation price. You may have higher labor rates if workers need special equipment to access a steep or tree-covered site.

Mount Type

Curious how your solar panels will catch the maximum amount of sun? Panels come with mounting equipment that either stays in place or can rotate to catch the most rays. The more advanced the technology, the higher the upfront cost.

• Fixed mounts: These mounts stay put, so are ideal for areas with constant sun from all angles. You'll pay $10 to $15 a piece for fixed mounts.

• Adjustable mounts: Shift your solar panels in the winter or on cloudy days to grab the most sunlight for maximum efficiency. Adjustable models will cost about $50 per mount.

• Tracking: The most high-tech mounts will cost between $500 and upwards of $3,000 per mount. The mounts can self-track the sunlight, leading to up to 45% more energy production.

Other Materials

You cannot have a functional solar panel system without an inverter. According to Energy.gov, the inverter converts direct current electricity to alternative electricity for our homes. An inverter comprises about 10% of the total cost, often around $1,500.

Additional materials, such as wiring and a standard storage battery, are often grouped with the package price unless you opt for add-on services that we'll touch on below.

Permits and Inspections

Depending on your area, you may need to acquire a building permit and have an inspection completed before completion. Permits and inspections will add an average of $450 to the solar panel costs.

Additional Costs to Consider

You'll pay about $700 for the cost of repairing your solar panels, but this vastly ranges depending on the size of the repair. Basic maintenance, such as cleaning your solar panels, will cost between $10 and $20 per panel. On the other hand, a cracked panel can cost up to $450. This overhead cost will range depending on your local climate and the severity of seasonal storms.

Cost to Install Solar Panels Yourself

Photo: anatoliy_gleb / iStock / Getty Images

You will find DIY solar panel installation kits for between $1 to $2 per watt, just a bit under what it costs in total to hire a professional solar panel installer. Keep in mind that you will still likely need to pay for a building permit and inspection costs depending on your local town's laws. Also, hiring the best solar panel team can save you money in the long run. The experts will know how to place the panels as well as the best tools for your design.

Cost of Common Solar Panel Add-Ons

As is the case with any emerging technology, there are plenty of ways to get a bit fancy, and thus increase the cost of solar panels for your home. Here are two common options.

Shingles and Tiles

Solar panel shingles of tiles affix right to your room without the additional panel and wiring. They act as both a protective layer on your roof and a means of converting the sun into electricity. 

Solar tile and shingle prices are significant, though. Tesla tiles will range between $40,000 and $80,000 for materials and installation, while more basic solar tiles will cost from $23,000 to $52,000. 

Battery Storage

Additional battery storage is ideal for preventing power loss in a storm or after a long stretch without sunny skies. According to Home Advisor, the average cost of a solar panel backup battery is $10,000, but ranges from $300 to $20,000.

Ways to Save Money When Installing Solar Panels

Saving money on any energy source comes down to balancing upfront and long-term costs. In many cases, the more advanced the system, the more energy and money you'll save on bills in the future.

In other words, you may save money on energy efficiency by installing more advanced mounting systems or choosing higher-quality panels.

Credits and Tax Incentives

The best way to save money on the upfront costs of installing solar panels is to take advantage of the Solar Investment Tax Credit. As we noted above, you can write off 30% of installation costs for that tax year from your federal filing until 2032. Many states and counties offer additional credits and incentives.

Additionally, the extra power you choose not to store in a battery can be sent back to the grid. Your local utility company will compensate you for that power, but the amount will vary. You can check the Utility Rate Database to estimate how much you can expect to receive for generating excess energy.

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