Everything to Know About Solar Panels for Your Home

In the past 10 years, the cost of installing solar panels for your home has dropped 61%. With the cost of solar dropping, as well as tax incentives, installing solar panels for your home is a sensible upgrade with many long-term benefits.
Aloha! Some posts contain affiliate links, which means we make a small commission if you click
an affiliate link and make a purchase. To learn more, click here. Thank you for supporting Econalu!

2020 is the final year to receive a 26% federal tax credit for installing solar. Solar panels placed after 12/31/2020 and before 01/01/2022 will be eligible for a 22% tax credit.

The average American household spends $1,450 on electricity per year. As the cost of installing solar panels drops, it becomes more realistic for homeowners to install solar panels in their home. 

Key Takeaways

  • Since 2010, the cost of solar has dropped 61% (Source: NREL). As the cost of solar goes down, it becomes more realistic for homeowners to invest in solar panels for their home
  • Solar increases the value of your property – benefit of zero utility bills
  • SunPower recommends a 25% cushion when calculating solar panel offset; solar cannot operate at maximum efficiency all the time

How do solar panels work?

There are two types of solar panels:

  1. Photovoltaic (PV) panels which convert sunlight to produce electricity (these are most commonly used for households)
  2. Solar thermal panels which are used for heating purposes

The solar panel system is…

Grid-connected solar power systems connect to your community’s electrical grid. Your electricity bill would go through “net metering,” which means the utility company would offset your power bill based on the amount of energy you send to the grid.

Depending on how many panels you get, you may still need more electricity. Plus, solar cannot operate at maximum efficiency all the time. If you need more electricity than your panels can produce, you can still power your house through the grid. 

If you produce more energy than you consume, your surplus energy goes back to the grid. 

Off-grid systems, are a standalone option where the energy your panels collect is stored by a solar battery system. Instead of pulling from the electrical grid to power your home, off-grid systems pull from your batteries.

A battery bank should provide enough energy for several days of limited sun. Because of the cost of the battery bank, off-grid systems are generally more expensive.

How many solar panels do you need?

The amount of solar panels needed is unique to each household. This depends on a variety of factors, including:

  • Your current energy consumption
  • Your roof capacity
  • The amount of sunshine your household receives

Start figuring out how many solar panels you need by looking at your electricity bill. You’ll see the amount of electricity your household uses will be measured in kilowatt-hours (kWh). Take note of how your energy use changes throughout the year.

Next, you can use this SunPower calculator to estimate your potential energy savings by installing solar panels on your home. 

Understanding the Financial Investment of Solar

As the cost of solar goes down, it becomes more realistic for homeowners to invest in solar panels for their home. Since 2010, the cost of solar in the US has dropped 61% (Source: NREL). 

Tax Credits

2020 is the final year to receive a 26% federal tax credit for installing solar. Solar panels placed after 12/31/2020 and before 01/01/2022 will be eligible for a 22% tax credit.

Depending on your state, you may qualify for a tax credit for energy your system produces that feeds to the grid.

How to Compare Solar Companies

  • Review the cost of the system and installation
Our Choice For

US Solar Panels

  • Leading US manufacturer
  • High-efficiency panels installed by local solar contractor
  • 25 year system warranty

SunPower’s A-Series Residential Solar Panels are some of the best on the market today, 22% efficient at maximum. This means these panels are more efficient at converting more sunlight into energy.

Pros

  • 25 year warranty
  • High-efficiency solar panels
Our Choice For

DIY Solar Kits

  • DIY Solar Kits with step-by-step instructions and technical support 

Go Green Solar’s DIY solar kits make installing solar panels easy and accessible to those who may not be able to pay for professional solar installation. Their technical experts are there to support you every step of the way.

We also like the option to power your home with a backup solar battery.

Pros

  • High quality solar without the big installation price
  • Support you through installation, permits, rebates and interconnection

Cons

  • You have to install and go through the steps (inspection/permit approval) yourself

Switch to renewable energy.

See how much you can save by switching your home to solar.

Sunpower

  • High-efficiency panels installed by local solar contractor
  • 25-year system warranty
  • DIY Solar Kits with step-by-step instructions
  • Technical support at every step

Frequently Asked Questions

If you want to keep your home powered with solar if the electric grid goes down, you’ll need a grid-tie battery backup system. We recommend Go Green Solar’s Enphase Ensemble system because it automatically detects grid outages so it can transition your home to be powered by solar battery.

Installing a solar panel system could save the average American household $1,450 per year on electricity. The actual electricity cost saved by installing solar panels would be unique to each household.

Your estimated savings from installing a solar panel system depends on:

  • Amount of direct sunlight your household receives,
  • Your energy consumption
  • The size and angle of your roof, and
  • Your local electricity rates.

We recommend using this SunPower calculator to estimate your potential utility savings after installing solar panels on your home.

Investing in solar panels for your home will be a big step – so it’s natural to be concerned about how long your solar panels will last.

Most companies offer a 25-year power and product warranty. Your panels may still power your home beyond that.

Krista Aoki

Krista Aoki

Krista Aoki is the co-founder of Econalu. She is a freelance web designer, marketer and writer. A visionary with a degree in Geography and Political Science from UH Hilo, she writes to educate the world on how small changes can make a big, lasting impact. Connect with her on her blog Reroute Lifestyle, Instagram or Medium.

Keep Reading

Everything to Know About Solar Panels for Your Home

In the past 10 years, the cost of installing solar panels for your home has dropped 61%. With the cost of solar dropping, as well as tax incentives, installing solar panels for your home is a sensible upgrade with many long-term benefits.