Solar Power Cost

What is the Real Cost of Solar Energy?

What would solar power cost a homeowner? You will quickly discover while conducting research on this topic that the costs associated with installing a solar power system for your home can vary widely and is contingent upon various factors.

There are some general costs however that can be estimated, so we are going to try and do that here so you have a general idea of how much you'll need to budget in order to save money on energy costs in the long run.

The Cost of Solar Power Has Come Down
In Recent Years

There are several new technologies that have helped to lower the cost of solar energy. One is the use of micro-inverters which are designed to convert the DC electrical power generated from your solar panels into AC power that you can use in your home.

Older solar technologies used inverters that were larger, more expensive, (several thousand dollars just for one!) and that needed quite a lot of power to move the energy from the panels through the inverter towards your home. These inverters were so expensive that they needed to be used with larger solar panel systems.

The newer micro solar inverters are mde to be connected to just one solar panel. They cost just a few hundred dollars each, and are about the size of a small notebook computer ... some are even smaller. These can be easily attached to a single solar panels so that you can build a home solar system gradually over time, without breaking the bank.

In fact, with the new micro inverters you can have a complete panel, inverter and all the necessary attachments for under $2,000 or even less.

Another new technology that has helped to lower the cost of solar energy are thin film solar panels which are lighter weight, less expensive to product, and in some cases more efficient than traditional solar panels. This

How Do I Estimate Solar Energy Cost for My Home?

The first step to deciding whether or not you can benefit from solar panels is to determine how much power your home currently uses on a monthly and annual basis. You'll need to know how many kilowatt hours your home utilizes so you know how much power you need to generate using the sun's energy.

Next, you will want to know how many hours of peak sunshine your particular state experiences through the year. A sampling of sun peak hours for the United States can be found at

Figure out how many peak hours of sunlight you receive a year. Divide the number of kilowatt hours you use each year by the peak hours of sun and you arrive at the amount of energy you need to power your home in kilowatt-hours.

Cost of Solar Panels per Kilowatt Hour

A general rule of thumb is that you'll need 100 square feet of solar panels to generate one kilowatt of power. Solar power cost per watt is roughly $4.21 if you install the panels yourself.

Professional installation would run about $7-$9 per watt. Using these figures, you'll quickly discover that an average solar installation for an average home could cost as little as $20,000 or as much as $45,000.

Plan to budget 10% for installation manpower and 20% for inverters, solar panels, cables, and other materials. General maintenance and occasional fixes are few and far between, so the cost of those isn't relevant in your calculations.

Try Our Free Solar Estimator!

This useful and solar estimator from our friends at will help you to get a general estimate of your expenses!

Solar Power Cost - Tax Credits and Rebates

The good news is that depending on where you live, many local and federal governments offer tax credits and rebates to homeowners willing to install solar panels onto their home as a way of encouraging a switch to renewable energy sources.

Here in the U.S. where I live, there are federal atax credits, and at the state level rebates on property taxes and also rebates from some local utility companies.

The credits and rebates vary from state to state, so you would need to find out what your state offers prior to making any final decisions on switching to solar. You can look up your state at the online database.

You may be pleasantly surprised to find that many areas offer enough in credits and rebates to cut your cost nearly in half or even two thirds! Others may not be as high, but it's still a good amount of cash saved.

There are also solar power grants for which homeowners can apply, which could also save thousands of dollars on your system.

Solar Power Cost - How Long Will It Take to See a Return on My Investment?

The payback period varies across the states as well due to the number of peak sunlight hours and the final cost of your solar power system after rebates, credits, and grants.

The average time of return on investment is five years to nine years, although this will vary considerably depending on your location.

This brings up another important consideration as you're considering what solar power cost you'll incur if you decide to install a solar power system in your home.

How long do you plan to reside in this location? Homeowners who are planning to stay for several years will see a return on their investment, whereas someone only planning to stay in their home less than 10 years probably won't see the savings.

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