Factors Affecting Solar Panel Cost

The cost of solar panels varies for homes across the country. This is because the following factors impact costs for homeowners.

Home energy use

The amount and type of power your home relies on will affect the cost of solar panels. For example, a home that relies heavily on electricity will want a larger solar system than a home that uses mostly gas appliances.


Where you live has one of the biggest impacts on your solar panel costs. Part of cost of living In an area it is how much you pay for electricity that influences the price of a solar panel system.

Also, your geographic location determines the amount of sunlight your home receives. some states with most of the sunlight throughout the year they include Arizona, New Mexico, Nevada, Texas, California, Florida, and Utah.

But the presence of sunny days does not necessarily mean lower costs. Instead, the most affordable states for solar panel installation often have financial incentives at the state level to lower the overall cost to homeowners.

Solar tax credits

Solar tax credits are available at the federal level to offset the costs of homeowners interested in installing solar panels on their homes. A tax credit is a dollar-for-dollar savings on taxes you already owe the federal government. The tax credit serves as a major incentive because you’ll basically get a discount on the high price of an installation.

the Investment Tax Credit provides a 26% tax credit for solar panel systems installed between 2020 and 2022. In 2023, homeowners who install solar systems will receive a 22% tax credit. As of now, the tax credit expires in 2024, but it is possible that Congress will extend this tax credit opportunity to encourage solar energy in the US.

Additionally, homeowners in some states can take advantage of state-level tax credits to further offset their costs.

system size

The larger your solar panel system, the higher the costs. Your home’s energy use determines how many panels you’ll need for an adequate amount of power generation.

When deciding on the size of your system, the solar company should be able to help you determine the appropriate size for your home.

Also, your solar system goals will come into play. If you’re just looking to lower your energy costs, you may need a smaller system. But if you want to eliminate your electricity bill entirely, you may need a larger system.

The ceiling

Residential solar panels are usually installed on the roof. With that, the condition and design of the roof will affect your costs.

Solar panels typically need to be tilted to get maximum sun exposure. Roofs without the proper pitch may require the installation of angled decks, increasing your costs.

If the roof is older or in poor condition, many solar companies recommend repairing or replacing the roof before proceeding with solar panel installation. Of course, adding a new roof to the mix will increase your costs.

home environment

Not all homes are good candidates for solar panels. If yours is shaded by some beautiful trees, chances are you won’t get the most out of your panels without cutting down the trees. Removing trees from your lot affects your overall installed cost and can cause your energy use to increase in the summer months. If one of the main motivations for using solar panels is environmental impact, cutting down trees defeats the purpose.

However, if you live on a sunny lot, it makes sense to consider solar power. A solar energy company should be able to give you a reasonable assessment of the suitability of your home. But you’ll have to decide for yourself if the changes needed for an optimal solar setup are right for your home.