How Much Does It Cost to Install Solar Panels?

Posted by Solar Expert on January 6, 2020

How Much Does It Cost to Install Solar Panels?

Here at DFW Solar Electric, we have lots of conversations with homeowners who have heard about solar, but have no idea if solar is right for them. The two questions we get every day are 1) how much does it cost to install solar panels, and 2) how much money can I save by going solar?

We've covered the question about how much you can save with a solar panel installation in a different post HERE. Today, we're going to talk about how much it costs.

Unfortunately, the answer to that question is: it depends. Yes, we know. That isn't helpful at all. So, we thought we could take a few minutes and clarify WHY it depends, and how any homeowner with the answers to a few simple questions can really get to the bottom of how much it costs to install solar.

WHY it Depends

There are a huge number of factors that could possibly go into the exact cost of a solar installation, but we find that most of them really aren't that important. Our experience is that there are generally only four factors that can make a big difference in the overall cost: 1) the size of the system, 2) where it will be installed, 3) the available capacity in the home's electrical panel, and 4) what equipment is desired.

Let's spend a minute or two on each.

The size of the system is the single most important factor in the cost. The size of the system is calculated in watts, and is determined simply by multiplying the number of solar panels times the maximum capacity of each individual solar panel. So, for example a system with 20 solar panels of 300 watts each is a 6,000 watt (or 6.0 Kilowatt) system. Solar installers will usually quote the cost for a system on a per watt basis, and the cost will change on a (somewhat) linear basis, so if a 6.0 Kilowatt system is quoted, and the final system size is 6.6 Kilowatts, the cost of the system will go up proportionately to the increase in system size (or about 10% in this example). There will usually be some economies of scale for the installer, so the cost per watt will decrease a bit as the system size gets larger (as usual, size matters), but as a general rule assuming a proportionate change in cost for a change in system size provides a good estimate.

Where the system will be installed on the property also affects the cost. A system installed on a large, slanted asphalt shingle roof is the least expensive. There may be small increases (1-2%) if a system has to be installed on a second story, or on multiple parts of the roof. And there will be a relatively large increase in cost (say 5-10%) for a flat roof, tile roof or ground mounted installation.

The available capacity in the home's electrical panel is also a biggie. We find that about 80% of our customers have adequate available space in the electrical panel. But, if the home needs a new electrical panel to accommodate the system, that will add significant cost, and even if the installer just has to add a subpanel instead of replacing the main panel, it will still be a noticeable increase in price.

What equipment is used is the last main variable. A homeowner can get a good, functional system with decent panels, a string inverter, basic monitoring and a strong warranty for one price. But, a system with high efficiency, all black panels, microinverters and an upgraded monitoring system will cost 15-20% more, depending on the brand names. Whether a homeowner needs or wants all those upgrades is a matter of budget and personal preference. We'll cover the pluses and minuses of various equipment choices in another post.

So, given all that, how much does it cost to install solar panels?!

We've explained in the previous section what the variables are, so now we get to what you really want to know. And, unlike virtually every other solar installation company we've encountered, we at DFW Solar Electric believe in fair and transparent pricing - so we are actually going to tell you.

Our Gross System Prices are shown below:

System Size (in Kilowatts) 6.0 7.5 9.0 >12
Standard Equipment (price per watt) $2.60 $2.53 $2.49 $2.42

Our standard equipment includes good panels, dual microinverters, basic monitoring, and strong warranty coverage. The main variances to that price will be for the four items noted above. For example, premium panels would add 10-15 cents per watt, and ultra-premium panels would cost even more. A flat roof would add 10-15 cents per watt and a ground mount would add 20-25 cents per watt. If needed, a new sub panel would cost $750 or a new electrical panel would cost $1,500-$2,000. There are occasionally other costs that would need to be considered, but they would be rare, and not normally significant to the overall cost.

Of course, these prices are before any Federal tax credits or utility incentives, so the Net System Price to you would ultimately be reduced by those items, which could be as much as 50%.

We know our customers are busy, so if you don't have a lot of time (or just don't want) to try to figure all this out on your own, you can always call us and we'll be happy to walk you through it over the phone or come out to your home and explain how it all works.

A Footnote on Gross System Price and Net System Price

We get a lot of questions about incentives, too. In the DFW Metroplex, there are potential solar utility incentives available from Oncor, Garland and Denton, but they are typically limited and available only during certain times of the year. There is also a Federal income tax credit available for solar projects in the amount of 30% of the system cost (decreasing to 26% in 2020). These incentives should be available to you regardless of which installer you use, so we recommend our prospective customers evaluate competing quotes from installers based on the gross system cost, and not the net system cost after incentives. We find it is just less confusing that way. We don't mean to indicate that the incentives aren't important - the cost savings from the incentives is big, and frequently makes the difference in the final decision of whether or not to go solar. We just believe it is easier for customers to evaluate competing proposals on a gross system cost basis.

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