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Cost of a Solar Power System

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Solar power systems are an investment. At the beginning, the total cost may seem like a lot but over time it will continue to prove that it is capable of lowering your electricity bill and raising the value of your house. The system will pay for itself in the end and could make you a profit.

So, what is the cost of a solar power system? The average cost is around $15,000 to $40,000 for a capacity between 4kW and 8kW. This equals out to 4,000 to 8,000 watts. Although each state has a different average solar system cost.

The cost of your solar power system depends on the size that you need and how much electricity you need to use. The bigger the system you want the more it will cost because you must buy more equipment. So, is it possible to pinpoint just how much your exact Solar power system will cost?

How Much Is a Solar Power System?

A solar power system uses panels to bring in the sun’s energy, photovoltaic energy, and it’s warmth so that it can generate electricity and produce heat. Most individuals who purchase a solar power system live in rural areas, but they can be used in cities.

The size of your solar power system can range from 2 kilowatts to 25 kilowatts which is between 2000 and 25,000 watts. The price of one watt for solar panels is approx. $0.75 and when installers add $1 to $3 to their installation fee, the price can jump to $2.67 to $3.43.

There are different brands of solar panels that will have specific prices. Some solar companies can get a lower price in watts for your solar panel for about $0.75 per watt. Some solar panels pushout 300 watts and that will cost you $225 per panel.

The price of your system depends on these variables:

  1. The amount of sunlight exposure your area receives
  2. The entire cost of your system and types of solar panels you use
  3. Characteristics of your home
  4. The federal tax credit incentive

1.Sunlight Exposure

There are different regions that receive more sunlight than others and can give you more solar energy for your money. When the sun is able to get in the right position, it can give you more energy than if the sun was slightly offset a bit.  You can use a solar estimate calculator and enter your address, it can calculate:

  • How much sun your area gets
  • The number of panels you want or already have
  • Your annual usage of kilowatts per hour

When you talk about the roof that your system will be set upon, check to see if it receives direct sunlight or is obstructed by trees or buildings. If you have no means to be able to remove these obstacles, then you may want to reconsider the costs of panels.

2.Cost of the Entire System

You can use a solar panel calculator to determine how much you will spend either monthly or yearly. The cost of installing solar panels with a big solar installer can be pricey and can average around $12,000. Look for an installation deal from a distributor.

Most residential homes do not go above owning an 8kW (8,000 watts) system. Most homes only use about 8,000+ kWh. Before you purchase a solar system, a kWh costs around $0.20. The actual number of kWh used in your home monthly can be 600 kWh. Now, multiply that by 12 months in a year and that equals 7,200 kWh of electricity that you have used for the year. The need to go above an 8kWh system would surely lose you money in the end.

3.Your Home’s Layout

Having different levels to your roof can affect how much your system costs and if more products need to be brought in. Is your roof obscured by trees or buildings that would stop your panels from getting any sunlight? The shape of your roof whether it is flat or tilted will play a part in what kind of mount you will need.

4.Federal Tax Credit

With the purchase of a solar power system, there is a federal tax credit that is applied. This tax credit will save you 26% with the installation of your system. Towards the end of 2020, the tax credit will go down to 22%. This tax credit will ultimately run out by the year 2022 unless another bill extends the incentive.

The solar tax credit applies to both residential and commercial systems. However, if you signed a lease or PPA (Purchase Power Agreement) with the entity that installed your system, you cannot receive the tax credit. Also, if you are renting your property this tax credit will not be applied to you.

Although, if you do go with a PPA, then you have a chance of being able to put zero dollars down on your solar power system. Instead of paying your electric company for the power you use you will pay a fixed rate for the electricity that your system uses.

You can claim the tax incentive when you file your federal taxes. If someone else files your taxes, tell them that you have recently installed a solar power system.

There is a way to calculate when you will break even on the cost of your solar panels.

  • Subtract any incentives from the cost of your panels.
  • Divide the number you receive by how much you are saving on your electricity bills each year.

On top of knowing what the entire system will cost, there is also the cost of maintaining it.

Maintenance Costs

Some of the companies that install your solar energy system will offer to wash your solar panels for a certain price. They will have to be cleaned periodically to ensure they receive the most amount of sunlight that they can.

The price of their cleanings can range from $150 to $400+. The fee just for an annual inspection can be between $150 and $300. The price can also depend on:

  • Location: Where your solar panels are located can determine their maintenance fee. Cleaners want to have easy access to them and if they cannot, they have to have the proper tools to clean.
  • Roof Pitch: How steep or flat your roof is will either make it harder or easy for the cleaner A steep roof may require more labor.
  • Size: The sheer size of the number of panels you have will take more time for the inspector and the cleaner to look.
  • Maintenance Agreement: Try to add a maintenance deal to your cleaning agreement and that will help to lessen the cleaning fees each year.

An inspector should be called in to see your panels annually. This inspection will help to keep your solar power system functioning well. Now, if during the inspection they have found some faults in your system, the problems may include:

  • Corrosion: Metals surrounding your panels may have oxidized.
  • Loose Wiring: During heavy weather or some unknown force, the wires were knocked loose. This will require the silicone on the panels to be cut and replaced.
  • Cracked Panels: Mending the edges together or a full replacement of the panel may be in order if the damage is too much.
  • Broken Glass: The glass on your panels can be wrapped with a certain film that they will use.
  • Vegetation Obstruction: If you have let trees or vines wrap or disrupt the system from receiving sunlight, they will remove the obstructions for a fee.
  • Inverter: The piece that converts the solar energy gathered to electricity will need to be replaced if it is damaged. Should this happen, it would be the most expensive to fix.
  • Loose/Damaged Roof Tiles: Your system will have to be removed so that your roof can be addressed and fixed. An inadequate roof will not support your solar power system.

With the 20 to 25-year warranties, the solar panels can be replaced if they become damaged. Mostly you will not have to touch them, and they can be maintenance-free.

Should You Buy Parts or a Whole System

Solar energy systems can come in separate pieces. You are also able to buy them as whole units and have them installed. However, you must ask yourself if it is financially feasible to do either.

Purchasing the parts separately and from different solar companies, allows for those separate companies to do work on your system. There could be potential faulty installations from those companies. You may not receive a great installation on the different parts that you have selected. So, there could be inconsistencies on your whole system.

The parts that make up an entire solar power system include:

  1. Solar Panels
  2. Inverters
  3. Mounts
  4. Batteries

1.Solar Panels

Solar panels are the main star of this system. They are the ones that collect the energy you need. The panels develop DC electricity as solar irradiation and that moves the electrons through the solar cells that are inside of the solar panels.

Panels need sunlight only and not heat to gather solar energy. The more heat that is put on them the less adequate they become. Try to invest in panels that can withstand high temperatures so that you can have the most power during hot weather.

There are two types of solar panels:

  • Monocrystalline: These panels have larger crystals and have higher efficiencies. They look a bit better than polycrystalline panels. The electrons have more room that allows electricity to flow properly.
  • Polycrystalline: Comes at a lower price point than monocrystalline. The crystals are made of silicone. Because there are so many of them in a panel, there is less room for the electricity to move about.

When you purchase your solar panels, think of the quality. Buying a mediocre panel will lead to problems in the future. This is a component that will need to last you about 25 years against all the elements. Performance and durability should be your top priority since these are how you receive your solar energy.


The inverters have a set minimum and maximum voltage level. The temperature and the size of your system can affect your voltage and how well your system will perform. The wrong voltage could even damage your equipment to the point that it will have to be replaced.

These inverters take the DC electricity from the solar panel to 240V AC electricity that is right for your home.

This is also another piece of the system that needs to be of quality as it is continuously working to bring electricity to your home. Since it works hard all the time, the warranty on these inverters is usually 10 years.

There are two different inverters to choose from:

  • String Inverter: This inverter is connected to a wall and will then take energy from a string panel and convert it into AC electricity. These are mostly used for homes and businesses.
  • Microinverters: Installed to the back of each solar panel allowing them to operate separately. They are more costly than string inverters and they have a 25-year warranty.


Mounting is the same thing as racking when it comes to your solar power system. This is the piece that keeps your solar panels attached to your roof even during harsh weather. The mounts need to be pierced into your roof so that they can hold everything up.

Roof mounts are less costly because they use your current roof structure to give the panels a sturdy base. Determine the build of the roof. Is your roof flat or tilted? How your roof appears is the knowledge needed to find out what mounts you need.

There are five types of mounts that you can choose from to support your solar panels:

  • Tilt Legs: For flat roofs, you will need this type of mount. It will tilt your solar panels towards the sun so that they can get enough sunlight. These are mostly used for commercial buildings.
  • Ballasted Roof Mounts: This mount stands on a free-standing base that does not need to be pierced into your roof. It has to withstand the weight of the entire system and concrete blocks and they need to only be used for flat or slightly sloped roofs.
  • Fixed Ground Mounts: Set this mount in a cement slab, because this structure holds the panels up on the ground. This is a metal frame that can be done by yourself if you want to.
  • Pole Mounts: Best in snowy areas as the tilt can help the snow to fall off of it. These poles help your solar panel sit higher up off the ground and you can adjust the height when you need to.
  • Trackers: These mounts do as their name says and follows where the sun gives them the best sunlight. Not usually used for residential areas and for more commercial use.

Most companies do not skimp when it comes to mounts as this is the foundation on which your solar panels need to rest on. They carry the weight of the entire system on them.


Putting a battery on your solar panel will store more energy for you when you need it. That energy that is stored during the day, will be used at night. If you have many batteries in your solar power system, they can act together to store more energy.

Batteries can cost between $5,000 to $7,000+ including installation from a certified electrician and will add more to your overall solar power system’s bill. Your battery may need to have their own inverter that has the capacity to store energy to the battery.

The more you have to use the battery, the more difficult it is to hold a charge over time. Your battery will last your around 10 years before it will stop holding a significant amount of energy.

There are specific batteries that need to be at full charge daily and when you leave them nearly empty or halfway charged for a long time, can contribute to the batteries dying prematurely. Other batteries need to siphon off energy to keep them from overcharging and becoming damaged.

A feed-in tariff rate (FIT) is when the government is willing to pay you to send in any excess power you have stored. If you have no need for the extra energy you can send it to the common grid for others to have access to it. If you don’t send in this extra energy, you will miss your chance to earn additional income. By not using it, this will cause your FIT rate to become high. It will be wasted.

Buying the Whole System

When considering a solar power system, do your research on how big your system needs to be. The number of panels that you believe will need to be purchased are crucial to handling the amount of energy that your property uses up.

Purchasing the whole solar power system and having someone else install it, will prove to be a bit more costly than if you were to DIY your own.

The benefit of doing this is to have professionals come and secure everything to your roof. With the help of professionals this can be done in a matter of days as opposed to a week by yourself.

When going to buy a system, there are different solar power systems to choose from:

  • Off-Grid Solar: This system is totally not connected to the traditional electric power grid. Since you are not connected to the utility grid, you have to use batteries to handle the ebb and flow of energy. Can be used with RVs, boats, or tiny home.
  • Grid-Tie Solar (Hybrid): Lets the homeowner receive power from either the home electric system or the utility grid. You are able to switch between the two if need be. This does make you susceptible to more power outages because there is no way for your energy to flow to your home.
  • Grid-Tie Solar & Energy Storage: The added-on energy storage gives your battery power when the utility grid goes down. This will give a continuous flow of energy to your home.

There are individuals who are confused concerning the differences off-grid and grid-tie solar. Just be sure to ask about the system you are looking at and how it will be installed.

When you buy an entire solar power system the company that you choose will take care of everything. This will give you a limited amount of different equipment pieces to choose from. Picking your own parts will give you more room to work with if you want different parts that the solar company does not have.

The installation of your system costs around $2,000 to $5,000 out of the entire $15,000 to $40,000 of your system and that includes:

  • Labor costs
  • Permits from the Department of Buildings
  • Inspection Fees

With purchasing a solar power system there are some added incentives in the long run that will save you money.

Long-Term Costs of Ownerships

This is a big investment opportunity that will save you money in the end. Grid-tie systems will pay for themselves quicker than the other systems and will make you an even bigger profit.

While considering installing a solar power system onto your home, you may be thinking about what the long-term benefits are. The benefits of this system include:

  1. Future Energy Bill Expense
  2. How Much You Will Save When Buying vs. Leasing
  3. Taking Care of Your Home
  4. Sustainable Energy
  5. Reduced Footprint

1.Future Energy Bill Expense

Your energy bill could be cut by approx. 75% when you install your solar panels. This could lead up to saving almost $1,400 a year on your energy bill. Again, if you use a solar panel calculator it will estimate how long it will take to see a profit in your system. This is usually done between 5 and 20 years.

With solar energy, you can close in on your energy costs and can dodge any steep price hikes or inflations in rates that may occur in the future.

If the area you live in has temperatures that reach above 70 degrees most of the time, it can reduce how much energy your system can muster. So, being in a location that hinders your system from doing its best will cause for the energy to not be at its full potential.

2.Leasing vs. Buying

Buying your own system instead of leasing it can be costly at the beginning, but it does pay off in the end. The panels themselves can last for about 25 to 40 years if they are cared for properly. Other parts of your system need to be replaced in a shorter amount of time.

When you lease out your system, the company that you lease from owns the system and you will pay the rate of electricity that they specify. Even overtime after all the money you have shelled out to this company starts to add up, that business can still take away your system after the lease is up.

3.Taking Care of Your Home

Consider when you may have to renovate your roof. There are 20- and 25-year warranties that include the removal of your panels and reinstallation of them when you have to renovate your roof. Make sure you take care of any obstructions to make sure your panels have direct access to sunlight.

Determine how long you may be staying in your home. These solar panels bring in more value to your home. In the long run it is best to stay and have them pay for themselves.

With a solar power system, it can raise the value of your home by $20 for every $1 you save on your electricity savings a year.

4.Sustainable Energy

Regular electricity comes from fossil fuels like coal and natural gas. Burning fossil fuels will release gases that are harmful to everyone and this process will continue to speed up the effects of global climate change.

When burning fossil fuel and natural gases, there needs to be a lot of water involved to help with the process. This will continue to pollute water supplies. Solar energy does not need water to function.

Solar energy is a renewable energy source that is free to use and never runs out. You can help stop pollution and support clean energy with your switch to a solar power system. This system wards off carbon dioxide and other terrible gases that are affiliated with regular electricity.

When your system creates electricity no greenhouse gases are produced. It can also reduce premature deaths and reduce healthcare costs for almost everyone.

Solar power systems can be shared with neighbors to generate electricity on a bigger scale. With peer-to-peer energy trading you can stay connected to the grid and sell your excess energy to your neighbors.

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