Solar panels for home: what to know about residential solar panels

Over the past decade, home rooftop solar use has exploded around the country as home solar becomes a very popular investment. Homes and businesses across the country are transitioning away from a fossil-fueled electricity grid towards a clean energy economy, driven by a need to reduce emissions in a time of global climate change. Amidst this period of energy reform, rooftop solar panel systems for houses are taking off at a remarkable rate. It’s time to give residential solar the credit it deserves.

Key takeaways

  • Home solar panels usually go on your roof, and provide many benefits. 
  • If you want to be completely off-grid, you need energy storage capabilities, a large solar panel system, and backup power to cover outages or for cloudy days. 
  • Financing a rooftop solar panel system is possible with solar loans, leases, and power purchase agreements. 
  • The average solar panel system lasts for about 25-30 years, and they increase the value of your property. 
  • Visit the EnergySage Marketplace to compare quotes from our pre-vetted network of solar installers

What are solar panels for home? How do solar panels work?

For most homes, solar panels for home means rooftop solar panels – a solar array installed on your roof that generates electricity from the sun and helps you reduce your monthly spending on electricity. Most solar shoppers on the EnergySage Marketplace see a positive return on investment from solar in seven to eight years.

Solar panels work by converting light energy to usable electricity, which we can then use to power our homes and appliances. Solar panels save money over time on electricity costs and provide low-carbon, sustainable electricity.

Planning your home solar panel system: six steps

Home solar panels don’t just appear on your roof – there are many steps you’ll need to take to ensure you are a good fit for solar, understand your options, and eventually put panels on your property. At a high level, there are a few big steps to keep in mind (click any step to skip to it):

  1. Determine your solar potential
  2. Compare your solar options: rooftop vs. community solar
  3. Estimate your needs
  4. Get solar quotes
  5. Understand how to pay for solar
  6. Pick a quote and install
  1. Determine your solar potential

There are a few things to consider when scoping out your home for rooftop solar. One factor to consider is the direction and tilt of your roof – although this is not a hard and fast rule, rooftop solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees. 

It’s also important to know how much sunlight your roof gets throughout the day. Solar panels need sunlight to produce electricity, so if your roof is shaded or otherwise obstructed by trees, chimneys, or anything else, that will impact how viable solar is for you. Try out our Solar Calculator to see your unique home’s potential for solar panel savings.

A common concern for homeowners who are considering solar is, “What happens if I move after installing solar panels?” A typical solar panel system lasts for 25 to 30 years. If you don’t plan on owning their house for that long, you may wonder if solar still makes sense. The good news is that solar increases the value of your property (by an average of 4.1 percent, according to a 2019 study by Zillow) and can actually expedite the process of selling the property when the time comes. The housing market is filled with buyers excited by the prospect of acquiring a solar home that comes with the benefit of zero utility bills. 

  1. Compare your solar options: rooftop vs. community solar

Perhaps one of the most exciting aspects of the residential solar energy sector is the list of options for homeowners who want to go solar but do not have a suitable roof. Ground mount solar installations and community solar subscriptions are two common ways to access power from the sun without actually installing anything on your rooftop. Community solar involves connecting with members of a group or your neighborhood to share a solar system, while ground-mounted arrays are an easy way to own and install your own system while bypassing any roofing hurdles.

What do residential solar panel systems typically cost?

The easiest way to calculate the cost of solar electricity across different system sizes is in dollars per watt ($/W), which indicates how many dollars solar will cost per watt of available electricity production. In 2021, homeowners are paying an average of $2.76/W. To put that figure in perspective, in 2008 the average cost of solar was just over $8/W. For an average 10kW system, a price of $2.76/W means you’ll pay approximately $27,600 before tax credits and rebates, and $20,474 or less after rebates and incentives.

The answer to this question depends on your state and system size. Check out our data that can help you estimate what solar panels cost in the U.S based on factors like state, manufacturer, and system size.

  1. Estimate your needs

Next, it’s time to roughly understand your solar needs, so you’re well-equipped to compare solar quotes. We estimate that a typical home needs about 20 to 25 solar panels to cover 100 percent of its electricity usage, but the actual number you’ll need to install depends on many factors. Location, panel efficiency, panel rated power, and your personal energy consumption habits all play a role in determining how many solar panels you need. Importantly, the number of solar panels you need for your home directly impacts the price you pay for solar.

What percentage of your home can you power with solar electricity?

Ideally, the answer to this question would be 100 percent. However, although a solar panel system can theoretically offset all of your energy use, it’s not realistic to expect that level of panel production every day of the week. Manufacturers and installers often recommend that homeowners factor in a 25 percent cushion when calculating their target for solar panel offset. The main reason for this: solar panels cannot operate at maximum efficiency all the time. There will be certain days when grid connection is necessary to fully cover your power usage. However, the beauty of net-metering is that you can benefit from surplus production days and never pay anything to your utility while still relying on the grid for backup storage.

  1. Get solar quotes

Once you’re certain you’re a good fit for solar and understand your payment and financing options, it’s time to gather and compare competing quotes for solar. Historically, most solar shoppers only saw a single solar quote from a company going door-to-door selling solar in their neighborhood. But how can you be sure that you’re paying a fair price for the right system without gathering multiple quotes to compare? 

That’s where EnergySage steps in: when you register for an account on EnergySage, we collect up to seven customized solar quotes from qualified, experienced installers near you. And we help you save: solar shoppers receiving quotes on EnergySage generally pay 20 percent less for solar than solar shoppers who don’t

  1. Understand how to pay for solar

There are many options when it comes to financing a rooftop solar panel system purchase; the main three are a cash purchasesolar loans, and solar leases or power purchase agreements (PPAs).

If you can afford it, paying in cash for your rooftop solar panel system is the most surefire way to save money over the lifetime of your system. With full ownership of your panels and no interest to pay on a solar loan, you’ll usually see the highest return on a solar investment with a cash purchase.

Want to own your system from the get-go, but need assistance with that upfront cost? A solar loan might be right for you. Solar loans lower the up-front cost of your rooftop solar system to $0, so you can “buy” your system and then pay off your loan in monthly increments. For many solar shoppers, your monthly loan payments will be similar to your electric bill before solar.

Solar leases and PPAs require no money down, but the catch is that you do not own your solar system; you are only hosting it for a third party that sells you the electricity it produces for a fixed rate. Importantly, when you enter a solar lease agreement or PPA, you are not entitled to any tax incentives because you don’t own the system.

Then, there are solar rebates and incentives. There are two simple ways to think about tax credits and other incentives for solar panels for home use. The major tax credit associated with residential solar panels is the federal investment tax credit (ITC), more commonly known as the solar tax credit. The ITC gives you a tax credit equal to 26 percent of the total cost of your system, as long as you buy the system. The next option will be state solar tax credits, such as New York state’s tax credit that cuts an additional 25 percent off the price of the residential system. Depending on which state you live in, the opportunity for beneficial tax breaks and solar programs could be significant. Some states and municipalities also offer other more complex options that will be case-specific – do some research into SRECs and other location-specific solar incentive programs.

When will your home solar system reach the “break-even point”?

Many homeowners are very interested in calculating their solar panel payback period, which is the amount of time it will take for electric bill savings to offset the cost of solar panel installation. The expected breakeven point ranges across the country, but on average, U.S. homeowners break even on their system cost after about 8 years.

  1. Pick a quote and install

Once you have met with the installers and done all necessary site visits and planning, the actual installation of your home solar energy system will only take a few days of work. The exact time depends on a number of factors. For example, if you are setting up net metering, that process will tack on additional time until your panels are properly connected to the grid. Overall, while the decision process for solar panels can take some time, the installation timeframe is very quick and fairly simple.

Will my solar panels be connected to the grid? What is net metering?

The vast majority of home solar systems will be connected to the grid. With grid-connected solar, net metering serves as an efficient solution to the question “how will I power my solar home at night?” Net metering is a solar incentive where you receive bill credits when your solar system overproduces electricity. During times when your panels aren’t producing enough electricity, like when the sun isn’t shining, you can use those bill credits to cover the cost of your grid electricity use.

If you are off-grid, you won’t have access to electricity from your utility. This means that, in order to build a completely off-grid project, you will need energy storage capabilities, an extra-large solar panel system, and provisions for backup power to cover you when your panels don’t get enough sun.

Frequently asked questions about home solar panels

Residential solar panels are one of the best ways to save money in the long term and create a positive environmental impact. Before you go solar, make sure to read through our key points to keep in mind about home solar panels:How much has the price of residential solar dropped in recent years?

What is the difference between solar for business and solar panels for home use?

What are the two main disadvantages to solar energy?How much do solar panels cost for a 2,000 square foot house?

Why is my electric bill still high with solar panels?Do you really save money with solar panels?

EnergySage is here to help you find solar panels for home

Whether you’re still doing your research, or you’re ready to contact a provider and schedule installation, choosing to invest in residential solar panels can be a daunting task. But, it’s important to remember that your investment will increase the value of your property and pay dividends in the long run. If you’re considering the pros and cons of solar panels for your home, get the answer to your most asked question—is solar really worth it? And, if you’re ready to go solar, start comparing quotes by signing up for a free account on the EnergySage Marketplace.


About Jacob Marsh

Jacob is a researcher and content writer at EnergySage, where he focuses primarily on current issues–and new technology!–in the solar industry. With a background in environmental and geological science, Jacob brings an analytical perspective and passion for conservation to help solar shoppers make the right energy choices for their wallets and the environment. Outside of EnergySage, you can find him playing Ultimate Frisbee or learning a new, obscure board game.


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