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How Much Do Solar Panels Cost And Are They Worth The Investment?

Do You Save Money With Solar Panels?

It’s the biggest question asked when considering investing in solar panels. The short answer is yes you will save money, but the bigger question is how much do solar panels cost to make it a worthwhile purchase. 

When looking at this, it’s important to know that it depends on a number of factors from:

  • Your property’s location
  • The state and utility incentives.
  • The cost of the solar panel system
  • The cost of the solar panel installation
  • The size and number of panels on the roof
  • Hours of sunlight by season
  • The angle of the roof
  • The weather patterns in your region
  • Whether you install the solar panels yourself

However, there are four main elements that have the greatest impact on how much solar panels cost. 

  • The type and cost of the solar panel system
  • The available sunlight hours
  • The size and number of panels on the roof
  • The cost of the solar panel installation

In this guide, we will look at each factor, and gather the information, so you can quickly calculate, using our solar panel calculator, how much money you’ll need to fund your solar panel project.

We’ll then compare this to the payback time and ultimately work out how much money you can save on your electricity bill with our payback calculator.

How Much Do Solar Panels Cost?

As with any investment, this will depend on the type, quality and number of solar panels you’ll need for your sustainable energy plan. Also, whether you want to reduce or eliminate your electricity bill completely.

Not all solar panels are created equal. In our guide, “What Types Of Solar Panel Do I Need?”, we looked at some advantages and disadvantages of each type of solar panel. Here’s a summary.

4 Types Of Solar Panel: Advantages And Disadvantages

Factors To Consider By Solar Panel Type

Thin Film Solar Panels And Solar Cells

Polycrystalline Solar Panels

Monocrystalline Solar Panels

Solar Shingles And Solar Roofs

Now let’s drill down and look at some of the average costs by panel type.

How To Calculate The Cost Of Solar Panels?

Depending on your budget and whether you want to reduce or eliminate your electricity bill, you have a choice between the 4 main solar panel types. 

Here we will look at the following factors to calculate this:

  • Amount of electricity you need to generate per hour and per month
  • Average sunlight hours per season
  • Cost per tile
  • Number of tiles needed
  • Available roof space

Total Amount Of Electricity Your Solar Panels Need To Generate

It’s incredibly useful to work this out to make sure you reach your energy sustainability goals. Calculating this is relatively straightforward. You simply check your utility bill to find out your electricity use per month and that’s the kilowatt goal your solar panel system needs to generate.

According to The U.S. Energy Information Administration 

“In 2019, the average annual electricity consumption for a U.S. residential utility customer was 10,649 kilowatt-hours (kWh), an average of about 877 kWh per month. Louisiana had the highest annual electricity consumption at 14,787 kWh per residential customer, and Hawaii had the lowest at 6,296 kWh per residential customer.”

For our example, let’s say you need 877 kWh per month and estimate what your hourly rate is.

Minimum Amount Of Electricity Your Solar Panels Need To Generate

The next step is to calculate how much electricity you need to just run your major appliances. It’s a good idea to get this figure as you may not be completely self sufficient in electricity because:

  • You live in an area that will not give you enough sunlight all year round

  • You are on a budget, so can’t fit a complete solar panel system

  • You don’t have the roof or land space to have the required solar panels 

If this is the case, it’s good to get a foundation to work from by estimating the amount of electricity your essential appliances need. Later on, when we calculate your solar requirements this will be your baseline. 

Here’s a quick way of working this out.

  • Usage Time: Work out how many hours in a day you use each major appliance. For example, your fridge, TV or hot water.

  •  Device Wattage: Now check your appliance for a label that will give you its wattage.

  • Estimation: Multiply the wattage by the number of hours you use. This is your watt per hour. 

For our example, let’s say you need 400 kWh per month and estimate what your hourly rate is.

Average Number Of Daylight Per Day

This will depend on where you live and the time of year, but it’s a good idea to find out this figure from your local meteorological service.

According to the US Climate Blogspot the average is 15 hours a day in the U.S. but peak sun times can range from 4 hours in Massachusetts to 7 hours in Arizona.

For our example, let’s use 6 hours of peak sunshine on average per day.

Standard Solar Panel Sizes And Cost Per Tile

Most solar panels come in either 60-cell or 72-cell panels, which measure:

  • 60-cell panels: 39″ x 66″ (3.25 feet x 5.5 feet)
  • 72-cell panels: 39″ x 77″ (3.25 feet x 6.42 feet)

Now that you know what you need, and the peak sunlight average it’s time to choose your tile. For this comparison we’ll look at a typical 5 Kw tile. As you can see, there is a reasonable price difference between the different efficiency and quality points. 

Panels Sizes & Costs Factors To Consider

Thin Film Solar Panels And Solar Cells

Polycrystalline Solar Panels

Monocrystalline Solar Panels

Solar Shingles And Roofs

Going for the cheaper option can be a false economy, as the cheaper tiles produce less electricity and have a shorter lifespan. This means that over the long term they can work out to be more expensive.

How Many Solar Panels Do I Need?

So you know how much electricity you need to be totally self sufficient in energy and also how much to just run your major appliances.

Now let’s look at how many solar panels you need to produce this amount of solar energy.

How To Calculate Your Energy Needs?

On average, for every square foot of roof you can generate about 15 watts of energy. A Photovoltaic (PV) solar panels have a wattage from 150 watts to 370 watts per panel.

Is Your Roof Big Enough For Solar Panels?

To work out how many panels you need:

  • Multiply your hourly energy consumption
  • With the average daylight hours
  • Divide this by the solar panels wattage you have given you the numbe

Now it’s time to go out and measure your roof to see if they’ll all fit

What Are Solar Panel Installation Costs?

Costs can vary dramatically based not just on your budget, goals and property size but also with the supplier you choose. On average you can see costs from $12000 – $45000.

To make it easier, we have created this solar panel calculator for you where you can also compare different suppliers

The Payback Time Of Your Investment In Solar Panels

By now you should have a reasonable idea of your energy needs and how much a solar panel system will cost. So how long will it be before you get your investment back.

The US Department Of Energy estimates that the average payback time is 4 years. However, this depends on your state and the incentives you have received, plus the average cost of your electricity bill from your utility company. 

Essentially, to work out your breakeven time you need the:

  • Total Set Up Cost E.g. $18 000 minus Incentives received E.g. $10000
    = $8000
  • Total savings per year, E.g. $1000 plus what you sell back to the electricity company through an SREC E.g. $1200
    = $2200
  • Set-up costs $8000 divided by the total saving $2200
    = 6.5 years to breakeven

Something to remember is that during the year when your electricity costs are low, then the savings you make will also be low, which will affect the payback time.

Are Solar Panels Worth It?

Without a doubt, there’s a lot to think about when deciding to invest in solar energy. Whatever your budget you will absolutely benefit from installing solar panels and when looking at how much solar panels cost, in the long run they pay for themselves.

Whatever your circumstances, never compromise on quality as solar panel installation is a tremendous investment and the better the panel quality the more of a return you will receive. . 

If you would like to see how the leading solar panel suppliers compare against each other click on the link at the bottom of the page.

Answer a few questions to find the best solar deal in your area.

Benefits of Solar

Lower average monthly electric bills

Fixed electricity rate for 20+ years

Unused electricity sold back to the grid

Federal, State and local incentives

Increase home value and faster home sales

Learn More

How Much Do Solar Panels Cost And Are They Worth The Investment?
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