How much does a house full of solar panels cost?
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How Much Do Solar Panels Cost?

Steve Hansen
September 4, 2023

If you are thinking about diversifying your electricity supply with renewable power, you are blessed with good timing. Not only is the energy of the sun still available for free, the technology we need to harness it is improving year after year. Add to that beneficial technology like battery backup systems, plus some different options to help you with the cost of your system, and it’s now possible for a huge number of people to have a solar electric system installed.

What Are Solar Panels?

Making usable energy from solar energy is not a new idea. Plants have been doing that for a while with chlorophyll. But the technology that we think of—the precursor to the black rectangular photovoltaic (PV) panels—was first developed by Charles Fritts in 1883. He coated selenium with a thin layer of gold and the experiment produced a flow of electricity.

Today the vast majority of solar panels are made with silicon as the semiconductor material, along with glass for the transparent top surface and an aluminum frame. With no moving parts and a service life of about 25 years, this device is an ingenious (and well-proven) addition to our clean-energy needs.

What Are the Components of A Solar Power System?

In addition to the panels, your solar power system needs a few other components. First, let’s look at a system with a battery backup. In that type of system, your PV panels will send DC (direct current electricity) to a charge controller. That device works with and monitors your battery system to keep it properly charged. It also works between the battery system and the inverter when the battery is powering your home. Without a battery backup there’s no need for a charge controller, but your system does still need an inverter.

The inverter’s job is to take the DC power produced by the panels and stored in the battery system and transform it into AC (alternating current electricity), which is what your home appliances require. AC power is also what the electric grid requires.

Your system will also require a variety of wire and breakers and an electrician to connect it all to your electric service, but these components are the heart and soul.

How Many Panels the Typical Home Needs

That answer is dependent on your goals. Do you want to completely offset your electricity usage and make maximum use of the tax credits in the Inflation Reduction Act? You might also just want to use the roof space you have for a modest system that still cuts your electricity bill by 25% or 50% or so. No harm in that.

In general, an average grid-tied home will need roughly 20 panels to offset the typical usage. You’ll need to dial that in, though, as you’ll find plenty of variance in the output of panels, as well as how much power those panels can produce on your roof. Living in Las Vegas as compared to Seattle, for example, you’ll experience nearly twice as many sunny days per year, on average. With that much more sunshine, your panels will simply be producing electricity for more hours per year.

Now, here’s where you will have to do some calculations, if you like. Here’s a very good tutorial on how to look at your energy usage. You can also just talk to a professional who knows the nuances of your location. The typical solar panel is about 3 feet by 5 feet, so 15 square feet. Common wattages range from 200–400 watts, so it’s possible to get substantially more power from the same space—if you choose better solar panels. You need to determine how many panels will fit on your roof in the best locations.

In addition, you’ll be looking at how your roof is oriented to the sun, what’s the slope, and how many panels will fit? Google’s Project Sunroof will give you a satellite image of your rooftop and give you an estimate of your energy savings over time. The ideal roof has a low slope and faces mostly south with no overhanging trees. Even when you don’t have an ideal roof, you can still install a solar PV system that meets your goals, but that’s when you probably have to install more solar panels.

So What’s the Cost?

You can expect to pay from $3–$4 per watt for the installed price. That means a typical 5-kilowatt system runs you from $15,000–$20,000. A kilowatt is 1000 watts, so a 5000-watt system, multiplied by $3 is $15,000, and by $4 is $20,000. But that’s without incentives bringing the cost down for you, and you can take a 30% tax credit when you also purchase a battery storage system. You may also have state and/or local incentives, or even a power purchase agreement that works in your favor.

What’s A Power Purchase Agreement?

Power purchase agreements (PPAs) can appear to be a bit complex at first blush, but here’s the gist: you as a homeowner can enter into a contract with a solar PV systems or wind energy developer/company, for example. The company owns and maintains the system after installing it on your property. Your contract states the rate you pay and the term, typically for 10–25 years. At the end of the term, your options will also be stated, such as renewal of the contract at a new rate, removal of the system, or your purchase of the system.

The appeal of these systems, for many people, is getting access to cleaner renewable energy than they can get from their legacy utility company. They’re decoupling partially or completely from fossil fuel energy while getting a better rate on their electricity, plus they have no upfront cost for a new and professionally installed solar PV system.

If you’re interested in getting clean power into your home and you’re not sure how you’d pay for a solar PV system, a PPA is worth looking into. But several states have restricted them, so you’ll have to do some research for your own state.

What’s Next For You?

Is it time to make your move on your new solar PV system? With all those incentives and better technology, your timing couldn’t be better.

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