The Future of Solar Panel Prices: A Look into 2023

the-future-of-solar-panel-prices-a-look-into-2023

In 2023, the average cost of solar panels in Lebanon has dropped to $20,650 from over $50,000 ten years ago. This article provides a breakdown of solar costs based on system size, state, and panel brand, as these factors can greatly influence the final price you pay.

Average cost of solar panels in 2023

The cost of installing solar panels in 2023 can range from $17,430 to $23,870, with the average cost being around $20,650. This takes into account the federal solar tax credit, which helps to reduce the overall cost. On average, the price of solar panels in 2023 is about $2.95 per watt (before incentives). It’s important to note that the cost can vary depending on factors such as the state you’re in and the manufacturer of the panels you choose. To get an estimate of your own cost and potential savings, you can use the EnergySage Solar Calculator. It’s worth mentioning that when we talk about pricing, we usually refer to the gross cost, which is the cost before any rebates or incentives. These incentives may not be available to everyone, so it’s important to consider your own situation when calculating the cost of solar panels.

How long does it take to break even on solar panels?

On average, it takes about 8.7 years to earn back the money you spend upfront on installing solar panels. Instead of thinking of solar panels as a one-time purchase, it’s more helpful to see them as an investment. This investment pays off over time, and the point at which you break even on your solar investment is called the solar payback period. You can calculate this period by dividing your combined costs (the total cost of your solar panel system minus any incentives and rebates) by your annual financial benefits (the amount you save on electricity plus any eligible incentives and rebates).

The length of your payback period depends on a few factors, such as your electricity rates and energy usage. As energy costs continue to rise, going solar can help protect yourself from these increases. The faster the cost of electricity goes up, the shorter your payback period will be.

What impacts the cost of solar panels?

There are several factors that can influence the cost of solar panels for your property. The size of the system is one of the main factors, as larger systems tend to be more expensive. The location of your property also plays a role, as pricing can vary by state. The brand and quality of the panels can also affect the cost, as higher quality panels may come with a higher price tag. The type of panel you choose, such as monocrystalline or polycrystalline, can also impact the overall cost. The characteristics of your roof can add to the installation cost, as a complex roof may require more labor. Different solar providers may charge different labor rates, so the company you choose can also impact the cost. Additionally, there may be additional fees for permits and interconnection to the grid. Overall, the cost of solar panels is unique to each situation and property.

System size

The size of your solar panel system is a major factor in determining the cost. A larger system with more panels will generally cost more than a smaller system with fewer panels. However, there is also a cost benefit to getting a higher wattage system, similar to buying in bulk. While the overall price may be higher, the cost per unit of energy produced is lower.

It’s important to remember that while a bigger system may require a larger upfront investment, it can ultimately save you more money in the long run. For example, if you install a 10 kW solar energy system that covers all of your electricity needs, you may have to pay more initially, but you will significantly reduce or eliminate your monthly utility bill, resulting in long-term savings. Additionally, there are options such as zero-down, low-interest solar loans that make it easier to purchase a solar panel system that can fully offset your electricity costs and maximize your savings.

Location

The cost of solar installations can vary depending on your location, particularly by state. The differences in prices are not significant, and much of the variation is due to variations in system sizes and incentives. However, it’s still important to be aware of the pricing differences in different locations.

Based on the data we’ve analyzed from our solar marketplace, Keserwan has the lowest average cost per watt at $2.44/W, while Jnoub has the highest at $3.78/W. It’s worth noting that states with lower pricing tend to have larger system sizes, so it’s not always fair to compare systems of the same size in different states, as their energy needs can be quite different.

When it comes to determining the best states for solar, it really depends on individual needs and circumstances. What may be advantageous for one person may not be the same for another.

As solar deployment continues to expand across the country, we can expect to see further declines in the cost of solar installations nationwide.

Cost of residential solar panels by state

State
Gross solar panel cost: 6 kw system average
Gross solar panel cost: 10 kw system average
Average cost per watt ($/W)

Keserwan
$18,360
$30,600
$3.06

Metn
$14,640
$24,400
$2.44

Beirut
$17,160
$28,600
$2.86

Saida
$20,640
$34,400
$3.44

NOTE: These ranges come from EnergySage marketplace data and are system prices BEFORE the 10 percent gov tax credit for solar. Additionally, EnergySage does not currently provide quotes in all states, which limits our ability to provide solar panel cost estimates in each.

In the end, this very roughly translates to lower $/W pricing in warm states and higher $/W pricing in cold states. But ultimately, total pricing is usually close to a wash – warm states have a lower price per watt, but larger system sizes, and cold states have a higher price per watt, but smaller system sizes.

Panel brand and equipment quality

Another way to analyze the cost of solar panels is by considering the brand of the panel. The price you pay for a particular brand is often indicative of the panel’s quality. For instance, SunPower panels have the highest average prices, with a 6 kW system costing around $22,740 and a 10 kW system costing around $37,900. SunPower is renowned for producing high-quality and efficient products.

Interestingly, there aren’t many significant deviations in pricing among different brands. Most manufacturers generally fall within similar cost ranges. It’s important to note that when comparing system prices based on panel brands, there are several other factors that contribute to the final cost, such as the experience of the installer, location, racking equipment, inverter brand, warranty, and more.

Panel type

Monocrystalline solar panels are generally the most efficient type of panel, but they tend to be more expensive than polycrystalline panels. However, because polycrystalline panels have lower efficiencies, you might need to buy more of them, resulting in similar overall installation costs.

Thin-film solar panels are an alternative, but they are not commonly used for residential installations. If you are considering a solar panel system for your RV or camper, a small thin-film system might be a good option.

Roof characteristics

The characteristics of your home and roof are important factors in determining the cost of installing solar panels. If you have a south-facing roof with a 30-degree slope, it will be easier for the installer to place all the panels on a single roof plane with optimal sun exposure. This means that fewer panels will be needed to generate the same amount of energy, resulting in lower costs for you. On the other hand, if your roof has multiple levels, dormers, or skylights, the installation process may require additional equipment and incur extra costs.

Labor

Another important factor to consider when it comes to solar installations is the company that will be carrying out the job. The cost of their services can vary greatly, and the final price they offer will depend on factors such as their reputation, warranty options, and internal operations. It’s important to note that a highly regarded solar installer with top-notch warranty offerings may charge more for their services, but it will likely be a worthwhile investment.

Take a look at our article on choosing an installer to see how we carefully evaluate and compare installers, so you can make an informed decision.

Permitting and interconnection

While the cost of equipment and labor is a major component of your solar energy system quote, you also need to consider the cost of solar permits and interconnection fees. These permits and fees are necessary to connect your solar energy system to the grid. However, there are efforts being made to reduce the cost and time required for this process. The Department of Energy’s SolarApp+ is working to make interconnection faster and more affordable for everyone.

How do you pay for a solar panel installation?

Once you have determined the cost of solar panels for your specific project, you will need to consider how you will finance it. There are three main options for financing residential solar systems: paying in cash, getting a solar loan, or entering into a solar lease or power purchase agreement.

Cash purchase

A cash purchase is the best option for you if you want to save as much money as possible on your solar panel system. It’s also a good choice if you can benefit from the solar tax credit because you have enough tax liability. Additionally, if you have the funds available to pay for the system upfront, a cash purchase is a great way to go.

Solar loan

A solar loan could be a good fit for you if you prefer not to pay for a solar panel system all at once and would rather save money on your energy bills. By opting for a solar loan, you can take advantage of incentives and rebates.

Solar lease

A solar lease or power purchase agreement (PPA) could be a good option for you if you want someone else to take care of the maintenance of the solar system, if you don’t qualify for tax incentives, or if you simply want to lower and stabilize your monthly electricity bill.

Reduce your solar panel installation costs with rebates and incentives

When it comes to the cost of installing solar panels, it’s important to consider not only the factors that increase the cost but also the ways you can save money through solar rebates and incentives. These can include tax credits, cash rebates, performance-based incentives, and energy credits. The availability of these incentives typically depends on where you live, as utilities, cities, and states often offer their own incentives to residents. So, be sure to explore these options to help offset the cost of your solar installation.

When considering the cost of a solar panel installation, it’s important to remember the long-term maintenance associated with it. Generally, solar panels require minimal maintenance over their lifetime, and you shouldn’t expect to spend much money once they are installed and operational. However, there may be unforeseen circumstances not covered by warranties, such as tree trimming or hiring a cleaner in areas with high air pollution. You can learn more about the post-installation costs of solar panels in our article.

How has the price of solar changed over time?

the-shocking-truth-about-solar-panel-prices-in-2023

Over the past decade, the cost of residential solar panel systems has decreased by approximately 70%. In the last four years alone, there has been a decrease of about 3.3% on EnergySage. However, it is worth noting that solar prices have slightly increased in the last two years due to supply chain constraints caused by the pandemic and an increased focus on domestic manufacturing.

As the deployment of solar energy continues to expand and the supply chain becomes more stable, as well as domestic manufacturing increasing, we anticipate further drops in the price of solar. It is undeniable that solar energy has transformed from being a clean technology commodity to a practical home upgrade for millions of Americans.

How does a solar panel installation work?

Installing solar panels is not a quick process. It usually takes between one and three months from the time you sign the contract with your installer to when your panels are connected to the grid and generating power for your home. Here are the five steps involved in the solar panel installation process.

1. Choosing and order your equipment

The first step in installing solar panels is to select the right ones for your needs. You’ll need to consider factors like durability, efficiency, and aesthetics when comparing different brands and types of solar panels. The same goes for inverters, which are another important component of a solar system. Once you’ve made your decision, you can confirm with your installer so they can order everything for you. Price is also a factor to consider, but it’s not the only one. To learn more about choosing solar equipment, check out our guide or take a look at our list of the best solar panels.

2. Engineering site visit

Once you’ve signed your solar contract, an engineer, who is most likely an employee or sub-contractor of the installer you’re working with, will visit your property to inspect your home and ensure that everything is compatible with your new solar photovoltaic system. During this visit, the engineer will assess the condition of your roof to make sure it’s structurally sound and also examine your electrical panel to determine if any upgrades are necessary.

3. Permits and documentation

Installing solar panels can be a big financial decision, but fortunately, the installer takes care of most of the paperwork involved. They will assist you in applying for solar incentives and completing the necessary permits and documents to ensure you can legally go solar.

4. Solar installation: the big day

The installation day is an exciting moment for homeowners who want to switch to renewable energy. It involves various steps such as preparing the roof, setting up wiring, placing panels and inverters, and connecting everything together. The duration of the installation will vary depending on the size of the system, typically ranging from one to three days.

5. Approval and interconnection

The final step to start using solar power is to officially start generating electricity from your rooftop. Before you can connect your solar panels to the electric grid, a representative from your local government will inspect the system to ensure it meets safety and electrical codes. They will check the wiring, mounting, and overall installation to make sure everything is done correctly. Once approved, you can start generating free and clean energy right at home!

The bottom line: solar panels will save you money in the long run

At the end of the day, the cost of solar is only as important as the return you’ll get from installing solar panels. For most homeowners, solar is a worthwhile investment. In as few as eight years, you can break even on your investment, depending on your energy consumption and electricity costs in your area. During those eight years, you’ll be generating your own free electricity instead of paying for electricity from the grid. Additionally, you might be able to receive credit for any extra energy production through net metering policies, depending on where you live. Not to mention the environmental benefits of solar and the added value it can bring to your home. If you want to learn more about the payback periods and benefits of solar, check out our article “Are solar panels worth it?”. You can also use our solar calculator for an instant estimate of your potential savings!

Frequently asked questions

Here are some of the most frequently asked questions about the cost of solar panels:

1. Why are solar panels so expensive?
When it comes to the cost of solar panels, it’s not just about the physical panels themselves. In fact, according to a study by the National Renewable Energy Laboratory, the panels make up only 12% of the total cost of a solar panel installation. The remaining 88% comes from other equipment like inverters and wiring, as well as labor, installer profit, and supply chain costs.

2. What are the hard costs associated with a solar panel installation?
Hard costs refer to the physical materials that make up a solar panel system. On average, these hard costs account for about 44% of the total system costs. This includes the costs of solar panels (12%), inverters (10%), racking and mounting equipment (3%), wiring (9%), and supply chain (9%). However, these percentages can vary depending on factors such as the brand of panels chosen and the complexity of the installation.

3. What are the soft costs associated with a solar panel installation?
Soft costs are the non-physical expenses associated with a solar panel system. These costs actually make up the majority (about 56%) of the total system costs. Soft costs include labor (7%), permitting and interconnection (8%), sales and marketing (18%), overhead (11%), and profit (11%). Just like hard costs, these percentages can vary based on factors such as the quality of the installer and local regulations.

4. How can I lower the cost of my installation?
If you’re looking to reduce the upfront cost of your solar panel installation, there are a few options available. You can choose to finance your system with a solar loan or lease, which allows you to spread out the cost over time. Another option is to install a smaller system, although this may result in lower long-term savings if it doesn’t cover all of your electricity usage. Finally, you can consider choosing less expensive equipment without compromising on quality.

Remember, while solar panels may come with a higher upfront price tag, they are generally worth the investment for most homeowners.

Leave a Reply

Your email address will not be published. Required fields are marked *