Over the past decade, rooftop solar use has exploded around the country as home solar becomes a very popular investment. Homes and businesses across the country are transitioning away from a fossil-fueled electricity grid towards a clean energy economy, driven by a need to reduce emissions in a time of global climate change. Amidst this period of energy reform, rooftop solar panel systems for houses are taking off at a remarkable rate. It’s time to give residential solar the credit it deserves. Learn everything there is to know about the booming residential solar industry in our list of home solar FAQs.
Everything you need to know about home solar panel systems in 12 questions
Residential solar panels are one of the best ways to save money in the long term and create a positive environmental impact. Before you go solar, here are 12 key things to keep in mind:
1. How much has the price of residential solar dropped in recent years?
If you’re an optimist looking for feel-good statistics, the cost of solar electricity in the past decade is a great place to start. U.S. solar installation cost has dropped by around 70 percent over the past 10 years. In the last year alone, the residential market saw a five percent decrease in cost. There’s no question that solar has evolved from a cleantech commodity to a sensible home upgrade that millions of Americans are considering. Getting solar panels on your roof is one of the smartest decisions you can make in today’s age.
2. What do residential solar panel systems typically cost?
The answer to this question depends on state and system size. However, there is data that can help you estimate what solar panels cost in the U.S. The easiest way to calculate the cost of solar electricity across different system sizes is in dollars per watt ($/W), which indicates how many dollars solar will cost per watt of available electricity production. In 2021, homeowners are paying an average of $2.81/W. To put that figure in perspective, in 2008 the average cost of solar was just over $8/W. For an average 6kW system, a price of $2.81/W means you’ll pay approximately $16,860 before tax credits and rebates.
3. Will my solar panels be connected to the grid? What is net metering?
The vast majority of home solar systems will be connected to the grid. With grid-connected solar, net-metering serves as an efficient solution to the question “how will I power my solar home at night?” Net metering is a solar incentive where you receive bill credits when your solar system overproduces electricity. During times when your panels aren’t producing enough electricity, you can use those bill credits to cover the cost of your grid electricity use.
If you are off-grid, you won’t have access to electricity from your utility. This means that, in order to build a completely off-grid project, you will need energy storage capabilities, an extra-large solar panel system, and provisions for backup power to cover you when your panels don’t get enough sun.
4. Can I finance my rooftop solar panel purchase?
There are many options when it comes to financing a rooftop solar panel system purchase; the main three are a cash purchase, solar loans, and solar leases or power purchase agreements (PPAs).
If you can afford it, paying in cash for your rooftop solar panel system is the most surefire way to save money over the lifetime of your system. With full ownership of your panels and no interest to pay on a solar loan, you’ll usually see the highest return on a solar investment with a cash purchase.
Want to own your system from the get-go, but need assistance with that upfront cost? A solar loan might be right for you. Solar loans lower the up-front cost of your rooftop solar system to $0, so you can “buy” your system and then pay off your loan in monthly increments. For many solar shoppers, your monthly loan payments will be similar to your electric bill before solar.
Solar leases and PPAs require no money down, but the catch is that you do not own your solar system; you are only hosting it for a third party that sells you the electricity it produces for a fixed rate. Importantly, when you enter a solar lease agreement or PPA, you are not entitled to any tax incentives because you don’t own the system.
Take a more detailed look at solar financing to learn about which option is best for you.
5. How long does a residential rooftop solar system take to install?
Once you have met with the installers and done all necessary site visits and planning, the actual installation of your home solar system will only take a few days of work. The exact time depends on a number of factors. For example, if you are setting up net metering, that process will tack on additional time until your panels are properly connected to the grid. Overall, while the decision process for solar panels can take some time, the installation timeframe is very quick and fairly simple.
6. How can I tell if my home qualifies for rooftop solar panels?
There are a few things to consider when scoping out your home for rooftop solar. One factor to consider is the direction and tilt of your roof – although this is not a hard and fast rule, rooftop solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees.
It’s also important to know how much sunlight your roof gets throughout the day. Solar panels need sunlight to produce electricity, so if your roof is shaded or otherwise obstructed by trees, chimneys, or anything else, that will impact how viable solar is for you.
Check out our article on solar panels and shade to learn more.
7. Can you get a solar panel system for your home if your roof doesn’t qualify?
Perhaps one of the most exciting aspects of the residential solar sector is the list of options for homeowners who want to go solar but do not have a suitable roof. Ground mount solar installations and community solar gardens are two common ways to access power from the sun without actually installing anything on your rooftop. Community solar involves connecting with members of a group or your neighborhood to share a solar system, while ground-mounted arrays are an easy way to own and install your own system while bypassing any roofing hurdles.
8. What are the tax credits for residential home solar systems? Who qualifies?
There are two simple ways to think about tax credits for solar panels. The major tax credit associated with solar panels for home is the federal investment tax credit (ITC), more commonly known as the solar tax credit. The ITC gives you a tax credit equal to 26 percent of the total cost of your system, as long as you buy the system. The next option will be state solar tax credits, such as New York state’s tax credit that cuts an additional 25 percent off the price of the residential system. Depending on which state you live in, the opportunity for beneficial tax breaks and solar programs could be significant. Some states and municipalities also offer other more complex options that will be case-specific – do some research into SRECs and other location-specific solar rebate programs.
9. Does solar make sense if I don’t plan on being in my home for 25 years?
A common concern for homeowners who are considering solar is, “What happens if I move after installing solar panels?” A typical solar panel system lasts for 25 to 30 years. If you don’t plan on owning their house for that long, you may wonder if solar still makes sense. The good news is that solar increases the value of your property and can actually expedite the process of selling the property when the time comes. The housing market is filled with buyers excited by the prospect of acquiring a solar home that comes with the benefit of zero utility bills.
10. What percentage of your home can you power with solar electricity?
Ideally, the answer to this question would be 100 percent. However, although a solar panel system can theoretically offset all of your energy use, it’s not realistic to expect that level of panel production every day of the week. Manufacturers and installers often recommend that homeowners factor in a 25 percent cushion when calculating their target for solar panel offset. The main reason for this: solar panels cannot operate at maximum efficiency all the time. There will be certain days when grid connection is necessary to fully cover your power usage. However, the beauty of net-metering is that you can benefit from surplus production days and never pay anything to your utility while still relying on the grid for backup storage.
11. When will your home solar system reach the “break-even point”?
Many homeowners are very interested in calculating their solar panel payback period, which is the amount of time it will take for electric bill savings to offset the cost of solar panel installation. The expected breakeven point ranges across the country, but on average, U.S. homeowners break even on their system cost after about 8 years.
12. What is the difference between solar for business and solar for home use?
A commercial solar project might power a town or a company’s operations. As a result, they vary dramatically in terms of scale and cost. By comparison, residential solar systems tend to hold a consistent size (between 6 and 12 kilowatts on average). Thanks to their relatively small scale, rooftop solar panels for homes are an attainable energy upgrade that can generate serious electric bill savings for homeowners at any income level. Commercial solar, on the other hand, necessitates a major investment and a collective group of investors.
Figures like this illustrate why the residential sector might be the hottest in the solar industry. When solar panels are installed for home, the ROI is high and the payback period can be very short despite the upfront cost. If you’re looking for a personalized estimate for what solar would cost you, try our free Solar Calculator. Once you’re ready to start comparing quotes from local, pre-screened installers in your area, register your home on the EnergySage Solar Marketplace and let the bidding begin.