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Rooftop solar panels used to be luxury items–but that's no longer the case. Whether you want to save thousands on electric bills, lower your carbon footprint, or fully electrify your home, going solar is almost always the right decision if you own your home.
Adding solar panels is a great long-term investment. It can boost your home's value and minimize your electric bill. It's also a big purchase, so it's important to make sure it will pay off before you make a final decision.
Below, we'll explain how to decide if solar will work for your home, and how to get solar panels at the best price. It all comes down to your roof, how much you pay for electricity, and your eligibility for incentives.
You don't need to live somewhere warm or with abundant sunshine to save with solar.
Most homeowners will save tens of thousands of dollars by going solar.
Solar panels aren't free, but they do come with great incentives.
The best solar equipment for you might not be the best solar equipment for your neighbors.
There are ways to go solar without installing a single panel on your property.
The average U.S. household spends about $1,697 annually on electricity, according to electricity cost and consumption data from the Energy Information Administration (EIA). Over 25 years, that adds up to $52,800 (assuming 2.45% annual inflation). You can easily lower (and sometimes even eliminate) these costs by installing a rooftop solar panel system.
Most households need a 10 kW system to fully cover their electricity usage. In 2023, a 10 kW solar panel system costs $21,070 upfront including installation costs and the federal solar tax credit (more on that later). This is a hefty price tag, but when you consider how much you otherwise would've spent on electricity, it's easy to understand why millions of homeowners have gone solar.
Solar is a long-term investment – shoppers on the EnergySage Marketplace typically break even in about eight years. Remember that your costs and savings will ultimately depend on several factors, including where you live, how much you spend on electricity, and your home setup.
You'll get the most out of this guide if you first understand your suitability for solar. Solar panels are an excellent investment for many homeowners but aren't right for everyone. They're most worth it if:
You own your property: If you're a renter or part of an HOA, you must check with the property owner or homeowners association before making concrete plans for your solar system.
You pay a lot for electricity: The higher your monthly electricity bill, the faster you'll save money with your new solar system.
Your roof is the ideal setup: You don't need to live somewhere where the sun is always shining for solar to be worth it – but you do need a suitable roof. The ideal roof for solar is south-facing, has a tilt between 30 and 45 degrees, has plenty of open space, experiences minimal shading throughout the day, and is in good condition. If you have an east or west-facing roof, you can still go solar and expect to save thousands, you might just lose some production.
You can take advantage of incentives: The cost of solar panels largely depends on the value of incentives available, which varies based on where you live and your tax liability. If you live in a state with net metering and have enough tax liability to take advantage of the solar tax credit (more on this below), you'll break even on your solar investment sooner.
If you meet these criteria, solar will probably work for your home, but your home doesn't have to be a perfect fit for solar for you to benefit from it. Many homeowners will save money with the right installation or an alternative approach like a community solar subscription.
There's a lot of jargon when it comes to solar. Our goal is to make it easy for you to learn what you need to make your decision confidently. Here's a quick list of the top terms to know as you navigate this guide and other solar-related articles:
Watt (W): how we measure the output of a solar panel. Put simply, this is the rate of electricity production.
Kilowatt (kW): how we measure the size of a home solar panel system. A kilowatt is just 1,000 watts.
Kilowatt-hour (kWh): how your electricity usage is measured on your utility bills. This is electricity consumption over time.
Price per watt ($/W): the cost of a solar panel system based on its size, measured in W.
Production ratio: the amount of electricity produced by a solar system in one year (measured in kWh) divided by the size of the system (measured in W). This depends on factors such as the weather, climate, and condition of your solar panel system.
Semiconductor: a material that can conduct electricity more than an insulator (such as glass) but less than a conductor (such as copper). Semiconductors are used widely in electronics, including solar panels.
Photovoltaics (PV): devices that convert solar energy into electricity using semiconductors (this conversion is called the photovoltaic effect). Solar panels are photovoltaics and make up a PV system.
Solar module: another name for a solar panel (this is typically how the industry refers to them).
Solar cells: semiconductors typically made of silicon that generate electricity when exposed to photons (aka particles of light) via the photovoltaic effect. Solar panels for home systems typically contain 60 solar cells.
Explore more common solar energy terms.
We don't want to bore you with the nitty-gritty physics details, but at a high level, solar panels work by using sunlight to generate electricity through the photovoltaic effect. The process starts with solar cells, which absorb light, knocking electrons (aka carriers of electricity) loose. These electrons then flow, creating direct current (DC) electricity. Metal plates on the sides of each solar cell transfer the DC electricity to wires. At this point, inverters ( more on these below) convert the DC electricity into alternating current (AC) electricity, which most common household appliances use. And voila – your solar panels have produced solar energy for your home!
If you've determined that you're a good fit for solar, it's probably worth the investment. Like any major financial decision, going solar has advantages and disadvantages you should consider first.
You save on electric bills: The average homeowner will save between $20,000 and $90,000 over the life of their solar panel system in avoided electricity costs. If you electrify home appliances, like your heating & cooling system, car, or cooktop, you can often lower your other energy bills with solar.
Your home value could increase: Studies show that having a solar panel system increases home value by an average of 4%.
You lower your carbon footprint: Unlike fossil fuels such as coal, oil, and natural gas, solar doesn't directly release carbon dioxide or other greenhouse gasses into the atmosphere (which contribute to climate change).
It takes time to break even on your investment: On average, it takes EnergySage shoppers about 8-9 years to save enough on their electricity bills to cover the cost of their solar panel system. With some financing options, like $0-down loans, for example, you can start saving on day one.
Solar panels don't work at night: They need sunlight to generate electricity, so they don't work at night or during inclement weather. You can pair your solar panels with a battery backup system to store excess electricity produced during the day for use at night. A battery will add to the cost of the system, so you'll want to factor that into your total cost of ownership and how much savings you're hoping to achieve.
Your solar panels could (eventually) end up in a landfill: In the United States, solar panel recycling is still in its infancy, so today, most solar panels end up in landfills at the end of their lives. Some companies, like We Recycle Solar, are looking for ways to improve solar panel recycling in the future, but none of them have achieved widespread adoption yet.
While solar panels continue to become sleeker in appearance (we think they look great!), some homeowners are still concerned about aesthetics. If you fall into this category, you might consider solar shingles or solar tiles (also called building-integrated photovoltaics or BIPVs), such as the Tesla Solar Roof. While we encourage everyone to go solar in the best way for them, there are some key factors to consider when selecting solar shingles over solar panels.
Solar shingles cost more: They are still uncommon and require much more labor to install, making them more expensive than solar panels. Some manufacturers claim they excel in durability, which would earn them points for longevity, but those claims have not yet been proven.
Solar shingles are less efficient and produce less power: Solar shingles sacrifice efficiency and energy production for their sleek aesthetics because the low profile impedes airflow. If you have a large roof and room to install many solar shingles, this won't be as big a problem.
Solar shingles make the most sense if you need to replace your roof: Many homeowners choose to go solar when they require a roof replacement. You get a brand-new, more durable roof when you select solar shingles instead of solar panels. In some cases, this can be almost as cost-effective as installing a new roof and solar panels.
In most cases, you'll spend less and produce more energy if you choose solar panels over solar shingles, but ultimately, you should select the best setup for you.
If you've been shopping for solar panels for a while, you've probably heard advertisements for "free solar panels." While this may sound enticing, it's pretty misleading. There's no such thing as free solar panels. These types of claims typically refer to solar leases and power purchase agreements in which you won't owe anything upfront but won't own your system.
While you can't get free solar panels, you can often get money back from your solar power system through government incentives. Here are some of the top solar incentives that will either reduce your cost of going solar or increase your savings over time:
The federal investment tax credit (ITC) is today's best solar incentive. Unlike a tax deduction (which reduces your taxable income), the ITC allows you to apply 30% of your solar system's upfront cost as a credit toward your federal tax bill. If you've overpaid your taxes during the year, you can even receive the ITC as a refund, as long as it doesn't exceed your total tax liability. If it does exceed your tax liability, the remaining credit will roll over to the following year.
When the sun's shining, your solar panel system will likely produce more electricity than you need. Luckily, many states have a solar policy called net metering in which you'll receive credits from your local utility company for the excess electricity you send to the grid. At night or on a rainy day when your panels aren't generating enough energy, you'll pull electricity from the grid, which will count against the credits you've banked over time. At the end of your billing cycle, you'll only be billed for your "net" energy consumption (meaning your electric bills could be $0)!
Many states have additional incentives that make it even easier to go solar. You might be eligible for a state tax credit that works similarly to the ITC but for your state taxes. You could even receive an up-front rebate for installing your solar panel system. If your state has a renewable portfolio standard (meaning it's required to procure or generate a certain percentage of electricity from renewable sources), you might be able to earn additional income for the electricity your solar panels generate by selling solar renewable energy certificates (SRECs). As a homeowner, you can earn one SREC for every megawatt-hour (MWh) – aka 1,000 kWh – of electricity your solar panel system generates.
One key thing to understand as you learn about solar incentives is that your eligibility often hinges on your system ownership. If you finance your system with a solar lease or a power purchase agreement (PPA), you'll miss out on some of the best incentives available, including the ITC and state tax credits, rebates, or SRECs.
With that in mind, here are the three main ways to pay for your solar panel system:
Paying for your solar system with cash is the best way to maximize your long-term savings: You won't owe anything in interest or be subject to origination, dealer, or closing costs (which can add up!). However, many homeowners lack the cash to purchase their solar panel systems upfront. It typically takes about 8-9 years to recover the total cost in electric bill savings.
Most people choose to finance their solar panel systems with a solar loan: You'll still qualify for incentives, and you could start saving on day one if your monthly loan payments are less than your previous electric bills. Today, many companies offer $0-down loans, so you won't owe anything upfront. Overall, your savings will be lower than if you pay with cash, but using a solar loan makes it much easier for most people to go solar.
Solar leases and PPAs used to be popular ways to install solar panels at your home, but they've become less popular. With these financing options, you don't own your system, so you don't qualify for some of the best solar incentives, as explained above. As solar loan options improved, leases and PPAs generally became less appealing to homeowners.
With a solar lease, you agree to pay a fixed monthly lease payment, whereas with a PPA, you agree to purchase the power generated by your system at a set price per kWh. Your savings will be the lowest with a lease or PPA, and they can sometimes make it difficult to sell your home if the new owner doesn't want to take over the payments.
At EnergySage, one of our core values is transparency. We encourage you to go solar to save money and contribute to a clean energy future, but we don't want you to feel pressured. As you're shopping around for your solar energy system, here are some of the biggest solar scams to watch out for:
Free solar panels: We mentioned this one previously, but it's worth repeating. If a company is advertising "free solar panels," "no cost solar," or "get paid to go solar," they're misleading you. In most cases, they offer you a solar lease or a PPA.
Guaranteed savings: While you will earn significant savings by going solar in most cases, if someone tries to guarantee that your solar system will offset a specific percentage of your electric bill, it's probably too good to be true. Electricity rates, energy usage, and solar panel output fluctuate over time, making it impossible to guarantee a certain amount of savings.
Tax payout: If a company claims you can receive the ITC as a payout, they're incorrect. The ITC is not refundable, meaning if the value exceeds your tax liability, you will not receive a refund for the difference (but the remaining value will roll over to the following year). The only case in which you could receive a refund for the ITC is if you've overpaid your taxes during the year or if you're a nonprofit company.
Significantly lower costs: If you've received several quotes and one is considerably lower than the rest, it's right to be skeptical. It could indicate the system size is smaller, the equipment is lower quality, or the installer isn't reputable. You can easily avoid this by only getting quotes from vetted installers (like those on EnergySage).
The best solar panels for you might not be the best solar panels for your neighbor – but some key factors can help you compare your options:
You might have heard or seen the terms monocrystalline or polycrystalline in your solar panel research. Monocrystalline solar panels have cells made of a single silicon crystal. They're typically black in color and more efficient. Polycrystalline solar panels have cells made of multiple silicon crystals melted together. They're generally blue in color and more affordable.
Also referred to as its wattage or capacity, your solar panel's power output refers to the amount of DC electricity (aka electricity produced before the inverter converts it to usable AC electricity) it generates under standard test conditions. The higher the power output, the more electricity your panel will produce. Solar panels generally range from 350 to 450 W in quotes provided through the EnergySage Marketplace; as of 2023, our most commonly quoted power output range is 390 to 400 W.
Efficiency m easures your solar panel's ability to convert sunlight into usable electricity. The higher its efficiency, the more electricity your panel will produce. Today, solar panels generally range from about 17-20% efficiency, though some of the most popular brands on EnergySage have efficiency ratings above 21%. SunPower offers the most efficient solar panels from EnergySage installers at 22.8%.
Like most electronics, solar panels perform best when they're kept cool. Your solar panel's temperature coefficient or performance measures how much its power output will decrease as the surrounding temperature increases. For every degree above 25° C (77° F), your panel's solar production will fall by its temperature coefficient. As an example, if your panel's temperature coefficient is -0.26%/°C and the surrounding temperature increases one degree from 25° C (77° F) to 26° C (79° F), its electricity production will decrease by 0.26%. The lower the temperature coefficient, the better your solar panels perform on hot, sunny days.
As with any significant investment, you'll want your solar panels to last. Most solar panels have a lifespan of about 25 to 30 years, but the best way to guarantee your panels will continue to perform well for a long time is to select a model with a great warranty.
Generally, there are two critical components to a solar panel warranty. The product or materials warranty guarantees that the manufacturer will replace your panel if it fails due to manufacturing defects within a specified warranty term. The performance or power warranty guarantees that your panels will still produce a certain percentage of their original output by the end of the fixed warranty term. Many other factors indicate the strength of a solar panel warranty, including labor coverage, shipping overage, and bankability of the company (e.g., how likely they'll be around to fulfill your warranty).
While there are many great solar panel brands, a few companies stand out above the rest. Panasonic, SunPower, and REC all offer monocrystalline panels with high power output, high efficiency, low-temperature coefficient, and strong warranties. You will generally pay more for these brands, so in some cases, selecting a slightly lower-performing panel with a better price tag can be worth it.
We estimate that a typical homeowner needs between 15 and 25 solar panels to cover 100% of their energy needs. However, the number of solar panels that's right for your home depends on multiple factors, including the power output of your panels, the amount of energy you consume, and where you live. Here's how to calculate how many solar panels you need:
Number of panels = system size/production ratio (see definition above) / panel power output
We've mainly focused on solar panels, but another critical component of your solar power system significantly impacts its production: the inverter. Solar inverters convert the DC electricity produced by your solar panels into usable AC electricity. When selecting a solar inverter, there are three main categories: string inverters, microinverters, and optimized string inverters.
Many homeowners choose string or central inverters due to their low cost, durability, and easy maintenance. In a system with a string inverter, each panel is wired into a "string," and multiple strings (typically up to 3) connect to the inverter. All of the electricity on that string is converted at once, meaning that a drop in the performance of an individual solar panel (like from shading) will impact the output of all the panels on that string. String inverters are typically located on the side of your house, making them reasonably easy to repair and maintain. Depending on the size of your solar power system, you could require just one or a couple of string inverters.
Generally, string inverters are best for homeowners with uncomplicated roofs with minimal shading. SMA America offers one of the most popular string inverters on EnergySage.
Microinverters are a great choice if you're willing to pay more for a high-performing system. Rather than having one inverter for multiple panels on a string, with a microinverter system, you'll have a small inverter installed at each panel. These systems convert and optimize electricity at every panel, making them an excellent option for homes with shade over a portion of the roof. You can also monitor the output of each solar panel, which can help you diagnose any potential issues with your system. A downside of microinverters is that they can be challenging to maintain and repair because they're located on your roof.
Microinverters are best for homeowners with complicated roofs who want to maximize solar production. Enphase offers the most popular microinverters (and the most popular inverters overall) on EnergySage.
Optimized string inverters compromise between string inverters and microinverters, offering panel-level optimization at a slightly lower price tag. Similar to microinverters, power optimizers operate at the individual panel level. Systems with optimized string inverters still convert electricity via a central inverter, but like microinverters, power optimizers maximize the output of each panel to mitigate the impact of shading. A key difference is that they don't allow for panel-level monitoring.
Overall, optimized string inverters are best for homeowners with some roof shading who don't want to pay a premium for microinverters. SolarEdge offers the most popular optimized string inverters on EnergySage.
Some homeowners believe they can power their homes independently from the grid once they go solar. To go off-grid with your solar panel system or power it during an outage, you must install a battery or a solar generator to store excess energy when the sun isn't shining. Batteries are a great way to increase energy independence and reduce reliance on fossil fuels. Even with a battery, most homeowners still choose to maintain their connection to the grid because adding enough solar batteries to power your home is often costly.
You've decided you're a good fit for solar and ready to move forward – but where do you start? Going solar can feel overwhelming, so we've broken down the process into five easily actionable steps:
The best way to get a great deal on your solar panel system is to compare quotes based on cost, equipment, and installer reputation. Historically, many solar shoppers only received one solar quote from a door-to-door salesperson or a cold call. But how can you feel confident in your solar decision if you only see one quote?
500kw Off Grid Solar System Fortunately, the free EnergySage Marketplace makes this easy by gathering up to seven custom solar quotes for you from our network of pre-screened installers. The best part? On average, solar shoppers who receive quotes on EnergySage pay 20% less for their solar systems than those who don't.