Cost of Solar Energy

8 Tips to Lower Your Solar Power Costs

What is the cost of solar energy to a homeowner interested in installing a solar home system? Learn how to assess your site for solar energy, how to estimate your cost, and the top eight tips for lowering your solar power cost.

What are the solar power costs to a homeowner interested in installing a solar home system? Homeowners interested in helping the environment and saving money on their monthly electric bills are asking this question more and more often. The good news is that the information regarding residential solar systems is more readily available than in previous years, so homeowners can do a lot of their own research prior to making any big decisions.

Site Assessment of Your Home for Solar

The first thing any homeowner should do before making an investment into a solar home system is to conduct an assessment of their home site. For example, you should ask and answer the following questions.

  1. How much sunlight does my home receive per day? Is it at least 3 to 4 hours per day?

  2. Can my roof support the weight of several solar panels?

  3. Is the pitch of my roof at the right angle to catch the sun's rays?

  4. What climate do I live in? Is it primarily sunny or overcast throughout the year? Does the area experience severe weather conditions?

  5. Could I afford a system that would enable me to tilt my solar panels toward the sun when needed?

  6. How much energy do I need or want to generate with solar in order to run the household appliances?

  7. Will my solar system be tied to the grid or off-grid?

  8. Will I install the system myself or pay for professional installation?

What is the Cost of Solar Energy for Residential?

It's a good idea to have an understanding of how to calculate the potential expenses you could incur with a residential solar system before you sign on the dotted line. ( We also have a convenient solar calculator you can use!)

Solar energy output is measured as price per kilowatt peak or kWp. As of October 2010, the price per watt peak was $3.59 kWp, which is down from $4 kWp one year ago. A good rule of thumb for figuring out how much a solar home system will cost you as a homeowner is to estimate $8,000 to $12,000 per kilowatt peak, which includes professional installation.

Solar panels on an average home generating 3.6 kilowatts per hour can deliver roughly 10,000 kilowatts of energy, which is about half of what most average homes in the U.S. require in electricity. Given that number, a homeowner should plan for at least $15,000 at the lowest price up to $45,000, which is at the high end for a residential solar energy system.

Keep in mind also that the cost of solar energy created by an off-grid system is typically less expensive than a grid-tied solar energy home system, so rural homeowners will spend less to go green than their suburban, city, or urban neighbors.

Estimate Your Solar Power Costs

This is a great tool to help you in estimating your solar power costs. Try this handy solar calculator tool from our friends at!

Benefits of Using Solar at Home

One of the nicest benefits of going solar is that your electricity bill will be lower than ever. Over time, depending on your climate and geographic location, it's possible that you could actually generate more energy than you use, which means you won't have an electricity bill at all. It's possible that your local utility company will send you a check or give you a running credit!

You're doing the environment a favor when you utilize solar energy in place of fossil fuels. Solar energy is clean and it is renewable. Future generations will thank you.

Once your system is installed and you recoup your investment, your power is free! You'll save money while still enjoying all the creature comforts of home.

A solar home system provides greater independence from the utility companies and fossil fuels. Power outages won't be as worrisome either.

Tips for Lowering the Cost of Solar Energy for Residential Applications

Don't be intimidated by the initial numbers associated with installing a solar energy system on your home. There are several ways you can lower the cost of your system if you know where to look.

  • Government rebates - up to 50% rebate on your home system - it's actual cash in the form of a check typically

  • Tax credits - the Federal government offers dollar for dollar tax credits against the amount of money you owe the government at tax time and you do not have to pay the money back

  • State incentive programs - some states offer financial incentives to homeowners who install solar panels

  • Net metering - the local utility company gives the homeowner a retail credit in exchange for the electricity they generate via solar energy

  • Energy efficient appliances - Energy Star appliances used in the home are potentially eligible for federal tax credits

  • Include the cost of the solar home system into your mortgage - this is especially efficient if you are building a brand new home. It's easier sometimes to roll the cost of the system into your mortgage at the time of building.

  • Efficient solar panels - make sure you are purchasing a quality product from a reputable company. Research consumer reviews to get ideas on which name brands rate the highest.There are many options for finding cheap solar panels.

  • Used vs. new panels - sometimes buying used solar panels can save you money, but be aware that you may not receive the tax credits and rebates from the government if your solar panels are not brand new.

Let's say the original cost of solar energy estimate was $45,000. After tax credits, incentives and rebates, it's feasible that your entire system could cost less than half that amount!

All of a sudden, the cost of the solar home system isn't so daunting when you consider that it will pay for itself in perhaps 5 short years. It may take up to 10 years to pay for some systems, but again, if you're planning to stay in your home for the next several years, you will still see a return on your investment.

Homeowners interested in going green and saving money should research and seriously consider the cost of solar energy as a long term investment that will reap long term benefits in future years.

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