How to Planning a Home Solar Electric System

Solar panels generate “free” electricity, but there are still costs associated with installing them. Prices vary based on a few key factors: efficiency, capacity and your location.

After solar tax credits, the cost for a solar panel system on an average-size house in the U.S. ranges from $11,144 to $14,696, according to EnergySage. If you need a few panels for a small DIY project, expect to pay around $200 to $250 per panel (around $1 per watt).

How much does it cost to install solar panels?

The average cost to install solar panels in the United States is about $12,000 after federal tax incentives. On the low end, you can install a smaller system for around $5,000, while a high-priced Tier 1 solar panel system can cost $40,000 or more.

There are additional costs that go into an installation project beyond the price of panels. In fact, only about a quarter of the installation costs are actually for the panels. Labor costs, operational costs and additional equipment, such as inverters and control circuitry, make up the rest of the price.

Solar energy companies install the solar panels, provide maintenance and offer warranties on both the panels and the work. These additional services aren’t free, but they are often worth it. A few additional factors affect the price of solar panel installation.

How much do solar panels save?

Switching to a solar energy system could potentially cut your energy bill by 75%. The savings you and your family see will depend greatly on where you live, what the climate is like and your particular energy needs. For instance, an average homeowner in Portland, Oregon, will see total savings of $38,000, whereas a homeowner in Los Angeles could save as much as $90,000 over 20 years.

Many solar energy companies provide a free calculator tool to help you easily estimate the cost and savings of installing solar panels on your home. Different solar calculators may estimate electricity costs in different ways. Numbers can be based on the national average, regional averages or other information you provide.

The average American electric bill is between $100 and $200 per month, and the average yearly energy cost is about $1,500. Depending on how much you pay out-of-pocket for the solar panel system, it could take five to 15 years to break even. To calculate how long it will take you to break even on savings versus the cost of your solar panels, first subtract your incentives and rebates from your costs. Divide that number by the amount you are saving on utility bills per year.

Taking into account the federal tax credit for installing solar panels, most Americans’ solar panels start paying for themselves within seven years. Thanks to an extension from Congress, the solar investment tax credit is 26% for systems installed through 2022, but it is scheduled to decrease to 22% for systems installed in 2023 and expire at the start of 2024.

Even if your solar panels generate 100% of your electricity needs, you may still receive a utility bill. However, instead of asking for payments, you will get net metering credits for the month.

The composition of solar photovoltaic lighting system

The home solar photovoltaic lighting system directly converts solar energy into electrical energy and supplies it to the lighting fixtures. The system generally consists of solar panels, batteries, controllers, DC-AC converters and lighting fixtures, etc.

solar panel

Convert sunlight directly into electricity.

Battery

Stores the electrical energy provided by the solar cell for use when needed.

Controller

The main purpose is to ensure that the system can work normally and reliably, and prolong the service life of system components (especially batteries). It must contain battery overcharge protection circuit, overdischarge protection circuit, overcurrent protection circuit and anti-reverse charge protection circuit, etc.

Converter

The converter converts the DC power output by the solar panel and the battery into AC and DC power required by the lighting appliances.

Design of home solar photovoltaic lighting system

The system design focuses on efficiency and high reliability, as well as simple and convenient use and maintenance.

According to the local environmental conditions (geographical location, solar radiation energy, climate, weather, etc.), the size of the load and the time of daily use, and other use requirements, the system components are reasonably designed. Among them, solar panels and batteries have mature products. The converter of the system controller is the key point of system design, which is related to whether the system can work efficiently and reliably.

Partial design of solar energy

Calculation of solar panel power

The peak solar panel power required by the system is determined by the local average solar radiation and the electrical energy required by the load:

Pk=Pm·Ws/Wt·1KW/m^2

In the formula: Pk—the peak power of the solar panel, KWp

Ws—electric energy required by the load per day, KWh/d

Wt—the average daily square meter solar radiation energy KWh/(m^2·d)

Km-coefficient, considering the efficiency of each component, the influence of ambient temperature and other factors, the general value is 1.4-1.7. its value

The size should also be considered comprehensively according to the cost of the system and the specific situation of the user.

Battery capacity calculation

The watt-hour capacity Bw and the ampere-hour capacity BA of the battery are determined by the predetermined continuous no-sunshine time:

Bw=Kb·nb·Ws

BA=Bw/V

In the formula: Bw—Battery watt-hour capacity, KWh

BA—Battery ampere-hour capacity, Ah

nb—Number of consecutive days without sunshine, d

V—system voltage

Kb-coefficient, which is determined by considering the factors of battery efficiency, depth of discharge, and ambient temperature, and is generally 2.0-2.5. Similarly, the value of the value should also be comprehensively considered according to the system cost and the specific situation of the user.

The general battery can be calculated by the formula: daily power consumption x continuous working days/discharge margin (0.7)/battery voltage = single battery capacity

Do solar panels work when the power goes out?

Most people think that solar panels will keep their lights going when the power goes out. Unfortunately, unless you add battery storage (a hybrid system), they won’t.

Solar power systems automatically go offline in the event of a grid power outage as a safety measure for utility workers who are repairing power lines.

The only way solar panels will power your home during a blackout is if they are paired with battery storage.

What are solar batteries? How much do they cost?

Solar batteries store your excess solar energy so you can use it when you need it most, like during a power outage.

Most home solar batteries cost between $10,000 and $15,000 to install, so they add a substantial amount to the total cost of a solar installation. However, in a number of states, there are specific rebates to cut the cost of adding batteries to your solar system. It is also worth noting that the 26% federal solar investment tax credit applies to batteries when they are installed to store solar energy generated by a home solar system. This further reduces the cost significantly.

Despite the high price tag, solar batteries are cheaper and more popular than ever before as more homeowners want to protect themselves from widespread power outages. In fact, around 70% of people that use our website to request quotes from local solar companies ask for battery storage. This number is up from less than 50% only two years ago. Blackouts are becoming more common throughout the U.S., and what better way to keep your lights on than a solar battery?

In the future, solar batteries will only become more popular, especially as more utilities put an end to net metering. Without net metering, you wouldn’t be paid for all of the solar electricity you produce that is excess to your home's electric needs, at the time it is generated (the middle of the day). By storing your extra energy in a battery, you’ll still get the full value of your solar energy, even if your utility doesn’t have a great net metering program.

You can read more about net metering and battery savings here.

How much do solar panels cost for an average home in 2022?

The average residential solar panel installation cost today is between $13,098 and $16,872 after claiming the 26% federal solar tax credit (more about that below). This works out to an average of less than $3.00 per watt installed, which is more than 70% cheaper than the cost of solar just 10 years ago!

Table 1: Average solar panel cost based on system size in 2022

Solar panels have next to no long-term maintenance costs, so solar is mostly a one-time investment. Solar prices have leveled out over the last two years and we are not forecasting any further falls to solar panel prices over the course of 2022.

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