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Why Are Solar Panels So Expensive

Solar 101/
man installing solar panels on roof

If you’re thinking about purchasing solar panels for your home, you probably know that they can be quite expensive. In the long run, yes — a solar system pays for itself as you accumulate savings on your electric bills over time. And in some locations in the United States, homeowners can expect a payback period as soon as five years. So while the initial investment is high, going solar is worth it.

Let’s look at a breakdown of costs for solar panels and systems so you can better understand why solar panels are expensive. Learn more about precisely what you’re paying for, as well as tips to help you reduce the initial cost.

What Goes into the Costs of a Solar Panel System?

Comparing a quote for a complete solar installation versus the cost of the solar panels alone might surprise you. Ultimately, the price of a residential solar system includes a lot more than just solar panels.

One solar panel alone can cost anywhere from $200 to $600, depending on the brand, power output and design. But you’ll need more than one solar panel to power your home. You’ll also need inverters and racking to complete your functioning system, and setting up these components requires time and labor.

Read more: Calculating Solar Panel Costs

Solar Power System Component Costs

Solar panels produce DC electricity, but your home runs on AC power. This means that your solar power system requires an inverter (or inverters) to convert the DC electricity to AC electricity, so you have useable power.

Roof mounts or ground mounts are essential solar array components. A racking system is required to the panels in place for stability. (You wouldn’t want your solar panels to slide off the roof as soon as a breeze blows by!)

Be sure to factor in the cost of inverters and racking when you calculate the overall of going solar.

Pro-tip: DIY solar panel kits include all the critical components of a solar system: panels, inverters and racking. Browse solar panel kit prices to get a total ballpark cost of parts and equipment.

Solar Installation and Labor Costs

Professional solar installation can be expensive. Working with a solar installation company or an independent contractor can cost you just as much (or even more) as the system itself.

Solar panel installation costs cover wages for installers and high workers’ compensation insurance rates due to the nature of the installation process, which involves climbing on roofs, working with electrical systems, and taking safety precautions.

Good news, though — it’s possible to save thousands of dollars on solar installation costs if you’re willing to take the DIY route with your installation. The DIY approach is easier than you think (and don’t worry — you can still get professional help where you need it), and you can set up your solar system within one or two weekends on your own.

To learn more about whether do-it-yourself solar is right for you, chat with a DIY solar expert at GoGreenSolar.

How Much Can You Expect to Pay for Solar Panels?

Ultimately, solar panel systems will cost homeowners anywhere between $10,000 to $30,000 depending on home size, system size and other add-ons. This cost can vary significantly due to numerous factors.

Solar Installation Location

Solar installation pricing varies from state to state. California, Colorado and New York are higher at $2.75 to $5.00 per watt. States like Arizona and Florida are lower at $2.50 to $3.75 per watt for installation.

Everyone in the United States who pays income taxes is eligible for the federal tax credit, which is currently 30% of the solar panel system cost for systems installed before 2032. There are also local tax incentives and rebates, such as the SREC, that could reduce the overall cost of your solar installation. Check with your state or local government for more information.

Learn more: Solar Incentives, Rebates and Tax Credits

Finance Costs

You don’t have to pay for the entire system upfront. Solar leases and loans help you go solar with a lower initial investment. However, keep in mind that the financing fee on these options will increase the overall cost of your renewable energy system over time. If you’re able to pay for your system in full, you’ll reap the payback benefits faster.

Site-Specific Costs

A rooftop solar installation will cost more if you have a very steep roof or a brittle clay tile roof, for example. For ground mount installations, issues like long conduit trenches or granite in the footing locations require more labor and increase your solar installation costs.

How Solar Panel Functionality Affects Cost

Not all solar panels are the same. Here are a few factors that affect the cost of solar panels.

Solar Panel Aesthetics

Solar panels with sleek black frames and black backsheets are stylish, but good looks come at a higher price per watt.

Solar panel aesthetics might matter more if you’re installing the system at the front of your house. But if the solar installation is on a back roof or in a place where it isn’t visible, you can save money by opting for a less stylish solar panel.

Solar Panel Efficiency

High-efficiency solar panels are pricey, so it is crucial to determine if efficiency is something you genuinely need. The most significant advantage of high-efficiency solar panels is that they generate more power with a smaller footprint.

If your roof space is limited and you’re looking to offset your entire electric bill, you may want to consider high-efficiency solar panels to maximize your power production. If space isn’t an issue, or your home gets plenty of sunlight, we suggest you save your money by purchasing standard efficiency panels.

Solar Panel Warranty

Warranties vary among solar brands. Most have a 25-year power guarantee, but some guarantee more power (less degradation) in those 25 years than others. Workmanship warranties on the manufacturing defects can vary from 10 years to 25 years. Better warranties come at a higher price per watt, so you’ll need to decide if extended warranty periods are worth the extra investment.

Solar Panel Brand Name

Finally, solar panels made by a trusted manufacturer with longstanding business will cost more than other solar panel brands. But it may be worth it to know that name-brand solar panels adhere to industry-leading quality standards and have warranties backed by stability.

The Past and Future of Solar Panel Costs

Yes, solar panels are expensive, but costs are currently at an all-time low — great news for homeowners considering switching to renewable energy. There’s never been a better time to go solar.

Note that while prices are low today, it’s unlikely that they’ll continue to drop more due to the base costs of materials and the manufacturing process. Furthermore, prices could rise again with the current global material shortages and supply chain issues.

Installation prices have remained relatively steady over the years, but there’s also a good chance they will rise with ongoing labor shortages and increases in wages.


The initial cost of a solar panel system may seem high, but once you curb the initial sticker shock, you’ll find that solar power is an excellent investment.

With payback periods as short as five years and expected output and power production for at least 25 years (under warranty), you can reap the benefits of clean energy for years to come.

Ready to get started with solar? Check out our easy Solar Panel Calculator to figure out your home’s system size, and contact an expert at GoGreenSolar for a complete estimate.

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