Curious about the cost of solar panels? We’ve got you covered. In this article, we’ll dive into the topic of solar pricing, shedding light on the factors that influence costs. We’ll also explore potential add-ons like battery backup or Tesla Powerwalls, and how they can impact the final price.
Factors influencing solar costs
Solar costs can vary based on several factors, including the size of the solar system, chosen equipment, system complexity, and general market conditions. On average, solar systems are priced between $2.70 to $3.50 per watt (W). This means that if your proposal is for a 7kW system, it would cost between $18,900 – $24,500. The larger the system, the more expensive it will be! It’s important to note that market prices can fluctuate, so staying up-to-date on current rates is crucial. Ground-mounted systems also tend to cost more than roof-mounted solar systems (but may perform better). If your salesman is speaking only of “monthly payments”, that’s a red flag– find out the cost of the system before you overpay.
Understanding system size
The size of the solar system is a significant determinant of the overall cost. Larger systems that produce more energy tend to cost more upfront. Average system sizes can range from 5 kW to 10 kW for residential applications. This size can vary depending on factors such as your energy consumption, available roof space, and budget. An average system cost could be anywhere from $15,000 – $35,000, before factoring in residential solar incentives.
What are the solar incentives in VA?
30% Federal Tax Credit
The Federal Investment Tax Credit (ITC) offers homeowners a 30% credit on the cost of solar projects. Projects begun before 2032 are eligible for the full 30% tax credit.
Electricity Savings
Most homeowners spend $1000 – $2000 a year on electric bills. Solar can reduce this to almost nothing, in addition to powering your home with clean, renewable energy for 25+ years.
SRECs
SRECs (Solar Renewable Energy Credits) are essentially carbon-credits, which can be sold automatically, generating 20 – 30% additional value from your solar!
Financing Costs & Dealer Fees
With solar costing tens of thousands, many customers will want or need to finance their solar purchase. Solar financing through national companies often results in inflated system prices– If you see a 2.99% loan, when standard rates are 7%, you can expect that your system price is being inflated to cover that cost. Solar installers like us often have to pay “dealer fees” to lending companies, in order to offer aggressive rates– These fees can be as high as 30% – 40% of the contract price, meaning installers have to greatly increase the cost of their product, just to make the same margin.
Financing can still be a great option, but we encourage customers to understand the full system price, look at cash purchase options, and check with their local credit unions to ensure they are getting the best deal.
Do solar panels actually pay for themselves?
While the upfront costs of solar installation can sometimes be surprising, it’s important to view solar as a long-term investment rather than a short-term expense, and also factor in your true out-of-pocket expense after solar incentives, like the 30% federal tax credit for solar.
On average, residential solar systems in Virginia pay for themselves in approximately 9 to 12 years, in addition to adding value to your home. depending on various factors such as location, energy usage, and incentives. Once your system has paid for itself, you can enjoy years of virtually free electricity, significantly reducing your monthly energy bills and increasing your overall savings, in addition to having added equity to your home. So, while the initial investment may require careful consideration, the financial benefits and environmental impact of solar energy can be well worth the commitment in the long run.
What should a premium solar panel system cost?
Solar systems are unfortunately not all created equal. Post-Covid, the market has been flooded with new solar panel manufactuerers, leading to untested products getting installed on some roofs. According to NREL, the quality of components, and the quality of installation are the two greatest factors in preventing solar system failures.
If you are looking at premium components like Enphase microinverters, REC panels, and installation by a company with NABCEP certified installers, you likely will pay more– but it may save you more in the long run.
Also make sure you understand the service warranty, and what you’ll pay over the years. We offer a 25-year service warranty, but most companies do not, and solely rely on the manufactuer’s warranty, meaning you may be on the hook for any labor costs. The lower the quality of components & installation, the more likely your maintenance costs are to climb.
Add-ons: Battery Backup or Tesla Powerwalls
When evaluating solar costs, it’s essential to consider any add-ons you might want. Battery backup or Tesla Powerwalls, which provide energy storage solutions for when the sun isn’t shining, can add an additional $10,000 to $30,000 to your total cost (before incentives). While these options offer benefits like energy resilience during outages, they also impact the overall investment. If you are interested in batteries or Tesla Powerwalls for your system, make sure you bring that up early, so that the system can be designed with that in mind.
Comparing Solar Quotes
For a detailed breakdown of solar pricing, equipment specifications, and system sizes, make sure to read our blog post How to Compare Solar Quotes. This guide will help you navigate the intricacies of solar quotes, empowering you to make an informed decision.
Conclusion
As you explore the world of solar energy, understanding the factors influencing solar costs is crucial. Keep in mind that prices can vary based on system size, equipment, complexity, and market conditions. If you’re considering battery backup, remember to budget for potential add-on costs. By staying informed and comparing quotes, you’ll be better equipped to make the right solar investment for your needs and budget.
