Are Solar Panels Really Worth It?

is solar worth it?

Every solar company has a variation of the same sales pitch, “did you know going solar can save thousands of dollars?” They make it sound so easy, but the truth is, whether solar is a smart long-term investment for you depends on a few major factors. So before you buy into the hype, we recommend you use this simple guide to cut through the sales jargon and determine if solar panels are actually worth the money.

How to determine if solar is worth it

As you start exploring your solar options, there are a few questions you can ask to help determine whether solar makes sense, including:

How much do you pay for electricity?

Your current electricity bill is the largest factor in determining how much you’ll save by installing solar. You pay your utility company for every kilowatt-hour (kWh) of electricity you use, and your rate varies significantly depending on where you live. In some parts of the country, you can pay as little as 8 cents per kWh; in others, you’ll pay 20 cents or more.

When you go solar, you effectively install a mini power plant on your roof to replace the power plant where your utility gets its electricity. That means homeowners with high electricity rates from their utility are the ones who save the most when they switch to home solar power.

If you’re just getting started and aren’t sure how much solar can save you, start out by using an online Solar Calculator. EnergySage’s calculator incorporates local electricity rate data to give you a customized estimate of what you can expect to save, and just how quickly your investment will pay off.

is solar worth it? calculator result

How much does the solar panel system cost?

Installation prices will vary significantly depending on the solar company you choose and the equipment you install. While cheap solar panels might feel like the easiest way to save some cash, your total 20-year savings will often be higher if you invest in high-quality equipment. It’s worth taking some time to review all of your equipment options and find the right combination of price and quality for your home. You can use an online solar marketplace like EnergySage to easily compare all of your offers in one place, the same way you’d shop for a flight online.

Don’t forget to research the solar incentives and rebates available where you live: they can reduce your net cost by 50 percent or even more. The federal government offers a 30 percent solar tax credit, and many states and municipalities have additional financial incentives for their residents. Some utilities even offer cash rebates to their customers to encourage them to go solar.





are solar panels worth it graphic




How are you financing your solar panel system?

Whether you choose to buy or lease your solar panels will have a major impact on your system’s long-term value. If you have enough to make a purchase in cash, you’ll save more than with any other option – but even with a $0-down solar loan, your savings could still be in the tens of thousands. While solar leases and power purchase agreements (PPAs) require no money down and promise a maintenance-free option, they come with a trade-off: your total savings will typically be just 10 to 30 percent of your utility electricity bill.

How does this play out in the real world? This screenshot from the EnergySage Solar Calculator for an example property in Massachusetts shows the difference in long-term savings between a cash purchase, solar loan, and a solar lease.

is solar worth it? financing chart

Are solar panels worth it if you’re not in the sunny Southwest?

While solar loves sunlight, you might be surprised to learn that you don’t have to live in the sunny Southwest to achieve lots of solar savings. In fact, some of the states with the most installed solar in the country (including New York, New Jersey, and Massachusetts) are in the Northeastern U.S. – more famous for their cold snowy winters than sunny summer days. Why is this? These states often have higher electricity costs and better local incentives than elsewhere in the country.

Three Tips for Solar Shoppers

  1. Homeowners who get multiple quotes save 10% or more

    As with any big ticket purchase, shopping for a solar panel installation takes a lot of research and consideration, including a thorough review of the companies in your area. A recent report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) recommended that consumers compare as many solar options as possible to avoid paying inflated prices offered by the large installers in the solar industry.

    To find the smaller contractors that typically offer lower prices, you’ll need to use an installer network like EnergySage. You can receive free quotes from vetted installers local to you when you register your property on our Solar Marketplace – homeowners who get 3 or more quotes can expect to save $5,000 to $10,000 on their solar panel installation.

  2. The biggest installers typically don’t offer the best price

    The bigger isn’t always better mantra is one of the main reasons we strongly encourage homeowners to consider all of their solar options, not just the brands large enough to pay for the most advertising. A recent report by the U.S. government found that large installers are $2,000 to $5,000 more expensive than small solar companies. If you have offers from some of the big installers in solar, make sure you compare those bids with quotes from local installers to ensure you don’t overpay for solar.

  3. Comparing all your equipment options is just as important

    National-scale installers don’t just offer higher prices – they also tend to have fewer solar equipment options, which can have a significant impact on your system’s electricity production. By collecting a diverse array of solar bids, you can compare costs and savings based on the different equipment packages available to you.

    There are multiple variables to consider when seeking out the best solar panels on the market. While certain panels will have higher efficiency ratings than others, investing in top-of-the-line solar equipment doesn’t always result in higher savings. The only way to find the “sweet spot” for your property is to evaluate quotes with varying equipment and financing offers.

For any homeowner in the early stage of shopping for solar that would just like a ballpark estimate for an installation, try our Solar Calculator that offers up front cost and long term savings estimates based on your location and roof type. For those looking to get quotes from local contractors today, check out our quote comparison platform.


This post originally appeared on Mother Earth News.

12 thoughts on “Are Solar Panels Really Worth It?

  1. Glenn

    Thanks for the details you have shown above.

    What about the environmental impact? What is the environmental impact of making solar panels vs environmental impact using fossil fuels to create equivalent power over a 20 year time period? This could be an important factor in the evaluation of whether “Is Solar really worth it” or not.

    Reply
    1. Sara Matasci

      Hi Glenn,

      We have a couple pieces that look about the environmental impact of solar, as well as the sustainability of solar panels. Take a look:
      Solar Panel Lifespan: Recycling and Sustainability Issues
      The Energy Payback Time of Solar Panels

      The short answer: a solar panel generates enough emissions-free electricity to offset the emissions from its manufacturing in six months. Panels generate power for 25-35 years, so they are definitely a more environmentally friendly option.

      –Sara
      Content @ EnergySage

      Reply
      1. Glenn

        Sara, two great articles. That really makes a difference to me and clarifies even more the importance of using solar panels for power generation over traditional methods even if you live in a lower priced power region. Thanks for your reply. Very interesting.

        Reply
  2. Ed Bangle

    I MAY MAKE A YOUTUBE ON THE PROCESS OF GOING SOLAR. Here is what I did and it did give me peace of mind on the purchase, because it is not yet cheap as some imply.

    1. Gather 12 months of household energy bills. Add up the wattage used for the entire 12 month period. I had 8,300 kws and spent $2,000 for the whole year which equates to $150 / mo.

    2. Match panels with the answer to #1 above. I went the route of using the latest systems instead of string, SMA and Optimized systems. The system I chose was LG 320 watt panels with enphase microinverters and the enphase monitoring system.

    I had to create a math on this and it works for me.

    320 w x 18 panels = 5,760 watts or 5.7 kw
    5.7kw divided by 20% = 4.6 kwh – kilawatts per hour (20% is due to power connector losss, dirty panels, cloudy days, etc.)
    4.6kw x 5.2 hours in a day = 24 kw per day
    365 days x 24kw = 8,760 kw per year

    8,760 is greater than my 12 months at 8,300 kw per year energy bill.

    That is my assessment.

    3. Shop around with Solar Companies. I invited at least 3 and toyed with doing it myself. With the Federal Tax incentives I was able to buy my system for about $15K. Now I know that may seem expensive but the Solar company fixes the entire system over 12 year period, provided that the panels go down more than 10% of what it is delivering.

    IMPORTANT: DON’T BUY MORE THAN WHAT YOU USE UNLESS YOU ARE ADDING MORE TOYS TO THE HOUSE LIKE A SWIMMING POOL FOR EXAMPLE. My Energy provider was questioning the 6% extra power I was receiving. Can you imagine that? But I realize energy companies DO NOT like people going solar mainly for the reason of losing revenue. But look at the way of green. It does make sense and I do not have to destroy the future of the world on the account of my weather changes.

    Just my two cents.

    Reply
  3. HLSpencer

    How about those of us who receive our power from water? We have some of the lowest power rates in the US, receiving our power from the Niagara River – Niagara Falls, and we live in NY, a state with the highest rate of corruption in the US.

    Reply
  4. Jessie

    I looked into solar for my home a few years ago. I wanted to sell extra electricity back to the power company. What I was told from the solar company that gave us a bid was that the power company will buy your solar electricity from you for a whole lot less money than what they will sell their electricity to you for. I would not really be using my own solar electricity. I would buy the marked up electricity from the power company that came through into my home on one electric meter and they would buy my reduced price solar electricity from another meter on my house. If you do not want this, you will have to go totally off grid and have batteries for storage. Is this really correct???

    Reply
    1. Eugenia Zinovieva

      I’m confused. Why would you be buying electricity from the power company if you provide it all through your solar panels and just sell the excess to the company?

      Reply
      1. Michael

        I spoke with a solar company yesterday. I live in south East Texas. I was told that during the day the solar panels will produce excess energy and feed / store it into the grid ( you will need a two way Meter installed by your power company for this to work.) This excess energy is stored like credits. At night you do not make any energy but your house will still use energy. In less you solar system has batteries your house will get its electricity from the grid. Think of it like a bank. You put power into a savings account and take it out when you need it. My particular power company will only buy back the power if I happen to produce an excess of 80% of my monthly bill, so for example if I normally use 100 kilo watts , I would have to produce 180 kilo watts in order for the power company to buy back the excess watts at a reduced rate. This would be very costly to install enough solar panels to produce that much excess power and you would get very little return on your money since the power company generally buys power at the same price it cost them to produce it.. I’m sure all this information varies from state to state, but in my opinion its best to try and cover 60 to 80 percent of your monthly bill with solar panels.

        Reply
  5. Rene

    I”m really close to agreeing to getting solar panel’s.but my question is this,my first design was going to give me a 108% to offset my electric bill’s monthly with 22 panel’s.I found out that after a roof audit I was going to need a heavier line to connect to the panels @ a extra $10.000.well were not doing that,so they came back with a second design that would give me 62% offset with 14 panel’s.so would I be ok with that plan.is 62% better then nothing.is it still worth committing to.this would be a purchase plan.

    Reply
    1. J

      I would check other companies. Something does not sound rite. In New Mexico I can go to 120% on our home it will cost about 31,000 but the catch is the more energy I produce monthly the more your monthly bill is. So bigger is not better you want to go with the amount that you will actually need to use otherwise you are producing more energy than you will use and then you pay for it reguardless if you use it or not. The company we spoke to said if you need more energy they can always come back and add panels accordingly but if you get to many panels up front and decide you don’t need to produce that much energy after all they will not remove them because the holes that are created in your roof present a liability to the company once they remove them.

      Reply
  6. Henry Callin

    There is also a if factor to consider. Solar panels are definitely more worth it if you are using the electricity as it is being generated. If you are gone during the day and come home it is not really worth it because it won’t offset your electric rates if you’re not utsing it as it is generated. Unless you have a battery of course it that is just more money

    Reply
    1. Jim

      @Henry;
      If you’re enrolled (qualified for) “net metering” through your normal electricity utility company, your excess energy is “banked” for you, which you would then get from the grid for your night-time electricity needs. At the end of the month, your provider would charge you their normal rates for the “net” difference between what you “banked” and accessed later or credit your account for excess energy you banked and didn’t need to draw from.
      That said, utility companies want to (and in some areas, already have) do away with your right to use ner metering. If that becomes the standard, then solar users would need to install expensive battery backup units to access their own excess energy.

      Reply

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