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Solar power overview

california

The U.S. has one of the best climates for solar power in the world and is home to some of the best solar companies and manufacturers. For homeowners who are looking for clean energy solutions, solar power is utterly essential. The benefits of solar power go beyond just saving money on your energy bills; you can take complete control of your electricity use and energy efficiency, reducing or even eliminating your reliance on utility companies. Even more impactful, you can directly lower greenhouse gas emissions and your reliance on fossil fuels, which provides a number of tangible environmental benefits.

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Solar power metrics

money

$62,059

Avg. lifetime savings over 25 years (10 kW)

money

7.5 years

Avg. payback period

money

$14k-$27k

Avg. payback period

money

$10k-$20k

Avg. cost with tax credit (5-10 kW)

money

$2.73: watt

Avg. cost (in CA)

money

18,280 kWh

Avg. annual power production (10 kW)

Projected lifetime savings over time, based on purchase type

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If you have the funds, paying in cash will maximize your long-term savings. For those without the necessary cash flow, a solar loan will make the most sense. Leases, for the most part, are still guaranteed to save you money, but they come with fewer benefits and less flexibility.

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Purchasing a solar system could qualify for a 26% tax credit, based on the total equipment and installation cost.

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How much do solar panels increase home values?

Home Solar System Size

Amount Solar Panels Increase Home Value*

Cost to Install Solar Panels (After Tax Credit)**

4 kW

$23,644

$7,874

6 kW

$35,466

$11,810

8 kw

$47,288

$21,280

10 kw

$59,110

$19,684

*Figures based on study by Lawrence Berkeley National Laboratory. **Figures based on solar average costs in the U.S.

What do solar panels cost?

money

$2.73 per watt

Cash purchased Before 26% solar tax credit

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$3.05 per watt

Financed Before 26% solar tax credit

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$50-$250/month

Leased Estimate for average lease cost

Pros and cons of installing solar panels

Homeowners should keep in mind their expected solar panel payback period, or the amount of time it will take to recoup their investment, by state. The cost of your home solar system can vary greatly, depending on the total federal and local tax credits.

Not all systems completely offset the energy you’d typically purchase from your utility company. But solar panels can increase your property value by up to $15,000, according to the Department of Energy.

Most residential solar systems will produce electricity for 20 to 30 years and require very little maintenance. The costs/savings vary based on how you purchased the panels (bought outright, financed, or leased).

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Electricity produced by solar panels

Solar panel efficiency varies depending on your latitude — the further south you are in the U.S., the more you’ll get out of a small system.

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Solar panel efficiency can convert over 20% of the sunlight’s energy into electricity, especially if your roof is obstructed by little shade and faces south or west.

The best way to determine whether your home is a good fit for solar electricity is to contact a solar installer in your area. A solar energy specialist can come to take a look at your home and give you a custom recommendation.

Solar rebates, incentives, and tax credits

In states that have a solar sales tax exemption, the purchase of solar panels may be shielded from sales tax. Currently, at least 25 states offer a solar sales tax exemption and 36 states offer solar property tax incentives.

Year Placed In Service
Federal Solar Tax Credit

2021

26%

2022

26%

2023

22%

2024

10% (for commercial installations only)

Year Placed In Service

2021

Federal Solar Tax Credit

26%

Year Placed In Service

2022

Federal Solar Tax Credit

26%

Year Placed In Service

2023

Federal Solar Tax Credit

22%

Year Placed In Service

2024

Federal Solar Tax Credit

10% (for commercial installations only)

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The information on our website is general in nature and is not intended as a substitute for competent legal, financial or electrical engineering advice. As forecasting solar savings involves assumptions about future electricity prices you should be aware such estimates are inherently uncertain.