Whether you’re searching for a clean energy alternative or looking for ways to reduce your electric bill (or both!), you’ve probably thought about installing solar panels on your property. And it makes sense — if you can generate electricity from sunlight, which is a pretty abundant resource, why wouldn’t you? Especially if you can save money on your future power bills.
But do solar panels really save you money? And if so, how much? Is the upfront cost worth it?
The answers really depend on the size of the panels you install. So let’s look at the overall cost of solar panels and then compare that to the savings they can give you after they’re up and running.
How much do solar panels cost?
Let’s start with the panels themselves. The average price for a solar panel system across the US is around $3.14/watt, and the average solar system size is around 6 kilowatts (kW), or 6,000 watts.
That means that the typical solar panel system installation in America costs about $18,840 (6,000 watts x $3.14/watt).
Right off the bat, the federal solar tax credit knocks that cost down by 30%. So now you’re looking at an average out-of-pocket cost of $13,188. That’s a 6.5% decrease from the average cost in 2017. And the cost to build solar systems is decreasing, which means the installation cost will probably continue to drop, as well.
But the savings may not stop there — many states, local governments, and utilities will offer you rebates and other tax incentives for installing the solar panel system. It’s worth it to call around, or at least do some research and investigate whether or not a solar panel system qualifies for additional savings in your area.
Are solar panels worth it?
Now that you know the cost you’ll be paying upfront, let’s talk about the main question: do solar panels really save you money?
How much money you can save is a different, and much more complex, question.
There are several factors that affect your cost savings:
The easiest way to figure out your potential savings is by looking at your energy bill. The average American family spends nearly $1,500 a year on electricity. If you install a solar panel system that covers 100% of your electricity needs, you could save $1,500 a year, or more than $100 a month. That means that your solar panel system could pay for itself in under 10 years.
Another benefit? Consistent costs. Utility rates increase annually — right now at a rate of around 2.2% per year. Generating your own electricity with solar panels costs the same every year.
Solar panels can last for decades; the current average is about 25 years. If you’re covering 100% of your electricity needs and your solar panel system pays for itself in 10 years, that means 15 years of free energy — and no greenhouse gas emissions.
What if you can't install your own solar panels?
While solar panels are a great way to save money and help the environment, the upfront costs can still be a big barrier. Not everyone can afford to spend thousands of dollars on installation, even with tax credits and rebates.
But that doesn’t mean you can’t go solar.
Community solar farms are an alternative for people who either can’t install their own solar panels or would prefer not to. They’re a great option for those living in apartment buildings or renting their homes. When you subscribe to a community solar farm, part of your regular power bill gets repurposed to keep the solar farm running. When the farm generates electricity, you get credits back on your power bill, so you’re guaranteed to save every month. And you’re still helping the environment by contributing more clean energy to the power grid. It’s a win-win.
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