A lot of people ultimately decide to go solar because the math works out over the long term. But to figure that out, you must first determine what your system should cost up front.
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The answer to that question: It’s complicated, and it depends.
When Larry Gawel and his wife installed solar at their Lincoln, Nebraska, home in , the system cost about $18,000. The system has since provided for almost all their electrical needs, including heating and cooling. Recently their retirement planner asked for a summary of their utility bills and assumed that the figure they gave him was per month. “I told him no, that’s an entire year,” Gawel said.
At the other end of the range is the Central Florida home of Erik Erickson, Wirecutter’s director of platform engineering. To manage hurricane threats and routine power outages, Erik has specced out a slightly oversize solar array coupled to four backup batteries. Capable of powering the home if the grid goes down for a week or more, the system will come in at about $68,000.
The average price falls somewhere in between. The median price of a US residential solar installation was $4.20 per watt in (down from $14 in ), and such a system produced 7.2 kilowatts, according to a report from the Lawrence Berkeley National Laboratory (PDF). (That number skews low because California installs the most residential systems, but they’re relatively small; other states average above 8 kilowatts.) That works out to a total cost of about $30,240.
EnergySage, a “solar matchmaker” whose expertise we’ve highlighted before, has a detailed chart of state-by-state average costs that may give you a rough idea of what to expect for your home. Just be aware that the results shown there are limited to an average system size installed in that state, which may not match your own needs, and the figures are lower by about 25% than the numbers in the Lawrence Berkeley National Laboratory report. In part, this is because EnergySage factors in savings that you can get only if you use EnergySage to connect with contractors in your area.
The federal government will subsidize 30% of the cost of your solar project — but only if you complete it by the end of .
The Inflation Reduction Act of made several important changes to how federal solar tax credits worked. For one, it extended the credits until , allowing homeowners to fit installation into their long-term financial plans. It also raised the tax rebate to 30% of the total cost of installation until , after which it would tail off to 26% and 22% the next two years. There was no cap to the installation cost, either — whether you paid $10,000 or $100,000 for your solar project, you’d get the full value of the credit.
But Congress has drastically curtailed the program under the One Big Beautiful Bill Act of . The act, passed by Congress and signed by President Trump, ends the residential tax credit “for any expenditures after the date” of December 31, . Effectively, the entire residential solar subsidy is eliminated after that.
“Losing the 30% tax credit will result in systems costing about $9,000 more on average,” said Emily Walker, director of content and insights at EnergySage. As a result, “our best guidance right now is just to have an installation done by the end of this year.”
Walker also warned that a rush on installations could exacerbate existing shortages in solar equipment, a view echoed by Joe Lipari, vice president of projects at Brooklyn SolarWorks.
Uncertainty over tariffs has already created “a classic supply-and-demand problem,” Lipari said. “If there’s concerns about getting materials, then everyone gets what they think they can get, which puts great demand on them, so it’s harder to get those things.”
Lipari believes that established solar installers will adapt and survive if the solar tax credit goes away, “but there’s also a good segment that’s like, ‘let’s make a dollar where we can, and then on January 1st, it’s not our problem anymore — we’ll do something else.’” That could leave their customers without support or remedy if their systems encounter a problem.
We strongly recommend working with an established local installer, rather than a large national firm, whose business models, as detailed by Alana Semuels in Time, tend to prioritize sales over service. (In Semuels’s words, “National solar companies essentially became finance companies that happened to sell solar.”) Tellingly, the first of the “40 Questions to Ask an Installer” suggested by the nonprofit American Solar Energy Society are “What year was your company established?” and “Where are its offices?”
Many states, municipalities, and utilities have their own incentive programs that will further reduce your costs, often significantly. For example, Wirecutter editor-in-chief Ben Frumin got an additional 19% of his solar installation subsidized by New York programs.
DSIRE, the Database of State Incentives for Renewables & Efficiency, makes it easy to find programs in your area using just your zip code. California, Minnesota, New York, and Texas have more than 100, and most states have at least several dozen. You still have to read through the descriptions of the individual programs to find those that apply to you (some have qualifying restrictions, such as income level), but having all of them gathered in one place for research purposes is a big help.
Any contractors you speak with should also be familiar with the programs you likely qualify for—after all, it’s in their own self-interest to help bring you to the decision to go solar—and if they are not, consider that a warning flag. Confirm that the contractors are authorized to submit proof-of-work statements to the utilities and agencies that handle the incentive programs, as well, since you’ll need that for your claims.
Installers may offer rates that are lower than banks’ too, which will lower your monthly payments, though likely not your total outlay.
“We try to make sure that we are very transparent with the customers as to what that looks like,” said J.W. Peters, co-founder of Solar Power of Oklahoma, one of the state’s oldest installers. “We have some options that are a 25-year loan at a 4.9% interest. But that loan product actually costs us more money to be able to offer to that homeowner. And so therefore, our cost estimate adjusts our baseline costs to adjust for that as well.”
You may find that it makes sense to put up some of the payment in cash. Wirecutter’s Erik Erickson carefully considered his options when working out the cost for his system. Eliminating his family’s monthly $415 electricity bill was a top priority, and “basically I’m getting down to $415 a month [in finance payments] if I put $7,000 down on top,” he said, “which is a chunk of change and was one of the biggest reasons I took a month to deliberate, because this doesn’t pencil out without extra money down.”
In the long run, it almost certainly will.
The tax credit is effectively a direct price cut on the cost of going solar. But solar installations also generally pay for themselves over time, through a combination of lowering your electricity bills and a process known as net metering.
Unless you plan to install storage batteries, even after going solar you’ll use power from the electrical grid at night, when your solar panels are producing nothing. And in high-demand periods—often summer or winter, when you’re cooling or heating your home, respectively—you may draw some electricity from the grid during the daytime, too.
Usually, you’ll still get a bill from your utility every month.
But much of the time, your system will produce more electricity than you need—weekdays when nobody is at home, for example, or shoulder months like March or April, when your area has a ton of sunlight and you’re not blasting your electricity-sucking air conditioner.
That excess power will go back onto the grid for other customers to use, and your utility will give you credit for the value of that power on your next billing cycle. That’s net metering, and with a well-designed system it means you’ll wind up paying very little for your electricity over the course of a year.
Over time, the money you save will more than cover the cost of the system and any loan interest.
However, it’s important to know how your utility calculates net metering, because that’s key to figuring out how fast you’ll see a return on your solar investment.
Knowing who provides your power and how the utility’s net metering works will make you a shrewder judge of contractors when you’re seeking bids.
Who provides the home’s electricity is one of the first questions Solar Power of Oklahoma’s J.W. Peters asks of prospective customers. Like most states, Peters explained, Oklahoma is served by a mix of publicly owned utilities, municipally owned utilities, and member-owned cooperatives. They use different net metering rates and credit structures—and some don’t offer net metering, period.
“We need to know who they have so I can figure that into the calculations,” Peters said. “We’ve seen a lot of kind [of] fly-by-night, door-to-door-salesman-type people coming in and knocking on doors in neighborhoods that know nothing about the utility structure in that area. They’re selling people systems, and in some cases even installing them, under false pretenses of what that system will do for those customers.” In the worst cases, he said, people have had solar installed, only to learn that they are not allowed to connect to the grid at all—so when the sun goes down, their home doesn’t have electricity.
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Tom Broderick of Flagstaff, Arizona, talked to four installers when he was going solar in . “One of them knew what he was talking about—one,” he said. “Some of them said some really dumb things, and I didn’t call them on it, because I wanted to give them the opportunity to say more dumb things and find out what they really knew and what they really didn’t.”
Think like him. Understand your utility’s net metering program before seeking bids, and as Broderick emphasized, “Look at multiple installers. Get references. Check their business record with the Better Business Bureau. How long have they been in business? Are they certified?” Ideally that would mean certified by NABCEP, the North American Board of Certified Energy Practitioners.
Anyone researching this topic has likely stumbled upon some free online cost estimators, such as EnergySage’s tool.
Through that estimator, EnergySage calculates your potential lifetime savings from going solar based on your address and current monthly electricity bills, after which it solicits free bids from licensed and vetted solar contractors.
Another estimator, the National Renewable Energy Laboratory’s PVWatts, calculates your potential solar-energy production based on your address and roof size.
There’s also DSIRE, the Database of State Incentives for Renewables & Efficiency, which lists potential sources of low-interest loans, rebates, and other incentives for going solar based on your zip code.
Such cost estimators certainly help. But the reality is that to truly get a sense of the cost and value, you have to decide what you want solar to do for you—what you value most among the many benefits it can bring—and then work within your means to get a system that meets your needs.
Absolutely.
You can do a lot of things to lower your energy bills and carbon footprint that, happily, cost much less than a solar installation.
Consider community solar. You effectively pay for panels that are installed at a solar-production facility. They supply electricity to the grid at large, and you get a credit on your energy bill, much as you would with a system you installed at your house, but the household disruption and soft costs are eliminated.
Community solar is expanding rapidly, with annual growth more than doubling nationwide every year since . “Community solar has been a major driver of opening market access for folks, particularly people for whom residential solar isn’t financially or logistically feasible,” said Gilbert Michaud, assistant professor of environmental policy at Loyola University Chicago and policy division chair of the American Solar Energy Society.
At the end of , the baseline year of the most recent National Renewable Energy Laboratory report (PDF), community solar facilities totalling more than 6 gigawatts of capacity had been installed in 43 states and Washington, DC, with a third of that capacity installed in alone.
However, the distribution of community solar is uneven, with four states—Florida, New York, Minnesota, and Massachusetts—accounting for 75% of it (in terms of wattage) and the top 10 states accounting for more than 90%. Depending on where you live, you may have to do some legwork to find a local project to invest in.
Finally, and for older homes especially, relatively inexpensive upgrades to things like insulation and weather sealing can lower utility bills substantially. We cover many of the options in detail in our guide to home weatherizing.
When I spoke with Iain Walker of Lawrence Berkeley National Laboratory in , he brought up a way of thinking about green technology that stuck with me.
There are dollar savings to consider, he said, and there are carbon savings—and sometimes the two don’t quite add up. A new induction stove would cost him considerably more in electricity each month than his old stove would cost him in gas, he said by way of an example. But its carbon footprint would be much lower, and that in itself is valuable to him.
Homeowner Tom Broderick told us, “[My] motivation is mainly climate change and doing something about it at my personal level,” but “it did matter that through my retirement, my costs would be lower for electricity.”
Homeowner Larry Gawel is pleased that he’s saving money and emissions at the same time: “Both of them are important to me.”
Wirecutter’s Erik Erickson plans to add an EV charger (and an EV) to his system, but “in a few years, after this is all through, because this is the most expensive project we’ve ever done.”
For homeowner Tom Lee, the initial decision to go solar—in Los Angeles, back in —was basically a dollars-and-cents matter. He was already doing a major home renovation, so it was a sensible time to get the installation done. The system was not cheap, at around $60,000, but “this house was going to be my forever house, so I figured it’s a good idea, right?” he said. “Especially with all this money coming back to me [from rebates and utility savings].”
But as time and technology moved forward 15 years, so did his appreciation for what he’d done. “I feel proud that I’m a solar owner,” he said.
This article was edited by Harry Sawyers and Ben Frumin.
Choosing whether to invest in a rooftop solar power system for your home or business is a big decision. Solar energy is one of the most popular forms of renewable energy in the electricity mix here in WA. In fact, 36% of customers in the South West Interconnected System (or SWIS) already have a rooftop solar installation.
Each rooftop solar power system represents a distributed energy resource. Along with household batteries, electric vehicles, and other are smaller-scale energy resources that connect to the energy system, they are also known as household energy assets. They either use, generate or store electricity – and the WA Government has published a DER Roadmap outlining a framework to make the most of these resources.
There are many questions to ask when considering a rooftop solar power system, so if you’ve been thinking about investing in solar panels for your home or business, here are five things you should know.
Having a rooftop solar power system could be one way to reduce your home or business electricity bills, but it does involve a significant upfront investment. According to the Clean Energy Council (CEC), the average cost for an average size home system (5.5kW) can range from $3,500 up to $9,500 and larger systems can cost anywhere up to $15,000. The upfront cost will depend on a range of factors, including the system size and brand of rooftop solar panels and solar inverters used.
When you’re deciding if a rooftop solar power system is a good option for you, you should look at how and when you use electricity at your home or business. Remember, solar power is only generated during the day when the sun is shining and the amount of electricity your rooftop solar installation could generate will depend on your system size.
If you use a lot more electricity than your rooftop solar power system can generate, or if the majority of your electricity usage generally happens at night and you can’t shift your electricity usage habits – then you should consider carefully whether rooftop solar panels is a good option for you. If you’re considering solar for your home, you might be better off taking advantage of a Time of Use tariff . If you’re considering solar for your business, you may be able to support renewable energy for business in other ways.
If you can make the most of the solar electricity generated by a rooftop solar power system, it could be a great investment in your home or business. Using electricity generated by your solar installation could help to reduce your electricity bills, as you’re likely to be drawing less electricity from the energy system (formerly known as the grid). Further, since the electricity mix from the energy system includes both renewable and non-renewable sources, using electricity generated by your rooftop solar power system is also a way you could reduce your emissions.
When you are looking at what to consider when buying solar panels, it’s important to choose your solar supplier and installer carefully. To start with, be wary of any company who promises ‘zero electricity bills’ in the future. Daily supply charges for connection to the energy system will still be payable as well as charges for any electricity usage charges for any electricity you need to draw from the energy system and you will still need to power your Wi-Fi, lights and alarms when the sun isn’t shining.
Here are some other things to think about when you’re looking for a quote for a rooftop solar power system:
If you’re considering investing in a commercial solar system for your business electricity needs, here are some tips to help you choose the right solar installation company.
Rooftop solar power systems catch that famous WA sunshine and use solar inverters to transform the solar energy into electricity that can be used to power your home, business and even electric vehicles.
As a whole, your solar PV system is made up of:
Your solar system might also have a consumption monitoring feature accessible with a mobile application that measures how much electricity your solar panels are producing and how much electricity you are drawing from the energy system. Not every rooftop solar power system will include a consumption monitoring feature – but if your system does, monitoring your solar power output and use can help you to make the most of your rooftop solar power system. You can also use Synergy My Account to see how much you’re drawing from the energy system.
You could also consider investing in a battery storage system to help make the most of any excess solar power your rooftop solar power system produces during the day. Rather than exporting solar power to the energy system, excess solar power could be stored in your battery to help power your home or business when the sun goes down, or on cloudy days.
Your solar panels should be positioned on the roof of your home or business where they will have the most exposure to the sun. Depending on the space available, the location of your home or business and any shading on your rooftop, your solar panels could even be mounted at an angle to maximise sun exposure.
Your solar panel supplier and installer should consider your electricity needs at different times of the day when considering where to place your solar panels. For example, more solar power will be generated in the morning from east-facing solar panels, in the middle of the day from north-facing solar panels and in the afternoon from west-facing solar panels.
If you’re building or renovating your home, you might like to consider how your home design could help you to make the most of solar energy.
When you’re exploring the different elements of a rooftop solar power system, remember that the biggest system with the most solar panels is not always the best option. Exporting solar power to the energy system used to be a high priority for solar customers – but it’s now known that the real benefit of a rooftop solar power system is using as much of the solar power your system generates as possible. This reduces the amount of electricity you may need to buy from the energy system, which could help to reduce your electricity costs.
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