What you need to know about solar panels for your home in 2020
On this page:
- What rebates, credits, and incentives are available?
- Cost for average home
- How do they work?
- How much they save
- Better to lease or buy?
- How long they last
- Kilowatt (kW) vs. kilowatt hour (kWh)
- Worth it for my house?
- Best panel types
- Best panel manufacturers
- Importance of panel efficiency
- Types of solar systems
1. What rebates, solar tax credits and other solar incentives are available where I live?
In 2020, homeowners are eligible for the 26% federal solar investment tax credit (ITC) provided they have some federal income tax liability against which this credit can be applied. The federal solar tax credit reduces to 22% at the end of 2020 and to zero at the end of 2021. This is why so many people are considering installing solar panels on their homes now.
Some are lucky enough to be eligible for additional state and local incentives. In some states, such as New York, South Carolina and Utah, homeowners who install solar can receive a state tax credit on top of the federal tax credit.
Other areas, like Washington D.C, New Jersey and Massachusetts, have various forms of performance-based incentives, where you can receive extra money for the energy your solar panels produce each year!
Other regions, including most of Florida, have special solar loans known as PACE loans that allow homeowners to finance 100% of a solar system, and to pay it back through the home's property taxes.
There are also a variety of solar incentives offered by utilities at the local level in states like Texas and others.
We work very hard to keep our solar estimator up to date with all of these tax credits, rebates and other incentives so that it can show you all incentives available for a solar panel system where you live.
2. How much do solar panels cost for an average home?
The average cost of a solar panel system for a home in May 2020 is $3.18 per watt, making an average 7 kW installed residential solar power system $22,260 before the 26% federal solar tax credit and $16,472 once the tax credit is applied.
You can see the current average cost of professionally installed solar systems by state, by system size, and by solar panel brand here.
Your home may use more or less electricity than the average home and this will reflect in the cost of a system.
If you enter your address and monthly electric spend into the estimator below it will calculate the size of system your house will need, if it will fit on your roof and the amount it will cost after rebates and tax credits. It does this based on your location, roof, electricity use and the prices offered by local solar companies. Over 700 solar companies around America share their prices through this estimator, so it is very accurate.
3. How do solar panels work on homes?
Usually, when solar panels are installed on a home they are tied to the grid. The solar panels produce electricity during the day when the sun is shining, and that electricity is used to power your home. Solar panels cannot produce electricity at night when the sun is down, so that is when your home will draw power from the grid.
Check out this video for more information:
4. How much will solar panels save me on my home?
The amount that you will save with solar panels varies depending on how much you spend on electricity. If you spend $120 per month on electricity and you install a solar panel system that is designed to offset all of your electricity usage, you could end up saving $36,000 over the lifetime of the system!
Our solar calculator will show you an estimate of how much you can save with solar panels based on your monthly bill.
5. Is it better to lease or buy solar panels for home?
Buying solar panels will give you the maximum electric bill savings over the life of the system. Plus, buying solar panels for home allows you to benefit from the federal solar tax credit and other local solar incentives. However, we understand that the upfront costs of installing solar can be intimidating.
For this reason, some people opt to enter a solar lease. While solar leases allow you to avoid the upfront costs of installing solar, they provide you with much lower savings over the lifetime of the system. Also, because you don’t own the system when you have a solar lease, you might not be eligible for solar incentives like the federal tax credit.
A better option when you don’t have the cash to purchase a system right away is to take out a zero-down solar loan. There are many low interest rate solar loan options. Financing a system this way allows you to get more savings over the lifetime of a system than you would with a solar lease. Plus, you can still take advantage of the tax credit and other incentives.
6. How long do solar panels for home last?
All major solar panel brands have a minimum warranty life of 25 years. Some premium brands have a warranty of 30 years. However, solar panels can last beyond their warranty life.
7. What is a kilowatt (kW) and what is a kilowatt hour (kWh)?
Watts (W) are a measure of power that represent how much energy is released in a system an an instant of time. To find out how many watts are in a system, you can multiply the current by the voltage.
The size of a solar system is usually expressed in kilowatts (kW). This is because solar systems for homes need thousands of watts in order to produce enough electricity. Each kilowatt equals 1,000 watts.
Each individual solar panel used for a residential solar panel installation in 2020 is likely to be rated between 300 watts and 360 watts. A typical 7.2 kW system would require 20 solar panels if 360-watt solar panels were used.
Kilowatt hours (kWh) are a measure of total electrical energy used or produced over a period of time. This is the unit that you are billed for your electricity in. You can figure out how kWh consumption by looking at a device’s wattage. For example, if a 1,000 watt refrigerator is used for one hour, the total amount of energy it consumed is 1 kWh.
8. Are residential solar panels worth it for my house?
While it is up to each of us to decide the best way to spend our hard-earned money, residential solar panels compare very favourably to other traditional forms of investment. With a solar payback period of between 4–10 years, this represents a simple investment return of between 10–25%. This is a significantly better return than the long term average returns for both shares or property. Here is a more detailed discussion on whether solar panels are worth it.
Of course, the exact answer to this question depends on the location of your home, the amount of electricity your home uses and the local prices of residential solar systems.
9. What are the best types of solar panels for a home?
Monocrystalline solar panels are the most efficient solar panels you can install on your home. The typical efficiency of monocrystalline panels from a Tier 1 brand is usually between 19% and 22%.
It was once the case that monocrystalline solar panels were significantly more expensive than the less efficient polycrystalline panels. The cost difference between monocrystalline and polycrystalline panels is now minimal, making monocrystalline solar panels the best choice for home solar.
10. What are the best brands of solar panels for homes?
Some of the top-selling home solar panel brands are:
All of these panels are great choices for your home solar installation. SunPower’s panels are the most efficient out of the three, but LG and Panasonic offer greater corporate bankability. However, all three of these solar panels are very expensive when compared to panels sold by other Tier 1 manufacturers.
It is unlikely that you will have any problems with solar panels from the brands listed above. We recommend that homeowners stick to the Tier 1 solar panel brands as opposed to Tier 2 or 3 brands, as Tier 1 products are more reliable.
For help picking the solar panels that are right for you, check out our solar panel reviews page.
11. How important is solar panel efficiency?
Solar panel efficiency is not as important as one might think. The efficiency is already taken into account when rating the power output of a panel. So, if you’re comparing two 360 watt solar panels that have the exact same specifications, except one has a higher efficiency, they will both produce the same amount of power. The difference is that the higher efficiency panel will just be smaller in size.
So, it’s usually not worth paying the significantly higher price for premium efficiency panels unless you have a limited amount of roof space.
12. What are the different types of home solar power systems?
There are three main types of solar power systems for home:
Grid-tied systems are the most common home solar power system. Grid-tied solar systems are made up of rooftop solar panels that produce DC power, and inverters that convert that power into AC power that can be used in your home. Excess solar energy that is generated during the day flows back into the grid. At night, or during times when solar production is low, your home will be powered by the grid. These systems do not provide backup power when the grid goes out.
Hybrid home solar power systems are similar to grid-tied systems, except they include a battery to store excess energy the solar panels produce that your home doesn’t use. You can use the energy stored in your battery instead of drawing from the grid when your solar panels aren’t producing.
Homes with hybrid solar systems will have backup power in the event of a grid outage, which makes them popular in places that experience frequent power outages. They are also popular in areas with time-of-use electric rates, like California. Batteries can qualify for the solar tax credit, plus your area could have additional solar battery rebates.
Off-grid solar systems
Off-grid home solar systems are not connected to the public electric grid at all. In this case, all of your power needs must be met with solar panels and batteries. These systems are usually more expensive, as you need more solar panels and energy storage in order to cover all of your usage, as the grid can’t be used during times of low solar production. When designing an off grid solar system, it is usually also necessary to strictly control and measure loads and have some kind of backup generator.
Author: 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.