How Much Do Solar Panels Cost?

Solar panels can help save up on electricity bills and can also be used as a second source of power, especially if one lives in an area with unreliable power supply. However, installing solar panels on ones roof does require a significant investment initially, which will vary depending on multiple factors.

Average power consumption rate

electricity cost by state
The cost of electricity by state in the United States

The rate of power consumption varies depending on the number of electrical appliances, the types of electrical appliances and plenty of other micro-factors like the weather (room heaters and air-conditioners consume a lot of power), the habit of the individuals using the electricity, the cost of electricity in a particular state (most expensive in Hawaii, for example), etc. Nevertheless, in a rough estimate, it has been found that a home in the US, consumes power at 1 kW per hour on an average. As the usual costing associated with per kWh of electricity is $0.10 in the US and there are 24 × 30 = 720 hours in a thirty-day month, one would say that the electricity bill should be somewhere around $72 per month.

How much power can solar panels generate?

solar energy production
Solar panel output varies

Generally speaking, photovoltaic cells can produce about 10 watts of power per square feet, with a panel conversion rate of 12% on an average. What this means is that in order to produce 1 kW of power every hour, 100 square feet of solar cells will be necessary. Unfortunately, once the sun goes down, the cells won’t be manufacturing the estimated kW of power every hour, that an average home needs. Additionally, there are other factors like the season, the cloud cover, the weather, the daylight hours and the temperature, which also affects the productivity of your solar power generator.

How big should your setup be?

The size of the setup will largely depend on the location. For example, if you live in a state like Arizona, where 7 hours of sunlight is expected daily, your setup can be much smaller than what is required in a place like Chicago or Seattle, where just 3 hours of sunshine is quite the norm during certain sections of the year. It is estimated that around 400 square feet to 800 square feet of solar panels (4kW to 8 kW) should cover the needs of most homes in the US, spread over the multiple states. The exact size of the array can only be determined after considering all the factors mentioned above.

How much will it cost?

There are various aspects that must be considered while trying to determine the costs associated with installing a photovoltaic (PV) system, but on an average, it should range in-between $7 to $9 per watt without subsidies. What this means is that a 5 kW solar power generator can set you back by somewhere around $25,000 to $35,000. Government incentives, along with subsidies from utility companies can minimize this initial setting-up cost by a lot and in some states it is even possible to lower this initial expense below $10,000. By making use of the different incentives and subsidies that are available, most solar systems can payback the initial investment by roughly 12 – 15 years or less.


In accordance with the Federal Solar Tax Credit, 30% of the total amount which a citizen spends on buying and installing a solar power generator will be deducted from the citizen’s yearly federal tax bill. The tax rebate is applicable on any and all home or business related solar power systems. In order to understand the current policies and incentives offered by the various states on purchase and installation of solar power generators, check the official listing page .