This is a good time to install solar power! The cost is dropping and technology is enabling greater efficiency – that’s more energy for less money. Plus, your options for buying, leasing, PPA (see below) are expanding, and many homeowners are getting solar installed for zero down.
Based on recent data from the US National Renewable Energy Laboratory (NREL), the average installed solar power system costs $19,600 to $27,370.
|Small Home||Average Home||Large Home|
|Home Size||1-2 bedrooms||3-4 bedrooms||5+ bedrooms|
|System Cost||$14,000 to $22,540||$19,600 to $27,370||$25,200 to $38,640|
|After Tax Credit||$9,800 to $15,778||$13,720 to $19,159||$17,640 to $27,048|
Tax Credit: The federal tax credit is 30% through 2019, 26% in 2020 and 22% in 2021.
These figures are based on the NREL’s finding that the cost of photovoltaic (PV) solar power systems is $2.80 to $3.22 per watt (or $2,800 to $3,220 per kW). Most homes with 3 or 4 bedrooms require a 7kW to 8.5kW system to meet their demand for electricity.
Did you Know? Data compiled by the International Renewable Energy Agency (IRENA) shows that the cost of PV solar energy has dropped by 73% since 2010 and is expected to drop by another 50% by 2020.
Pro Tip: Find additional cost savings in your area. Many energy companies and state programs offer rebates and credits for the installation or renewable energy equipment.
Solar power systems definitely qualify. Call your local energy provider or search the Database of State Incentives for Renewables & Efficiency.
Factors that Affect Solar Power System Cost
Your solar panel system cost will be determined by:
System size: Your solar power contractor will take several factors into consideration when sizing the system. The number of bedrooms in a home allows a rough estimate. How much sun your climate experiences, your home’s longitude and latitude and how panels must be placed directionally on your roof will be considered.
Roof issues: You’ll see slightly higher installation estimates for second-story roofs (or higher), ceramic/concrete tile roofs, slate and similar materials that make mounting the panels difficult.
Where you live: Cost of living realities affect solar power system prices, just as they affect the price of all consumer goods. This representative chart gives you an idea of varying costs across the country. The current average cost is $3.01 per kW.
Three Important Installation Considerations
Is your roof suitable for solar panel installation? Let’s examine three factors that will determine whether your current roof is a good candidate for a solar power system:
- The Age of your Roof
It wouldn’t make sense to paint a classic car without first replacing rusted-out panels, right? It’s similar with a roof. The warranty on most solar panel systems is 25 to 30 years.
While panels can be removed to allow for re-roofing a home, that’s too expensive to be reasonable. It’s more cost-effective to install panels on a roof that will last the lifetime of the solar power system.
For existing roofs, consider solar panel installation on:
- 3-tab asphalt shingles that are brand new
- Dimensional asphalt shingles less than 5 years old
- Wood shakes/shingles less than 5 years old
- Composite roofing less than 10 years old
- Clay and concrete tiles less than 10 years old
- Metal less than 10 years old
Pro Tip: You can “cheat” 5-10 years on this if you’re willing to replace your solar equipment sooner than 20-30 years. You might consider that as an option for this reason: The solar technology that will be available in 15-20 years promises to be far more efficient (more solar energy per the size of the panels), lower in cost and probably better looking too!
- The Weight of Existing Roofing Materials
Asphalt shingles weigh 1.5 to 4.5 pounds per square foot. If you add a second layer of shingles, your roof might not be able to support solar panels and mounting equipment. This might be a more serious issue where heavy snow loads are common.
Panels and their mounting brackets weigh an average of 3-4 pounds per square foot. With the heaviest shingles considered, that’s a total of 12-13 pounds per square foot. — This is another reason to consider removing old roofing material before installing solar panels. The weight will be far less, and removing old roof material is a good time to inspect and repair a roof deck.
Did you know? Most building codes allow for up to 15 pounds per square foot of roofing material. However, if the roof has been damaged by water or excess humidity or if it is quite old, it might sag under a load of even 8-12 pounds per square foot.
Pro Tip: Have a certified structural engineer inspect your home’s roof structure including any bracing that’s been added in the attic. And if you’re also replacing your roof before solar installation, consider steel. It combines the lightweight strength to support solar panels and the longevity to outlast them.
- Whether your Roof Gets Enough Sun
The ideal roof for solar is one facing south with enough slope to properly tilt the panels and enough room for them.
A west-facing roof is second-best ahead of an east-facing roof.
If you have a flat or low-slope roof, brackets can be installed to give your panels proper tilt. Some panels can be effectively installed on walls, though you might not like the looks of that.
A solar energy contractor can quickly determine whether your roof is a good candidate for a solar power system or what alterations to the roof or system will improve its performance. Significant alterations might increase your cost beyond the averages given above.
Solar Roof Options when Re-roofing Your Home
If you’re tearing off the old roof to start fresh, you have multiple solar roof options to consider. These include conventional PV solar panels and a new category of PV products, building integrated photovoltaics, or BIPV. Buying, leasing and PPAs expand your options. Here are top options and details.
Conventional PV Solar Systems:
First Solar is one of the leading manufacturer of PV solar technology. It currently offers Series 4 and Series 4A PV 122.5 watt modules, and Series 6 420-445 watt modules. Both products have an efficiency rating of 17% and meet extended durability tests such as Thresher and Long-term Sequential.
First Solar modules are backed with a 10-year product warranty plus a 25-year linear performance warranty that guarantees a degradation rate of just .5% each year. Starting at 98%, that means the system will make at least 85.5% of that power in year 25.
There are other high-quality brands. The more important consideration is finding an experienced solar contractor to install and properly set up the system for maximum performance.
Sunrun solar has a unique approach. Its motto is “solar your way.” The company doesn’t manufacture solar equipment. Instead, a consultant from Sunrun evaluates your home’s energy usage and assists you in tailoring a system to suit your requirements.
The solar power system can be purchased or leased. Another alternative is known as a PPA or power purchase agreement. Sunrun installs a solar power system on your roof at its cost.
The power it makes is pushed to the grid, and Sunrun is compensated for it. Then, the company sells you power at about 80% of what it would typically cost, so there’s a 20% savings.
Sunrun has connected almost 200,000 home and business owners with the best solar equipment for their purposes. It says current costs are $3.63 to $3.75 per watt, or $15,000 (4kW) to $29,000 (8kW) for most homes.
Vivint Solar offers the same services as Sunrun. It also provides loans for solar in a limited number of states. See Paying for your Solar Power System below for additional options.
Building integrated photovoltaic (BIVP) systems:
Tesla solar roofs are the brainchild of Elon Musk, the man behind the Tesla electric vehicle and the SpaceX spacecraft company.
Tesla tiles are tempered glass with a lifetime warranty. Two types of glass tiles are made: Solar tiles equipped with a solar cell and non-solar tiles.
Tesla states that its roof will cost $24-$28 per square foot, though the exact figure continues to change as the tile production is underway and the first Tesla roofs are being installed.
3 IN 1 ROOF BIPV solar tiles are set to be released in 2019. These innovative roofing tiles are made from closed-cell polyurethane foam topped with a cementitious coating.
The tiles prevent heat gains inside your attic. When your attic stays cooler in summer, the home beneath requires less air conditioning. Total energy savings of up to 38% are built into the roof in this way.
Additionally, when you’re running the AC less, the size of the solar power system can be reduced. If, for example, you install a Tesla roof and need an 8.5kW system, you might only need a 7kW system with a 3 IN 1 ROOF.
A 3 IN 1 ROOF is expected to cost about $22 per square foot. Both solar tiles equipped with a solar cell and non-solar tiles are produced.
Like a roof employing traditional solar panels, Tesla and 3 IN 1 solar tile roofs require an energy storage battery and converter. The percentage of solar and non-solar tiles a home requires for either product is determined by many factors including climate, home size and roof configuration.
CertainTeed Apollo II is a BIPV system employing monocrystalline solar cells with a 60-watt per cell power rating.
CertainTeed claims this is, “the most energy per square foot of any solar tile”. The standard Apollo II is a solar shingle that blends fairly well with asphalt shingles.
The Apollo Tile II features the same technology in a tile designed to blend with flat concrete tiles. Both install directly on your roof sheathing with standard deck screws.
Apollo II cost is not publicly known at present, but rumored to range from $30 to $60 per square foot installed, with various factors involved. At that price, Apollo II shingles and tiles cannot compete with Tesla and 3 IN 1 ROOF, so expect CertainTeed to drop the price significantly or get out of the solar tile industry.
CertainTeed does make standard solar panels, the CertainTeed Solstice line that offers a choice of mono- or polycrystalline panels. Black or silver framing and black or white backsheet are options, plus either string or microinverters.
PowerHouse solar shingles are the creation of Dow, and the product had a good run starting in 2009 before being discontinued in 2016.
Perhaps it was ahead of its time. However, the technology has now been licensed to solar energy company RGS (Real Good Solar) based in Denver.
The introduction of PowerHouse 3.0 BIVP roofing is set for late 2018 into 2019, starting in about 12 states, presumably Colorado and surrounding western states.
RGS Energy Advisor Josh Gosey tells us the goal is to be cost-competitive with Tesla Solar, and we’ll keep you posted as PowerHouse ramps up production and installation.
Thin-Film Solar Laminates:
The flexible panels are ideal for a range of Fabral metal roofs. The panels are installed at the factory to ensure straight, centered lines. No penetrating fasteners are used.
MiaSolé uses copper indium gallium selenide (CIGS) thin-film technology for low-profile installation. Fabral claims efficiency of 13.2-17.3%. Warranties are 5 years on workmanship with a 25-year warranty against the degradation of efficiency.
Paying for your Solar Power System
If you’re applying for a loan to cover the cost of your system, there is a unique opportunity you should be aware of. It’s called PACE.
PACE is the Property Assessed Clean Energy Program PACE “programs allow a property owner to finance the up-front cost of energy or other eligible improvements on a property and then pay the costs back over time through a voluntary assessment.”
The amount of the monthly payment is determined using an energy assessment of the cost savings from using solar.
In short, PACE funds the purchase of the system. In most cases, the amount of energy cost saved annually is sufficient to make the loan payments.
The PACE program works with private lenders that agree to tailor loans to fit PACE guidelines. Use this map to find a PACE lender.
Did you know? The unique characteristic of PACE is that the loan is attached to the property rather than an individual.
When the home is sold, the new owner agrees to continue with the payments until the loan is paid off. The seller is no longer attached to the loan.
Solar Energy System Payback Period
The payback period of solar is the time it takes to recoup your investment through electricity cost savings.
As the cost of solar energy has dropped, so has the payback period. Let’s determine payback period for a net zero home – one in which the annual cost of electricity from an energy company is $0.
According to the most recent data from the US Energy Information Agency, the average monthly electric cost for US homes is $112.59, or $1,351.08 annual cost.
We’ve listed the average per watt cost of a solar power system as $2.80 to $3.22 per watt, or $2,800 to $3,220 per kilowatt (kW).
The average system size is about 7.5kW, so the average time it takes for a solar power system to pay for itself is 15.5 to 17.9 years.
If you like crunching the numbers, this chart has monthly electricity cost data for all 50 states. It will allow you to calculate the payback period for solar energy systems where you live.
Did you know? There is a second “payback period” discussed in solar energy. Many, including popular solar energy websites, confuse the two.
The second use of “payback period”, according to the NREL, answers the question, “How long does a PV system have to operate to recover the energy—and associated generation of pollution and CO2—that went into making the system, in the first place”?
The answer given by the NREL is 1-4 years depending on solar cell type. If you read that “a solar energy system will pay for itself in 4 years or less,” that author has confused the two payback period definitions.
While the second payback period is an important environmental question, it has nothing to do with the economics of installing a solar energy system on/in your home.
Net metering: This is essential to making your payback period as short as possible. With net metering, you are charged for electricity used from the grid and paid for excess electricity you generate that is pushed onto the grid.
Here’s more on net metering from the Edison Electric Institute, or you can contact your energy provider for details. 38 states now have mandatory net metering regulations.
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