Solar Panels for Home

Solar panels are used to power everything from calculators to sports stadiums to satellites — and they can just as easily be used to power a home.

You don’t need to be a rocket scientist – or anything close to it – to get solar panels for your home. Today, going solar is a routine home improvement project that comes with the benefits of energy cost savings, reduced emissions, and increased home value.

In this article, we’ll cover everything you should know about getting solar panels for your home so you can make informed decisions as you navigate the process.

Topics in this article:

• How do solar panels work on a house?
• The cost of a home solar system
• The best solar equipment
• How to get solar panels for your home

Let’s dive in by exploring how solar panels work for your home and why people go solar.

How do solar panels work on a house?

Before you start slapping panels on your roof, it’s natural to wonder how solar energy works.

Solar panels work through the photovoltaic (PV) effect. When sunlight hits the panels, it creates an electric current that is first used to power electrical systems in your home. If your panels are producing more electricity than your home is using, the excess is stored in a battery and/or pushed onto the local energy grid to power your neighbors’ homes.

Related reading: 10 Questions To Ask Yourself Before Going Solar

What about when the sun isn’t shining?

When the panels aren’t producing, you can draw power from battery storage and/or from the local electricity grid.

Most states and utilities have net metering billing options that allow solar owners to offset the cost of the electricity they pull from the grid with credit they earn by pushing excess solar electricity onto the grid. There are also benefits to having your own battery storage, such as energy independence, backup power when the grid goes down, and load shifting to avoid expensive time-of-use rates.

Benefits of home solar panels

So, why would anyone power their home with solar panels? Why not just stick with utility electricity?

Energy cost savings

There are a handful of reasons to get solar panels for your home, but the biggest one is energy cost savings. Home solar is simply much cheaper than paying for grid electricity, and can lead to tens – sometimes hundreds – of thousands in savings over the warranty period of the panels.

That’s because going solar locks in your electricity costs for 25 years from what your system produces while the price of grid electricity continues to rise.

One way to think of home solar is buying 25 years’ worth of electricity in bulk at a deep discount instead of paying the full retail price as it rises and rises over 25 years.

Many homeowners think about going solar like locking in the price of gas for their car. If you could time travel back to when you first got your driver’s license and someone offered to sell you 10 gallons of gas every week at the same price year after year, would you take it? Of course! It would be one of the smartest investments you’d ever make.

Today, this analogy is even more appropriate as more homeowners convert to electric vehicles. In fact, you can lock in a low, flat rate for the electricity powering your EV by installing solar panels to charge your car at home.

See how much you can save by going solar.

Environmental benefits

The second reason – and the one most people attribute to solar panels – is the environmental benefits.

The lifecycle carbon emissions of solar panels is about 12 times less than natural gas and 20 times less than coal. Going solar is one of the most powerful things homeowners can do to lower their carbon footprint, clean up local air pollution, and contribute to the clean energy transition.

And rooftop solar is unique in that it requires zero additional land use to produce electricity.

Increased home value

Speaking of putting wasted space to good use, installing solar panels also raises your home value.

Studies by Zillow and the Berkeley Lab both found that homes with solar panels sell for more money than comparable homes without them. Better yet, over 30 states have property tax exemptions for the value that solar adds to the home.

So, going solar adds value to your home that you don’t have to pay taxes on and that can help you recover the cost of the system in a home sale.

Energy independence

Last but not least, home solar is a step toward energy independence and gaining control over your energy costs.

Without solar, you have no control over your price for electricity or how your utility spends your money. Your choice is either to pay the utility rate or sit in the dark.

By going solar, you have control over your electricity price and where your money goes. And if you add battery storage, you essentially create your own mini-utility to power your home separately from the grid.

This is especially useful when the grid goes down – which is happening more often in the era of climate change.

Related reading: How Long Can Solar Battery Power a House During an Outage?

How much are solar panels for home?

Home solar systems have an outdated reputation for being an expensive luxury item that only wealthy homeowners can afford.

However, the cost of solar has plummeted in the last several decades and there are state and federal incentives that make it accessible to many homeowners.

According to the Solar Energy Industry Association:

“The cost to install solar has dropped by more than 60% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide. An average-sized residential system has dropped from a pre-incentive price of $40,000 in 2010 to roughly $20,000 today.”

Keep in mind, there is a federal solar tax credit available to all US homeowners worth 30% of the cost of going solar. So, for an average $20,000 system, the tax credit is worth $6,000 and would reduce the net cost to $14,000.

Get multiple solar quotes from vetted installers.

Price per watt vs levelized cost of energy

The price of home solar varies based on location, installer, energy consumption, and equipment. But there are two ways to compare the cost of going solar.

Price per watt (PPW)

The first method is Price Per Watt (PPW). This measurement is best used to compare multiple solar quotes, and the formula to calculate it is pretty simple. Just take the gross cost of the system and divide by the size (in Watts).

$20,000 / 5,000 W = $4 per Watt

Let’s look at some example bids:

So, even though Bid 3 has the highest price tag, at $3.96 per Watt it provides the best bang for your buck.

Today, solar systems typically cost between $3-4 per Watt, and the cost per Watt drops as the size of the system increases.

While Price Per Watt provides a simple apples-to-apples comparison, it only tells you part of the story as not every system will perform identically through its energy yield. On solar.com, our Energy Advisors also recommend reviewing the Levelized Cost of Energy – or put another way, the “watt swap.”

Levelized Cost of Energy (LCOE) or “Watt Swap”

The second method is Levelized Cost of Energy (LCOE), which is useful for comparing the cost of going solar versus the cost of paying for utility electricity.

When you generate solar on your roof you buy less kilowatt hours (kWh) from your utility. So the best way to calculate savings is to look at the expected energy production of a system. And not all solar panels and inverters are created equal.

LCOE is measured in cents per kilowatt hour (c/kWh) and is found by dividing the net cost of the system by the expected lifetime production. Here’s how that looks for a 5 kWh system with a net cost of $14,000 and an expected lifetime production of 175,000 kWh over 25 years.

$14,000 / 175,000 kWh = 8 cents per kWh

With the LCOE in hand, you can easily compare the price of solar electricity to grid electricity. Hover or tap on a state below to see the average utility electricity rate.

Today, most solar.com customers have an LCOE of 6-8 cents per kWh after going solar – which is cheaper than the average electricity price in every state and territory in the US.

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Financing a solar system

Just like a car or a house, you can pay cash or finance a solar system to spread the cost into predictable monthly payments.

And here’s the cool thing, when you’re deciding how to finance solar panels for your home, you’re also deciding:

• The rate you will pay for electricity over 25 years
• Your total lifetime savings
• When your savings will kick in

Paying cash offers the greatest lifetime savings, but there is often a 6-10 year payback period for recouping your upfront investment.

Solar loans come with interest payments, which reduce your lifetime savings, but can front-load your savings by establishing a monthly payment that’s lower than your electricity bill.

For example, here’s how your lifetime savings and payback change based on how you finance a $20,000 solar system.

Some homeowners go for maximum savings, while others go for immediate savings. The important thing to remember is that you are in control – which is something you’ll never have with your utility.

Most of the time solar loans will rememorize after 18 months allowing you to lock in a low rate until you monetize your 30% tax credit. Then, once the tax credit is received you can choose to buy down your loan, oftentimes without penalty, to continue to take advantage of your solar savings.

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Where are your energy payments going?

Electricity is an essential cost, and you’re going to pay for it one way or another. So, it’s worth considering where your energy payments are going.

If you rely solely on grid electricity, 100% of your electricity payments go to an energy utility (and most places have only one utility to pick from). Some of that money goes to infrastructure upgrades and maintenance – and some of it goes to profits, stock buy-backs, lobbying, and other things that may or may not benefit you as a ratepayer.

But, by going solar, you’re no longer simply a ratepayer – you have control over the production, transmission, and consumption of your electricity. You choose which installers to work with and which equipment to buy. Better yet, you benefit from your investment through increased home value and energy cost savings.

Curious how much your rate has increased? Google the name of your utility and “rate change” and the current year. Then, compare your power bills from a similar time period the year before. While a 5% rate increase may not sound like a whole lot, it adds up, and compounds, over time.

Home solar equipment

If solar is starting to sound like a good investment, then it’s time to familiarize yourself with some of the equipment.

A home solar system can be broken into a handful of major components

• Solar panels
• Inverters and monitoring software
• Balance of system
• Battery storage

Solar panels for home

The star of the show is the solar panels themselves, and there are several things to consider when choosing the right solar panel.

• The cell type indicating its efficiency and long-term performance
• Power output rating
• Efficiency rating
• Product and performance warranties
• Where they were manufactured

Some homeowners focus on having the best performance warranties while others are determined to buy American-made solar panels. The “right” panel depends on your budget and goals.

With that in mind, it’s worth noting that a majority of solar.com customers gravitate toward REC and Q Cells panels, and the most common output is now over 430 Watts per panel.

Talk to an Energy Advisor about solar panels today.

Solar inverters for home

The next thing to consider is inverters, which invert the DC electricity produced by solar panels into AC electricity that’s usable in your home.

Inverters also play a role in monitoring your solar production. As electricity passes through the inverter gateway, the data is reported to a monitoring software that can be viewed on your phone or computer.

Monitoring your system is important for identifying and claiming warranty issues to avoid lost energy production.

There are two main types of inverters: String inverters and microinverters.

A string inverter is a single box that mounts to your house and inverts electricity for multiple panels. Meanwhile, microinverters are small units that attach to each panel and invert electricity before it leaves the panel.

There are pros and cons to each, but in 2024 around 75% of solar.com customers chose Enphase microinverters and 23% chose SolarEdge string inverters.

Enphase is known to have high reliability and high performance, which is why so many sophisticated solar investors opt for Enphase on the solar.com marketplace.

Balance of system

Balance of system (BOS) is a catch-all term for all of the equipment in a solar system other than the solar panels. This includes:

• Inverters
• Racking
• Wiring
• Meters
• Combiner boxes

You likely won’t spend as much time considering the balance of system equipment as you do panels, but it’s good to understand this term anyway.

Solar batteries for home

Finally, more and more homeowners are pairing battery storage with their solar systems. Battery storage is crucial if you want to use your solar system for backup power during a grid outage.

Typically, solar systems without battery storage automatically shut off when the grid goes down. This is a safety feature that prevents solar energy from entering the grid while utility technicians are repairing it.

But, if you have battery storage, your solar system will remain operational during outages.

In areas with time-of-use rates, batteries can also help you store cheap solar energy to use during peak demand periods when grid electricity is expensive. This is called load shifting, and it can lead to extra solar savings.

How to get solar panels for home

The equipment that makes up your solar system is important. But perhaps even more important is who you trust to install your system.

Admittedly, the process of installing solar panels on your home can be long, complex, and lined with scammers and sleazy salespeople.

That’s where solar.com comes in. Our parent company, Electrum, was founded with the purpose of combating solar scams and bringing transparency to the market. Solar.com simplifies the process, cuts out the noise, and leads to additional savings (as verified by the US Department of Energy).

Here’s how it works.

Team up with an Energy Advisor

The first step in the solar.com process is a quick introductory call to better understand your energy goals and if we have vetted installers in your area. If it seems like a good fit, we’ll match you with an Energy Advisor.

Teaming up with an Energy Advisor is like bringing your mechanic friend to buy a car: They’re there to call out the BS and help you make informed decisions throughout the process. Together, you’ll use satellite technology to design a custom solar system and use it to generate dozens of quotes from our network of vetted installers.

Connect with an Energy Advisor today.

Comparing solar quotes from vetted installers

Like any home improvement project, the key to getting the best price for home solar is getting multiple quotes. Solar.com is not the only place to compare solar quotes online, but we offer two major advantages.

1. Binding quotes. Other platforms offer estimates that tend to be much lower than the price installers can actually offer. On solar.com, the price you see is the price you pay because it is set by the installers themselves.
2. Vetted local installers. Solar companies are rigorously vetted before joining our network. The vetting process includes a look at the company’s financials so we know they are operating on solid footing. In the end, fewer than 30% of the installers that apply are accepted into our network.

Comparing quotes on solar.com not only saves you time and money, it provides an assurance that your installer is reputable and has good standing in your community.

We understand that buying solar online may cause concern, but it’s usually far more efficient and solar.com offers a pressure-free approach to help guide you. We also stand behind every installation with our leading Tri-Guard Warranty. We’re so confident your project will be successful we guarantee it.

Tracking your project from start to finish

Our work doesn’t end once you’ve selected a bid. We’ll also help you claim incentives and explore financing options.

In fact, a Customer Success Manager will continue to advocate for your project through installation, inspection, and permission to operate (PTO). We even check in a year after your solar system goes live to make sure it’s operating properly.

The bottom line

The benefits of installing solar panels on your home include energy cost savings, increased home value, cleaner air, and energy independence. While solar panels have a reputation for being expensive, they’re actually much cheaper than grid electricity.

The greatest hurdle to going solar is the process itself. It can be long and complex, but solar.com makes it easy by pairing you with an unbiased Energy Advisor to compare multiple quotes from vetted installers.

Start your project today to be one step closer to solar savings.