Are Solar Panels Worth It in 2024?

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In most cases, installing solar panels on your home is worth it. Get connected with a trusted solar professional today to determine if solar is right for you. 24v Golf Cart Battery

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Faith is a writer whose work has been featured in EcoWatch and Today’s Homeowner. She holds economics and English degrees from the University of North Carolina at Chapel Hill and likes to collect books and spend time in nature in her free time.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Karsten Neumeister is an experienced energy professional with subject-matter expertise in energy policy and the solar and retail energy industries. In addition to previous roles with the Retail Energy Advancement League and Solar Alternatives, he has written for EcoWatch and National Public Radio (NPR).

In most cases, installing residential solar panels is worth it because the long term savings and increase in property value often outweigh the upfront cost. Solar panels typically last 25 years or more and can dramatically reduce or even eliminate your electricity bills — you can save an average of $1,531 annually on energy bills by going solar.

Solar is a large upfront investment. But the cost of installing a system has decreased by more than 50% over the last 10 years, and incentives like the 30% federal solar tax credit can lower your cost even further.

However, certain conditions and roof features can mean solar isn’t worth it for you. For instance, if your roof is shaded, does not have enough space or is oriented north, your panels may underperform. Additionally, if you live in an area that experiences many cloudy days and has few solar incentives, you may see fewer savings over the lifetime of your panels.

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Solar panels are worth it for many homeowners due to the estimated $25,800 in savings over the estimated 25-year lifetime of a solar system after recovering the upfront cost in around 8.5 years.

Several factors can play a role in whether or not solar panels are worth it for you, including:

For instance, if you live in a state that receives a lot of sunlight and has ample solar incentives, in addition to having a large, south-facing roof, you will see high solar energy savings. On the other hand, if you live somewhere with less sunlight, fewer solar incentives and a steep roof, solar may still be worth it but you will likely see lower energy savings.

The location of your home plays a vital role in the value of a solar power system. If you live in a part of the country with lots of sunlight exposure throughout the year, you will get more out of using solar panels than in cloudier locations. The map below displayed the “specific photovoltaic power output” or “PVOUT” expected in each state – which is the estimated kWh produced per kW of installed solar capacity. The higher the PVOUT the more energy each of your solar panels will produce.

Though sunny states like Florida, Texas, California and Arizona are ideal regions to install a solar system, your panels may not generate enough energy to offset the upfront installation cost if your roof is shaded by trees or buildings. But if your roof is unshaded or faces south, southwest or west, your panels will receive more direct radiation from the sun and generate more solar energy.

Locations that see more extreme weather events and power outages are also better suited for solar systems with battery storage. You can use a solar battery to store excess energy during the day to use during blackouts, at night or on cloudy days.

It is important to note that it is not just sunshine that varies with location. A state’s energy prices can also factor into whether solar is worth it for you. High power costs can help you achieve a faster system payback, while lower power costs mean lower solar energy savings. A user on the Bogleheads public forum puts it this way: “Solar investment on the grid in California with its high rates can be worth it. In Texas, solar payback is way too long.”

The size, shape and slope of your roof are also important factors to consider. According to Garrett Nilsen, the deputy director of the U.S. Department of Energy’s Solar Energy Technologies Office, roof structures can be one of the biggest roadblocks to going solar.

“If there are trees near your home that create excessive shade on your roof, rooftop panels may not be the most ideal option,” he said. “Solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs can be suitable, too. Installers can model roofs to determine if the orientation and slope are suitable for energy generation.”

Steep roofs make installation challenging and can increase labor costs or require additional mounting equipment. Roofs with plenty of surface area and few obstructions — such as skylights and chimneys — are ideal. You can still add solar panels to smaller roofs but would benefit from installing efficient panels, such as monocrystalline panels, that generate more power using less space.

Solar tax incentives and rebates are available at the federal and state levels. The federal solar tax credit, formally called the Investment Tax Credit (ITC), allows you to claim 30% of your total system cost as a credit to reduce your federal tax burden.

If you don’t owe thousands of dollars in taxes each year, you can roll over the remaining credit amount for up to five years. We suggest consulting a tax adviser to determine how to best capitalize on the credit.

Other solar incentives vary from state to state. Many state governments and local utility companies offer solar rebates, credits, and sales and property tax breaks to make solar more affordable. Many states also offer net metering programs to help lower your power bills even more. We encourage you to use the Database of State Incentives for Renewables & Efficiency (DSIRE) to learn what rebates and solar tax credits are available in your state.

Before installing solar, it is worth taking stock of your monthly energy consumption. According to the U.S. Energy Information Administration, the average household uses around 893 kilowatt-hours (kWh) of electricity per month. On average, a residential solar setup can produce between 350 kwh to 850 kWh per month. Therefore, going solar can help you save as much as 95% off your utility bill. As a Reddit user shared, “Our last bill before getting solar was just under $800. Our next bill was $180.”

If you live in a state with high electricity rates, switching to solar will likely be a good investment. However, if your household does not require a high energy consumption to operate day-to-day, you may not save enough to offset the installation system cost. Residential solar systems can cost anywhere from $15,000 to $25,000 or more.

You can also contact your local utility company to see if it offers an established net metering program. Many states mandate net metering, which can help maximize your energy savings. Net metering allows you to send the excess energy your solar system produces back to the grid in exchange for billing credits. Your utility company will deduct any credits from your monthly electricity bill, saving you money by providing clean energy for your home.

However, the benefits of net metering are not the same in every state. Some states offer energy credits at a value that matches the retail energy price. In some areas, the value can be much lower, reducing your energy savings significantly. Another Reddit user shared a similar experience: “In Southwest Michigan, you cannot get full net metering [rates], so I only get about a 50% credit for the energy I give back. That increased the [system] payback period to a great extent, changing it from about seven to eight years to about 20 years.”

According to our 2023 survey of 1,500 homeowners with solar, respondents reported paying an average of $15,000 to $20,000 for their solar panel systems. However, every solar installation is different, and the Solar Energy Industries Association (SEIA) reports that a solar installation can cost upwards of $25,000.

Solar Panel System For House The total cost of your solar panel system can vary depending on where you live and the solar provider you choose. You can compare average price points for some of the top solar providers in the U.S. below. Cost figures represent the total cost of a solar panel system with installation.