is solar worth it

Are solar panels worth it?

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Like any major investment, installing a solar system is a big decision! But, as the cost of solar continues to decline, this decision is becoming easier and easier: for most people, going solar now represents a smart long-term investment with substantial savings. However, before installing a solar panel system, you’ll want to make sure that you can take advantage of these benefits by first considering a few major factors. In this article, we’ll help you decide if solar panels are worth it for you.


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, what rebates and incentives are available to you, and how you choose to finance your system.
  • Most property owners will see a return on investment of seven to eight years.
  • You can maximize your solar savings by collecting multiple quotes, checking out local installers, and comparing equipment options. 
  • Visit the EnergySage Marketplace today to see how much you can save.

How much will you save with solar?

The first question you’re probably wondering if you’re considering going solar is: how much money will you save? And for good reason! Afterall, solar is an investment so you’ll want to understand your payback period before making any decisions. 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. 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 system’s cost – and ultimately how much you save – include: 

  • System size: the more electricity you consume, the bigger the system size you’ll need – and generally, a bigger system with more panels will cost more 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.

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


Solar loves the sun, but you don’t have to live in the sunny Southwest to achieve solar savings! In fact, solar systems can sometimes cost more in these areas because you need a larger system to cover your electricity needs due to air conditioning. Some of the states with the most installed solar in the country (including New York, New Jersey, and Massachusetts) are in the Northeast – even though they’re more famous for their cold snowy winters than their sunny summer days! These areas often have higher electricity costs and better local incentives than other states, leading to greater savings down the line.

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 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!

What about net metering?


Net metering is one of the most important solar policies and incentives 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!

How can you 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:

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.

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. 

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 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 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

Start your solar journey today with EnergySage

If you’ve decided that solar is worth it for you, 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.


This article was adapted from a post that originally appeared on Mother Earth News.

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About Emily Walker

Emily is the Content Manager & Research Analyst at EnergySage, where she enjoys 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.

76 thoughts on “Are solar panels worth it?

  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. 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
  3. 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
  4. 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
  5. 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
  6. 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
  7. 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

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