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A Breakdown of Solar Panel Installation Costs

Solar 101/
Person installing solar panels

In the United States, the national average cost for a residential solar energy system is $12,000 (after the federal tax credit). However, you’ll find that this number can vary immensely depending on the solar panels or kit you choose, the size of your system, your location, and who you choose for installation.

This article will cover a realistic percentage breakdown of solar panel installation costs. We’ll also share some tips on saving money with your solar system and installation.

Solar Panel Installation Cost Breakdown

How much does it cost to have solar panels installed? Here’s what you can expect:

  • Solar panels are approximately 25% of your total cost
  • Inverters are approximately 10% of your total cost
  • Racking, mounting and BOS are approximately 10% of your total cost
  • Installation and soft costs are approximately 55% of your total cost.

Let’s take a closer look at the costs of each component.

Solar Panels: 25% of Solar Installation Cost

The cost of solar panels varies from $.70 to $1.50 per watt. (While the difference seems nominal on paper, you’ll need to multiply that per-watt cost by the total wattage of all your solar panels combined.)

Here’s what impacts the cost per watt of a solar panel:

Solar Panel Manufacturer

Factors like the brand’s reputation, their number of years in business and the quality standards they employ in their manufacturing process will all affect solar panel costs.

Solar Panel Warranty

Extended warranties or warranties with more benefits will result in a higher cost per watt. It’s up to you to decide if a generous warranty is worth the higher price. Learn more on our blog here.

Solar Panel Efficiency

Higher efficiency means higher power output in a smaller space, but these panels are significantly more expensive. We advise using high-efficiency solar panels only if you have limited space for your solar panel installation. Otherwise, you’ll be able to save quite a bit of money.

Solar Panel Aesthetics

Solar panels with black backsheets and frames look great on your roof, but they cost more. Opt for aesthetic solar panels if you’re planning to install them on the front of your home or if you have limitations with your neighborhood or HOA.

Number of Solar Panels

The number of solar panels you need doesn’t affect the cost per watt but will affect the overall cost of your solar system. Check out our Solar Calculator to determine how many solar panels you need and find the best system size.

Read more: What Is the Cost of Solar Panels? Calculating Solar Panel Costs

Inverters: 10% of Solar Installation Cost

Inverters convert DC power to usable AC power for your home’s energy needs. Expect to pay around $.30 - $.40 per watt for your inverter(s). Factors that affect cost include the inverter brand and solar system size.

Some solar inverters, like the latest Enphase microinverters, cost a little more but come with some great features and benefits and are easy to install.

Racking, Mounting and BOS: 10% of Solar Installation Cost

Every solar energy system must include either a roof racking or ground mounting system, plus its attachments. The cost of these parts will vary based on your home’s roof material or the racking and mounting option you choose.

You’ll also need BOS or balance of system pieces. These include grounding hardware, system labels, junction boxes, disconnects, combiner boxes, wires and conduit, which you can obtain from your local home improvement store.

The cost of racking and BOS pieces are specific to your location but generally run about $.25 - $.50 per watt.

Installation and Soft Costs: 55% of Solar Installation Cost

Over half of your total cost — often up to $2.00 per watt — might go to the professional solar installer. These costs cover things like:

  • Labor and wages
  • Worker’s compensation insurance
  • Permitting fees
  • Interconnection fees
  • Indirect corporate costs, especially if you’re working with a major solar company primarily looking to profit.

How to Save Money on your Solar Panel Installation

Next, we’ll cover a few tips on saving money with your installation.

Don’t Forget to Take Advantage of Tax Credits and Rebates

Make sure to install your system before the year ends and the federal tax credit changes.

If you are looking to finance your solar panel installation, choose a financing option that allows you to take advantage of the federal tax credit. Most solar lease options don’t offer this benefit.

Lastly, check for state or local rebates for solar installations.

Read more: An Overview of Solar Incentives, Rebates and Tax Credits

Carefully Evaluate Financing

It’s best to pay for your entire solar system upfront, but you can finance your solar system if you’re unable to.

Remember, there is always interest associated with borrowing money and financing items. Solar leases and loans often span 20 years, so read the fine print regarding interest rates and whether or not you’ll even get the federal tax credit. You may want to consider a home equity loan versus a solar-specific loan instead.

Opt for DIY Installation

A DIY solar installation is a great way to save nearly half of your total solar costs.

Keep in mind that you’ll still have to pay for things like permitting and interconnection fees. However, you can significantly reduce or eliminate labor costs and corporate costs, which will make a major difference in the total cost of your system.

Learn more on our blog, DIY Solar: Is It Worth It?

Try a Hybrid DIY Installation

Not comfortable doing a complete installation? You can still save money by doing some parts yourself and getting help from a contractor when needed.

Get Expert Help

When it comes to solar panel installation, you’ll want to do it correctly the first time. Using incompatible equipment or making errors during installation is dangerous and can cost you in the long run.

To ensure the process goes as smoothly as possible, work with a skilled and knowledgeable solar installer like GoGreenSolar.

The folks at GoGreenSolar are industry veterans and DIY experts. If you’re looking to save with your installation but want expert help by your side, GoGreenSolar is the way to go.

By choosing GoGreenSolar for your system and DIY installation, you’ll be able to save thousands and feel confident about installing your system right the first time. Learn more: Why Choose GoGreenSolar?

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