is solar worth it

Are solar panels worth it in 2022?

In this article, we’ll help you answer the question: “Is it worth it to buy solar panels?” For most people, solar panels are worth the investment, but they may not be right for you in some rare circumstances. However, even renters may have solar options if their property owners or managers are open to it.

Key takeaways


  • The amount you’ll save by going solar will vary based on factors including how much you pay for electricity, how much your installation costs, how much energy you use, what rebates and
  • Virtually everyone has solar energy options, regardless of if you’re a homeowner, renter, or leasing their business property.
  • The amount you’ll save by going solar will vary based on numerous factors.
  • Most property owners will see a return on investment in less than 10 years.
  • You can maximize your solar savings by shopping around and learning more about your options.

Visit the EnergySage Marketplace today to see how much you can save by going solar.

What’s in this article?

When solar panels are worth it, and when they aren’t

Solar panels are usually most worth it if:

  • You own your property. Renters or business owners who do not own their property should speak to the property owner prior to making any plans to install a solar system.
  • You pay a high price for electricity. The higher your electric rate, the faster your solar panel system will save you money. These days, solar shoppers “break even” on their solar investment in seven to eight years.
  • You get a good price for solar. In 2022, an average 10 kilowatt (kW) solar panel system costs about $20,000 on the EnergySage Marketplace. Prices on EnergySage are usually lower than market prices, so you know you’re getting a good deal.

If you fit these criteria, solar panels are probably worth it! What’s more, even homes and businesses that don’t meet these points perfectly can benefit from solar with the right installation (or community solar subscription).


When are solar panels not worth it? Home solar may not be right for you if: 

  • You rent your property. Instead, try community solar, which doesn’t require you to install solar panels on your property.
  • You pay a low price for electricity. The primary way solar saves you money is by offsetting electricity costs with free electricity generated from the sun. If you’re already paying a low rate for electricity, you may not “break even” on your solar investment for a very long time.
  • You’re paying too much upfront for solar. Just like already having a low electricity rate makes solar less worth the investment, so does paying too much upfront. Be wary of solar installers charging high prices – the best way to make sure you’re getting a good deal is to compare solar quotes (for free!) on the EnergySage Marketplace.

The key takeaway is this: if you own your home and have an electric bill, solar panels are probably worth it! Just how much money you can save varies for every property, but with the cost of solar panels continuing to come down, you’ll be saving money in the long run.

How much will you save with solar? Estimating your costs and savings

The first question you’re probably wondering if you’re considering going solar is: how much money will you save? And for good reason! After all, solar is an investment, so you’ll want to understand your payback period before making any decisions. The average home can save between $10,000 and $30,000 over the lifetime of your solar panel system. Most property owners will break even on their solar investment in seven to eight years – but as you start exploring your solar options, there are a few key questions you should ask to approximate your personal return on investment:

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. The first step in identifying your savings potential with solar is knowing how much electricity you use, and the rate you are paying for it. 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, like the South, you can pay under 12 cents per kWh; in others, like the Northeast, you could pay 20 cents or more. When you go solar, you reduce or eliminate your monthly electricity bill, so the amount you pay for electricity substantially impacts your savings.

If you’re not sure where to start in determining your solar savings, try using our Solar Calculator. Our calculator incorporates local electricity rate data to provide you with a customized estimate of what you can expect to save, and just how quickly your investment will pay off.

How much will your solar installation cost?

There’s a lot that determines the cost of your solar panel system, so you’ll want to do a bit of research first. Some of the biggest factors that will impact your array’s cost – and ultimately how much you save – include: 

  • System size: How much electricity you consume correlates with how much energy you will need to produce, and therefore the size your solar array needs to be – and generally, a bigger system with more panels will have a higher average cost than a system with fewer panels. 
  • Equipment: while cheaper solar panels may feel like the easiest way to save on your solar system, oftentimes your long-term savings will be greater if you invest in high-quality equipment. 
  • Roof characteristics: if you have a south-facing single roof plane that slopes at a 30-degree angle, it’s ideal for solar! This doesn’t mean solar isn’t worth it if you don’t have a perfect solar roof, but your installation may be a bit more complex (and therefore cost more) and your sun exposure might be less direct (meaning potentially less savings). 
  • Labor: solar installers can vary substantially in price, even if they’re installing the same equipment. Different installers vary in their labor warranties and skill levels, which is why it’s important to find pre-vetted, high-quality installers, like you can on the EnergySage Marketplace.
  • Location: solar prices differ from state-to-state – generally, you’ll see a lower price per Watt ($/W) in warm states and a higher $/W in cold states, but you may need a larger system size in a warm state. Other important factors that impact your solar savings and vary by location are rebates and incentives, which we’ll cover next.

What rebates and incentives are available? 

Rebates and incentives significantly reduce your cost of solar and can actually put money into your pocket each month, translating to substantial long-term savings. The best solar incentive is the investment tax credit (ITC), which allows you to deduct 26 percent of your solar installation cost from your federal income taxes – There’s no cap on its value, but your individual tax liability will determine whether you’re able to take full advantage of this incentive. 

Depending on where you live, you may also qualify for other various incentives that help you save more: in addition to the ITC, local incentives like state tax credits, cash rebates, solar renewable energy certificates (SRECs), and performance-based incentives (PBIs) can increase your solar savings up to 50 percent!

Net metering is one last policy to keep in mind, and it’s one of the most important ones in the residential solar industry. Essentially, it allows you to store any excess energy produced by your solar system in the electrical grid for use at a later time. With net metering, you won’t receive a monthly payment: instead, you will receive utility bill credits for the electricity produced by your solar panels. It’s important to note that not all states offer net metering, so you’ll want to check out the Database of State Incentives for Renewables and Efficiency (DSIRE®), which tracks net metering and other policies.

How will you pay for your solar system?

Whether you choose to buy or lease your solar panels will have a major impact on your savings. If you have enough to make a cash purchase, you’ll save more than with any other option – but even with a zero-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? Check out the EnergySage Solar Calculator to see how your long-term savings will differ depending on whether you choose a cash purchase, a solar loan, or a solar lease – or community solar, if that’s something you’re considering!

Are you planning on selling your property in the next ten years?

If you plan to move in the near future, purchasing a solar system may not be worth the investment. Instead, consider options like community solar that don’t lock you in to panels on your roof for decades. Leasing your panels may be an option, but keep in mind that leases are typically long-term and can be difficult to cancel

Estimating your solar payback period

The initial costs of solar panels are often the biggest consideration when going solar, leading many homeowners to question whether solar power is worth it. While most homeowners can expect their investment to pay off in under ten years, you can get a more specific estimate with a few calculations. If you want to calculate a rough estimate for how long it will take for solar panels to pay for themselves, you can use this formula:

(gross solar system cost – upfront incentives)/(annual savings + additional state and/or utility incentives) = estimated payoff period

calculation for solar panel payback period
Calculation for solar panel payback period

Here’s an example: 

Your new solar system costs $15,000, and you received a tax credit of $3,900 in addition to a $1,500 rebate from your state. In this case, your gross solar system cost is $15,000, with the upfront incentives totaling $5,400. This means that your combined cost is $9,600. 

calculation for net cost of solar panels
Calculation for net cost of solar panels

Now, say that your power bill is $100 every month, and your solar system produces enough energy to cover your energy needs. Your annual savings is your monthly power bill multiplied by 12 months, meaning in the first year of having solar, you’ll save $1,200 on your electricity bills. Some states and utilities also provide incentives that pay you extra for the solar energy your panels generate, like SRECs or the SMART program in Massachusetts: it’s not uncommon for those incentives to put an additional $600 a year into your pocket beyond your electricity savings, meaning an annual benefit of $1,800.

By dividing your combined cost of $9,600 and your annual benefit of $1,800, you can get a more realistic estimate of your payback period. In this example, that’s a little less than five and a half years. 

3 ways to maximize your solar savings

So, most likely, you’ll save money by going solar – but how can you maximize those savings? We have a few tips to help you get the most out of your solar system:

1. Get multiple quotes

As with any big-ticket purchase, shopping for solar requires a lot of research and consideration, including a thorough review of companies in your area. By comparing multiple solar quotes, you will get increased competition for your business and transparency, which will ultimately mean a higher quality installation at the right price. 

Data from the EnergySage Marketplace shows that when you receive multiple solar quotes through EnergySage, you’ll save 15 to 25 percent on the cost of solar compared to going solar outside of EnergySage. A 2017 report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) backs up our findings: when consumers compare as many solar options as possible, they typically avoid paying inflated prices.

2. Check out smaller installers

These inflated solar prices often come from some of the larger solar installers in the industry – so it’s important to consider all of their solar options, not just the installers large enough to pay for the most advertising. The same 2017 NREL report referenced above found that quotes from large installers were typically 10 percent higher than those from mid- and small-sized installers. If you receive quotes from some of the bigger companies in the industry, just be sure to compare them with quotes from local installers so you don’t overpay for solar. 

3. Compare equipment options

Getting multiple solar quotes will also allow you to compare the equipment offered by each of those installers. There are many variables to consider when seeking out the best solar panels. 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 best system for your property is to evaluate quotes with varying equipment and financing offers.

To compare the equipment options offered by EnergySage installers, make sure to visit our Buyer’s Guide

Frequently asked questions

There’s a lot more to know about solar than just “are solar panels worth it.” Here are a few other questions people commonly want answers to about the worthiness of solar panels:

How much do solar panels cost?

As of 2022, solar panels cost about $20,498 for a 10 kW system. That includes the generous 26% federal solar tax credit, but not additional local rebates and incentives you may be able to take advantage of.

How long does it take for solar panels to pay for themselves?

Most property owners who get solar quotes on the EnergySage Marketplace will break even on their solar investment in seven to eight years. After that, you’ll be generating free electricity and racking up the savings!

Should you wait to buy solar panels?

Even though the cost of solar panels continues to fall, it’s usually not worth it to wait. The longer you wait to go solar, the more savings (opportunity cost) you’re missing out on. In the long run, it’s worth it to go solar as soon as possible for most shoppers instead of hoping for a much lower price down the road.

Why should you not get solar panels?

There are some situations, such as already low power demands or a home that has too much shade, where a solar system isn’t ideal. In some cases, a home may require extensive renovations to support the weight and needs of a solar energy system.

Are solar panels worth it in your area?

Solar is worth it in most areas! However, factors such as available incentives, the climate, home size, how much shade there is, and the amount of sun that a region gets all affect how quickly you’ll break even on your solar investment. Take a closer look at your options in our article on the benefits of solar.

How to decide if solar panels are worth it

If you think you’re paying too much for electricity, chances are, solar is worth it for you! As a first step, try out our Solar Calculator tool to see just how much you could save by installing solar panels.

If you’ve decided that solar is worth it, check out the EnergySage Marketplace to maximize your savings! You’ll receive up to seven quotes from our network of pre-vetted solar installers, which will allow you to compare installers and equipment. If you’re still not convinced or are unable to install solar on your property, you can also take advantage of solar savings by joining a community solar farm on the EnergySage Community Solar Marketplace.

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About Emily Walker

Emily is a Senior Writer at EnergySage, where she's an expert in making energy fun and easy to learn about! She has a background in environmental consulting and has degrees in Environmental Science and Biology from Colby College. Outside of work, Emily is pursuing a Master of Science from Johns Hopkins University in Environmental Science and Policy. She also loves hiking, tending to her collection of houseplants, and trying out new restaurants and breweries whenever possible.

83 thoughts on “Are solar panels worth it in 2022?

  1. Teddy

    Right now, my energy usage is low. About 600 kWh a month. Let’s say I invite all the electric car owners in my neighborhood to plug in and charge at my house. Now I am using 2000 kWh monthly.
    According to a solar company, I can throw a 24,000 kWh system on my roof since my electric bills prove such.
    Then I tell all those car owners to beat it and our usage goes back down to 600 kWh. Will I be penalized for producing too much energy? I am now banking an extra 1400 kWh monthly.
    Anyone have experience with this?

    Reply
  2. William Johnson

    I had Solar put in 4 yrs ago. Would I do it agaein? NO…NO..NO WAY!!!!. If you add up the cost of install minus Incentives, it will take many yrs to pay off. This wood be ok if you got money back on the sale, but there is a good chance you want. I live in Arizona, I put my house up for sale due to health and what was I told by several ( not just 1 or 2 ) realtors ” It really doesnt add value” and most people don’tt want it. On top of it all, they don’t tell you the cost you need to add in when your roof needs repair or replaced. Add this in and definitely is not worth it. Removing it will not effect the cost of may house so I’m at that point of removing the system and taken it with me .( I refuse to give away something that cost me that amount of money)

    Reply
  3. Chris Pederson

    You surprised me when you explained that you don’t need to live in a sunny place to get a lot of solar savings. A ton of people are overlooking this I imagine and assume that only people on the coasts save money with solar. I hope to be able to save money on my energy bill each month and I live in a place with a lot of rain so I’m hoping it works out.

    Reply
  4. YOUSEF S ZUMUT

    My roof consists of several segments and the largest can take 4 panels. I need a total of about 22 panels. Those will be all over the different segments facing the sun at different angles and inclinations. Do you see a good power/panels efficiency coming out of this config, or, just forget about solar?

    Reply
    1. Steve

      The company I used had two programs that worked from Google Earth. One showed overall annual generation factoring in panel placement. We are lucky and have a large, un-interrupted south facing roof segment that has 24 panels at max efficiency. We could have added 3 more panels on our west facing roof but those panels would be 30% less efficient and not worth it. All this came from their planning tools (FYI, they guarantee the system will generate the power quoted). I’d get a quote and see if it makes sense. A friend in Denver area got a quote that was more expensive than my system and generated 40% of the power. Same issue you have with multiple roof segments plus he has. some tall trees that shadow parts of roof during the day.

      Reply
  5. John

    With the price per KW from the power company it is not worth it. The average KW in FL is .084 cents the average cost to produce a KW with solar in Florida $2.50. Don’t be fooled! Do the numbers with your electric bill. I bought a house that already had panels so no out of pocket for me. I am still taking the off the panels when we redo our roof not worth putting holes in a $14,000 roof. On a perfect day sun shinning my 5KW system will produce 20 KW x 30 days = 600KW my power company charges .09 cents a KW so 600 x .09= $54 a month on a perfect day for 30 days. I wanted to believe in solar and still do but its just not there yet. PLEASE do yourself a huge favor and run the real time numbers off your power bill before you invest a bunch of money and possibly put holes in your roof.

    Reply
    1. Lance

      Solar panels are expensive, no doubt. BUT I’m getting more than enough out of my panels to over 100% offset the grid.

      I do have a solar loan to pay at 1.49% interest for them, but the bottom line is my payment on my solar loan is LOWER than my payment to my power company was. That’s a win in my book no matter how you spell it.
      Then factor in that my power company increases its rates every year and Solar (at least for me in my area) is a bargain.

      Reply
    2. John

      Thank you. Solar sounds so sexy but in FL with the cheap power and hurricane threats, I think the solar roof tiles may be the only viable option when they become standardized.

      Reply
    3. Steve

      Agree. And make sure you get full value net metering (credit for producing more power than you use). My system generates over 90% of our power annually (even with clouds and snow in Chicago). With Illinois and Federal incentives the payback is 6-7 years to break even. But after that I have no electricity cost and if I sell, I’ll find a buyer who understands that those cost saving result in a “free” mortgage payment.

      Reply
    4. Dara B

      Your calculations are incorrect and you’re conflating kW (the size of a PV system – a kilowatt is an instant measure of power and the size of the system is the number of panels multiplied by the wattage of each panel – so a 5kW system might have 20 x 250 watt panels ) and kwhs (power over time – this is what your utility bill measures and charges you for each month – the number of kwhs you used). There’s a standard formula to calculate how many kwhs your 5kW system will generate in your geographical location in a average year. You can use the industry standard PVWatts calculator (pvwatts.nrel.gov/) to put in your address, the size of your array (in kW), the azimuth of your panels (what direction they face in), the slope of your panels, the shading factor on your panels (how much shade they get throughout the year), the efficiency of your equipment, and a few other details (if you want to get down to nitty gritty) and calculate how many kwhs will come out of your 5kW system on average each year. For example, I just entered Miami (no specific address), 5kW system, facing due south, at a 20 degree slope, with minimal shading (I used 3 percent), and left everything else as the default values – it calculates your system would generate 7761 kwhs/year. This means that using your information above, your 5kW system saves you about $700 each year on your electric bills. I’m actually reading that average price/kwh in Florida is 11.5 cents so that 7761 kwhs/yr will actually save the average Floridian close to $900/year. I don’t know about state solar incentives for solar but the system will be eligible for the federal tax credit of 26% of the cost of the system. And the system should continue producing for 30 – 40 years (with manufacturers warranties on the major components of 25 years standard in the industry now).

      Reply
  6. BOBBY MONTALVO

    I have spoken to and had an inspector from FREEDOM FOREVER Company. How are they rated in Texas? I live in Pearland Texas, near Houston.

    Reply
    1. Sharon Pole

      i had freedom install my solar panels in California and I was impressed with the operation, I had 5 other solar companies come out and they tried acting like they were engineering another wing on my house, I highly suggest them

      Reply
  7. Austin Anderson

    Solar energy is experiencing massive growth in Boise. In large part, the growth is thanks to Boise solar incentives. These are being given by the government, state and utility companies to people or businesses that choose to go solar. We have some of the least expensive energy rates in the country. That may also be why we consume a bit more energy than the national average. So even with our low electric rates we still see higher than average electric bills across Idaho. With solar Idahoan are able to lower their monthly expenses while working towards true ownership of their solar system. There are 4 main financial incentive programs in Idaho for clean energy consumption and we want to talk about all of them!

    Reply
  8. Darryl Morgan

    My neighbor got into Solar Panels and says she is regretting it. It is too costly for her and she has even considered refinancing her house just to be able to afford it and even called in a Lawyer to get out. Are Solar Panels that costly for everyone or was it just the specific company she went into?

    Reply
    1. Troy Skerrow

      It’s a company thing, the company I am familiar with offer both purchase and lease with 0 to little down and you lock in a monthly rate for 20 years. Look up sunrun if you have any questions or want information reach out.

      Reply
  9. Corina Pier

    How do you know if your solar panels are working they aren’t saving us anything on our electric bill I’m very confused this is why we bought this house it has solar panels all over the roof you were thought we would save money please help

    Reply
  10. James Powell

    My mother in law put in solar panels at her house in Southern California and instead of paying an electricity bill the city pays here for the extra power he is producing. I just wish we had the sun in Oregon for this investment to make sense.

    Reply

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