Are Solar Panels Worth It? Here’s How to Find Out

What Are the Upfront Costs of Solar Panels?
A main factor that deters many potential solar panel buyers is the upfront cost. Solar energy systems are generally a significant investment, with the average cost of the panels and installation ranging from $15,000 to $22,500, depending on the system size.

The cost of solar panels not only includes the panels themselves and the installation, but it also includes all the design, permits, inspections, wiring by a licensed electrician, and reinforcement of weak roof areas.

While the initial expense is substantial, it’s worth noting that solar panel prices have declined over the years, making them more accessible for homeowners. Moreover, there are various financing options to help defray or break down the expense into more affordable increments, including solar loans, solar panel leasing, and even home equity loans.

But even with financing options, you’re likely still wondering, “Are solar panels worth it for me?” We’ll cover all the benefits and other key details next to help you decide for yourself.
Do Solar Panels Offer Any Financial Savings?
While an initial investment of $15,000 to $22,500 is daunting (and quite possibly prohibitive) for many people, buying a solar panel system can help you save money in the short- and long-term. In many cases, they may end up paying for themselves at some point. Let’s review some financial savings that could result from investing in PV panels.
Government Incentives and Rebates
The first thing to realize about that high upfront cost for a solar power system is that your net costs will likely be much lower. This is thanks to aggressive incentives and rebates from federal and local governments. These solar incentives come in the form of tax credits, grants, and other financial benefits that can significantly reduce the initial cost of home solar systems.

Before deciding whether or not solar is right for you, research the potential incentives in your area. If you’re unsure where to look for these incentives, you can contact a local solar company, as they will be fully up-to-date on available incentives, whether you qualify for them, and the application process.

One major incentive most homeowners will qualify for is the federal solar tax credit. This gives you up to a 30% federal tax credit based on how much you pay for a residential solar system installed through 2032. For example, if you install a $10,000 solar system in 2024, you’ll get a $3,000 federal income tax credit when you file taxes in 2025. This is not a permanent credit, though. The percentage drops to 26% in 2033, 22% in 2034, and expires in 2035.

The best part?

You can also stack this federal tax incentive on top of state and local solar incentives and lower your cost even further. For example, California has several state-level incentives, such as:

The Self-Generation Incentive Program (SGIP), which offers a rebate if you install solar battery storage with the panels
Property tax exclusions for solar panels
Property Assessed Clean Energy (PACE) allows you to pay back a solar panel loan with your property taxes