How much do solar panels cost?

Average system (8 kW): $20,000-$28,000 before incentives. After 30% federal tax credit: $14,000-$19,600. Cost per watt: $2.50-$3.50 (installed). Factors: system size (based on your electricity usage). Panel type (monocrystalline is standard). Inverter type (microinverters cost more but perform better in shade). Roof complexity (steep, multiple planes, or difficult access adds cost). Your location (labor costs vary). The 30% federal tax credit is available through 2032. Many states offer additional incentives. The best way to get an accurate price: get 3+ quotes from local solar installers (or use EnergySage to compare).

How much can I save with solar?

Average monthly savings: $100-$200. Average annual savings: $1,200-$2,400. Payback period: 6-12 years. After payback: free electricity for 15-20+ more years. Total lifetime savings: $20,000-$60,000 (over 25 years). Your savings depend on: your current electric rate (higher rates = more savings). System size and production. Net metering policy in your area. Sun exposure (south-facing, minimal shading). Electricity rate increases (rates go up 2-3% per year on average, increasing your savings over time).

Do solar panels increase home value?

Yes. Studies show: solar panels add $10,000-$25,000 to home value on average. Zillow: homes with solar sell for 4.1% more than comparable homes without. Buyers pay a premium for lower electricity costs. Important: owned systems add more value than leased. A leased system can complicate the sale (buyer must qualify to assume the lease). Appraisers are increasingly trained to value solar (but not all markets appreciate it equally). In areas with high electricity rates: the value increase is highest.

How long do solar panels last?

Solar panels: 25-30+ years. Most manufacturers warranty performance for 25 years. Degradation: about 0.5% per year (at year 25, panels still produce ~87% of original output). Many panels continue producing well beyond 30 years. Inverters: string inverter: 10-15 years (budget for one replacement over the system's life). Microinverters: 25 years (match the panel warranty). Maintenance: minimal. Rain cleans the panels in most areas. Annual inspection recommended. No moving parts. Occasional cleaning in dusty or pollen-heavy areas.

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Home Improvement

Solar Panel Guide: Cost, Savings & Installation

Lumberama Editorial Team, Solar Energy & Renewable Power Specialists Oct 23, 2026 11 min read

How Solar Works

Solar panels convert sunlight into electricity. The system connects to your electrical panel and offsets your electricity usage.

Components: Solar panels: mounted on your roof (or ground). Convert sunlight to DC electricity. Inverter: converts DC electricity to AC (what your home uses). String inverter: one unit for the whole system. Cost-effective. Microinverters: one per panel. Better for shading. More expensive. Electrical panel: solar connects here. Meter: tracks electricity produced and consumed. Net metering credits you for excess power sent to the grid.

Net metering: When your panels produce more than you use (daytime), the excess goes to the grid. Your meter spins backward (you get credit). At night, you use grid power and use those credits. The result: your electric bill is dramatically reduced or eliminated.

Costs

System cost: Average residential system: 6-10 kW. Cost per watt (before incentives): $2.50-$3.50. Average 8 kW system: $20,000-$28,000 (before tax credit).

Federal tax credit (ITC): 30% of the total system cost (through 2032). An $24,000 system = $7,200 tax credit. After credit: $16,800.

State incentives: Many states offer additional rebates and credits. Check your state's programs at DSIRE (Database of State Incentives for Renewables and Efficiency).

Monthly savings: Average electric bill offset: 70-100%. Average monthly savings: $100-$200.

Payback period: 6-12 years (varies by location, electricity rates, and incentives). After payback: free electricity for the remaining life of the system.

System lifespan: 25-30+ years (panels degrade about 0.5% per year). Inverters: 10-15 years (string) or 25 years (micro).

Installation Process

Steps: 1. Site assessment: solar company evaluates your roof (direction, angle, shading, condition). South-facing roofs in the US produce the most energy. 2. Design: system sized based on your electricity usage and roof space. 3. Permits: solar company handles permits (building and electrical). 4. Installation: 1-3 days for a typical residential system. Panels, racking, inverter, and electrical connections. 5. Inspection: local inspector approves the installation. 6. Utility connection: utility installs a bidirectional meter. System goes live.

Total timeline: 1-3 months from contract to power-on (most of the time is permits and utility approval).

Buying vs Leasing

Buying (cash or loan): You own the system. You get the tax credit. Best long-term value. Increases home value ($15,000-$25,000 on average). Loan payments are often less than your current electric bill.

Leasing/PPA: Solar company owns the system. You pay a reduced rate for the electricity. No upfront cost. You do NOT get the tax credit (the solar company does). Less long-term savings. Can complicate home sales.

Recommendation: Buy if you can (cash or solar loan). The 30% tax credit and long-term savings make ownership the better financial decision in most cases.