What is the Average Cost of Solar Panels?

The average price per watt of solar panels in the spring of 2023, excluding financing, was $3.30. This price includes both hard and soft expenditures, such as hardware and equipment, installation labor, and any necessary permits.

This cost information originates from the Solar Energy Industries Association (SEIA) and Wood Mackenzie Power & Renewables’ March 2023 Report.

In conclusion, contrary to what the internet may suggest, there is no fixed price for a solar panel system. In reality, the cost of your system will be unique to your circumstances and will depend on a number of factors that each solar installation company accounts for differently, such as:

Your energy consumption and electric expenses

System dimension and performance

Solar panel manufacturer and model

Your location in the United States.

Tax credits, incentives, and solar rebates that qualify

Local permit and utility specifications

the structure and condition of your roof

Now, in the first two paragraphs, we introduced numerous concepts: price per watt, incentives, hard costs, and soft costs. It can be difficult to process. In the remainder of this article, we will dissect these concepts and key terms so that you can comprehend them better. We will also provide a state-by-state average savings amount to give you a clearer idea of how much money you could potentially save on monthly costs if you decide to go solar.

Visit our solar panel cost calculator if you’re set to estimate your expenses. Using Mapdwell’s proprietary technology, we evaluate the solar potential of your roof and provide you with a preliminary system size recommendation, as well as cost and savings estimates.

How Typically Are Solar Energy Systems Priced?

There are numerous methods in which solar companies split the cost of solar panels. These are the three most popular:

Gross expenditure

cost per watt

Price per panel

Gross cost is, in our opinion, the most comprehensive method for pricing solar panels. Let’s first explain why, then examine each pricing model in depth.

Gross Cost

To ensure that you can safely switch on your solar power system, much more is required than simply attaching solar panels to your roof. Before applying financial incentives such as the Federal Solar Tax Credit, the gross or total cost of solar panels will typically include everything required to legally switch on your system.

Yes, that is correct. You cannot legally install or power on your system without permission from the “authorities having jurisdiction” (AHJs) in your area, which are typically government entities. Local building departments and utility companies may also require permission, although the specifics will differ by location. If your property is governed by a homeowners association or HOA, additional approvals may be necessary.

Infrequently mentioned but necessary for the successful installation of your solar panel system are the following:

System architecture and engineering

Equipment and apparatus (e.g. module, inverter, racking, and electrical wiring)

Authorization and examinations

Cost of installation and labor

At Palmetto, we include these costs in our solar estimate so that you can better comprehend what is required to begin generating electricity with your solar panels.

Cost per Watt

Although we prefer to use average cost as our metric, we cannot overlook the significance of price per watt. Price Per Watt, or PPW, is dependent on the maximum power output of a solar energy system and is expressed as a dollar amount per watt of solar energy that the system is capable of producing.

Due to the fact that solar panels fluctuate in size and efficiency, this allows homeowners to compare costs based on system performance rather than the number of panels or roof area. PPW is calculated by dividing the total aggregate cost of a solar panel system by the system’s total wattage, or power capacity.

How do you calculate the required capacity of your solar system? This will depend on your energy consumption (which can be determined from your electricity account) and how much of that energy you wish to generate with solar panels. This is known as solar offset, or the proportion of your total energy requirements that can be met by the electricity generated by your solar panels under ideal conditions.

When determining the optimal system size, many homeowners aim for a 100 percent solar offset. This will depend on personal preference, roof specifications, and utility regulations. Utilize our free solar design and savings estimator to determine yours.

The difference between gross cost and PPW is that gross cost includes system size while PPW does not. Using PPW, you’ll be able to determine the relative value of multiple solar power system quotes that may differ in solar panel type, amperage, and other factors.

Cost per panel

Solar panel systems may also be priced by the panel. This metric is commonly used to determine the cost of do-it-yourself solar panel kits, which we may recommend for your RV or boat but not for your residence.

It is true that the price of solar panels varies by brand, model, and efficacy. Higher-efficiency panels will likely be more expensive, but fewer of them will be required to generate the same amount of energy as a larger system that employs low-efficiency panels. Due to the need to purchase more panels to produce the same quantity of electricity, you may spend even more on panels with lower efficiency.

This metric is rarely used to price residential solar energy systems because it leaves out a great deal of valuable information.

Understanding Solar’s Hard and Soft Costs

It is essential to realize that the cost of solar energy almost always consists of more than just equipment costs. It includes the costs required to implement your system and get it online. Let’s discuss real costs and soft costs to help you better comprehend them.

Costs of Solar Energy

The real costs of solar refer to the physical components of your solar panel system, such as:

Solar arrays

Solar inverter

Electrical panel

Installation and shelving

Electrical apparatus

These costs will vary depending on the solar company, as not all installers provide the same equipment.

Solar Costs Are Less

Soft costs of solar include the labor and time required to obtain the necessary permits and licenses to operate the system. This may include the following, but is not limited to:

Permission charges

Inspection charges

Fees for interconnection

Sales duties (if applicable)

Supply chain expenses.

Installation costs

Customer acquisition expenses

Transaction costs

The benefit of selecting Palmetto as our solar installer is that these services are included in the cost of our system. We work on behalf of our customers to ensure that their installations adhere to stringent quality standards and that their system has the proper operating permits.

How Much Does Leasing Solar Panels Cost?

A solar lease is a financial arrangement in which the company that installs your solar panel system retains possession, and you pay a monthly fee to use any electricity generated by the solar panels. Leasing solar reduces your utility bill and is often the best option for homeowners with confined incomes or who are not eligible for the solar tax credit.

With this arrangement, you typically do not pay any upfront costs for the residential solar installation; instead, you pay “rent” each month. For the duration of your lease, you will make this monthly payment, and the solar installer will be responsible for installation and maintenance.

To learn more about solar leases, please read our article comparing leasing versus purchasing solar panels.

How much money are solar panels able to save?

We’ve compiled a table of Palmetto customers’ median system size and median estimated total savings because savings may differ by state. Before calculating monthly savings, we categorized the data by state and forecasted savings based on the 25-year lifetime of the system.

Palmetto can calculate the cost of going solar.

Want to determine how much you could save by installing solar panels? Palmetto has mapped the solar potential of more than half of all rooftops in the United States using Mapdwell technology. Use our free solar design tool and cost estimator to visualize what your roof could look like with solar panels and to get a personalized estimate. You can start your voyage toward a future with cleaner energy today!

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