What you need to know about low solar prices.

Updated

Collectively, the Editorial team at SolarReviews has over 30 years of experience in the solar industry. We are on the front lines every day in order to help homeowners compare their local solar companies and find the right installers for their needs.

There are tens of thousands of reviews written on our site by people who have already gone solar, and their combined voices paint a clear picture. Prioritizing lowest cost when buying solar panels for your home can be a very bad move.

As consumers, we are all trained to seek out lower prices, but with solar panels lasting 25 years, we need to think about what we might be trading off in order to get the absolute lowest price.

When buying solar panels, there is a judgment call to be made between picking an installer that offers the lowest cost installation and paying a premium for a system (and service) that you can depend on for 25+ years.

Lets start by estimating how much a solar system will cost for your home based on your location, electricity use and the average prices of installed solar systems in your area.

 

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Average solar panel cost 2021

An average professionally installed residential solar panel system will cost somewhere between $16,000 and $20,000 before incentives. 

Once you take the 26% federal solar tax credit into account, the overall cost drops to between $11,800 and $14,800, respectively. This works out to between $2.60 and $3.35 per watt of solar installed. 

However, you might see solar companies offering solar systems for as low as $2.00 per watt and as high as $4.50 per watt. That’s a big difference in pricing, and it can be hard to determine which installer to choose. 

The key to finding the right price for solar is to figure out how cheap you can go before you are compromising on the product, quality of the installation, and the certainty that the installer will be around to provide you with 25 years’ worth of support.

Average cost of solar panel installation in 2021

Cost range of local prices

Net profit (savings less system cost)

Payback period

Recommended size for the selected utility bill

Solar panel cost calculator

Calculating solar panel cost for your specific home

Solar panel system cost varies a lot based on location and how much electricity a home uses. So, the information most valuable to you is going to be how much a system that suits your electricity needs would cost, based on the prices offered by solar companies near you

If you’re ready to jump in and see how much a solar installation costs in your area, you can use our solar panel calculator below. Not only will you see prices offered by local installers, but you’ll also get insight into how much solar will save you on your electricity bills.

See local installation prices for the system size you need 

What is the right price to pay for solar panels? 

You should be able to buy a high-quality solar system from a reputable solar company for between $2.60 and $3.20 per watt before applying the 26% federal solar tax credit. 

Pricing may be slightly higher if solar financing is available, around $3.60 per watt, so long as the system uses very high-quality brands like Sunpower, LG, and Panasonic. 

At SolarReviews, we believe you should never pay more than $3.60 per watt for a system regardless of how good the equipment or reputation of the solar panel company is

But you don’t want to pay too little for a solar installation either. We recommend staying away from solar offers that are less than $2.60 per watt - even if it sounds like a great deal. 

With that low of pricing, it’s likely the company won’t be able to stay in business and offer you the support you need over the 25-year lifespan of your solar panel system. It seems that each year there are new solar installation companies that come into the industry and undercut everyone, only to go out of business a year or two later. 

It is simply not worth taking the risk that your solar company will go out of business just to save one to two thousand dollars on a system. Once the company goes under, it can be next to impossible to find another company to service the panel, and you could become what is known in the solar industry as a “solar orphan”. We’ve seen many cases of solar customers who have been abandoned by their installers and are left for months, or even years, with solar panel systems that don’t work. 

Installer reputation is a key factor to consider

The reputation and stability of the solar panel installation company you choose is more important than the exact price of your quote, provided it is in a fair range. You can compare prices and reputations of each of the solar installers near you on our site.

And don’t let big corporate solar installers fool you. History has shown that even though corporate installers may have some level of bankability, they aren’t immune to going out of business. Plus, big corporate installers can’t provide the level of personalized customer service you need when you go solar. 

Tips for getting the best value for money when buying solar panels

It’s natural to seek low prices when making a major purchase like a solar system. But you need to think beyond the cost and remember that quality and reliability matter, too. Here are some tips for finding the best value solar system, without having to compromise. 

Tip 1: Go with high-quality, low priced panels 

Tier 1 solar panel manufacturers Like Sunpower and LG Solar make really high-quality solar panels, but they also tend to come at a high price. However, there are large-scale Chinese manufacturers like Longi Solar, Trina Solar, Jinko Solar, and Canadian Solar, that have state-of-the art manufacturing processes, but sell panels at a fraction of the cost. 

Local solar companies should be able to sell systems with these panels in the range of $2.60 to $2.80 per watt. 

Tip 2: Don’t cheap out on the inverter

Never consider using cheap inverters to save money. Inverters are the nerve center of the solar panel system and contain a lot of important software. Inverters are the part of the solar system that is most likely to fail as it is, so it’s important that you go with reputable brands like SolarEdge, Enphase, APS, SMA, or Fronius. 

Tip 3: Buy with cash - if possible

Not only will paying for a solar system in cash lead to more long-term electric bill savings, but it can also drive down the price of the installation. When a customer decides to pay through a solar loan, installers have to pay something called a ‘dealer fee’. Dealer fees typically aren’t disclosed to you as the customer, but end up getting built into the total price of the installation. When you buy in cash, you avoid these fees. 

Are solar panels worth it for me based on my location and power use? 

In most areas in the U.S, the electric bill savings provided by solar pay off the cost of the solar system after just 4 to 8 years. After that, your panels will produce free electricity for the remaining 20+ years of the system's lifespan!  

The more expensive the electricity prices are where you live and the more electricity your home uses, the shorter your payback time will be. You can get a better idea of what the solar payback period for your specific home will be by entering your utility provider and monthly utility bill in our solar calculator

On top of electric bill savings, solar panels also increase your property value. Zillow estimates solar panels increase home value by about 4.1%, which is about $16,400 for a $400,000 home. That’s more than it costs to install the average solar system in the U.S. after the federal tax credit - not bad! 

If you're only looking for average solar system cost data and do not need to see prices from local solar companies, you can do so by using the solar panel cost and savings calculator below. This version asks you fewer questions and is slightly less accurate. However, it shows the results more quickly, without requiring you to enter any personal information.

Calculate your solar panel payback period

Key takeaways

  • The average solar panel installation in the U.S. will cost between $11,800 and $14,800, after the 26% federal solar tax credit.
  • Beware of installers that charge $2.00 per watt or less for solar as they are probably compromising on installation and equipment quality or customer service.
  • No matter the quality of the equipment used, you should never pay more than $3.60 per watt for solar.
  • Installer reputation is just as important, if not more important, than the cost when considering going solar.


 - Author of Solar Reviews

Andrew Sendy

Home Solar Journalist

Andy is deeply concerned about climate change but is also concerned about cost of living pressures on American families. He advocates for solar energy and solar battery storage only to the extent that they make financial sense for homeowners. He is not affiliated with any particular solar company in the United States.

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