What Do Solar Panels Cost? (And Are They Worth It?)

Solar panels have become a popular choice for green-minded, savvy homeowners looking to reduce their energy bills, decrease their carbon footprints, and earn credits for the extra energy they produce.

Solar panel installation has a significant up-front cost, yet the long-term benefits are well-documented, and it's become more accessible than ever to recoup your investment.

In this article, we'll explain typical solar panel installation costs and different financing options. We will also provide you with the information you need to decide whether to install solar panels or use another solar energy plan.

As of 2024, the average cost of installing 11 kW of solar panels in Texas was $29,589, and the national average was $29,926.

It's worth noting that these are the total costs before any federal tax credits (see the .gov eligibility breakdown), utility provider incentives (see our SolarSPARC® incentive rebate), or buyback programs are deducted.

It's interesting to note that, often, the price of the solar panels can actually only make up roughly 12% of the total installation cost. Labor costs for installation can vary. This will heavily depend on the complexity of your roof, the number of panels you choose to install, and how easily the installation team can connect the system to your electrical grid.

Other factors contributing to the total bill include electrical wiring costs, labor costs, racking equipment (which secures your panels to your roof), and any required permits.

The type and brand of solar panels will also have a strong impact on the price you pay. A higher-quality brand will generally have a better warranty and customer support, and may last longer – but the price could be higher.
 

Location and Roof Style

The amount of sunlight your location gets directly impacts the efficiency of your solar panels. Further, the design and material of your roof can impact installation costs.

For example, a steep roof may require extra time and work to install solar panels. However, this does not necessarily mean that it would be impossible to install solar panels on a steep roof—it may just look like an “east-west” system vs. a system that faces south.

Solar System Size

The size of the solar panel system you need depends on your energy consumption. Larger systems with more panels will have higher up-front costs, but they can generate more electricity, leading to greater long-term savings.

To see what your current energy consumption is like, refer to your energy bill, and look at the last year to account for the high usage periods. This will help you figure out what size of system you’ll need.

Also, consider that future usage changes, like adding an electric vehicle charging station or installing a pool, will increase the amount of energy you need.

Maintenance

The cost of maintaining your solar panel system will be relatively low – especially directly after installation, but it's important to budget for regular cleaning and potential repairs.

One of the most compelling reasons to invest in solar panels is the potential savings on your electricity bills. By generating your own electricity, you can reduce the amount of electricity you use from your local grid, and save money each month.

When your solar panels generate energy to power your home, it offsets the amount of energy you need to purchase from your electricity provider. It is not uncommon for homeowners to see a significant decrease in their monthly energy bills, depending on the sizes of their systems, and their energy consumption.

Keep in mind, though, that the savings you achieve also depend on the electricity plan you choose after installation. For example, you may consider a 1:1 buyback plan, in which your utility company credits you “one for one” for the excess energy your panels produce. “One for one” means that they will credit you for the excess energy your panels generate at the same rate the electricity company charges for electricity consumption.

This can offer additional savings (see our Renewable Rewards Buyback Plans as an example), depending on your state and utility provider.

Are Solar Panels Worth It?

Ultimately, the amount you could save on your energy bill after installing solar panels depends on the following:

• How much sunlight you get
• How your solar panels are configured on your property
• How much energy your solar panels produce versus how much energy you use
• How long you plan to live in your home
• Whether you have a solar panel backup battery

The average American homeowner with a standard solar panel array will likely realize savings to the tune of about $1,530 per year on their energy bill, and about $25,800 during the entire lifetime (roughly 25 years) of their solar panel array. When you consider that the average solar installation payback period is only around 8.5 years, this is quite cost-effective.

While the up-front cost of solar panels can be substantial, there is a wide variety of financing options available to make this investment more accessible:

• Personal + solar loans: Personal loans or solar loans can spread the cost over several years. These options mean that, although you have financed the panels, you still qualify for available tax credits and incentives from your electricity provider.
• Leases: Leasing solar panels can reduce up-front costs, but it doesn't provide as much long-term financial benefit. Leasing means that, although you wouldn’t have as much of an up-front cost, you would not own the solar panels, you would not be able to choose your energy provider, and you would not be eligible for incentives and tax credits.
• Power purchase agreements (PPAs): A PPA essentially means that a third party manages the installation and maintenance of the solar array, and you pay a fixed rate for the solar energy, often lower than your utility rate. Once again, you would not own the panels, so you wouldn't be able to take advantage of solar incentives.

The financing method you choose can significantly affect both the up-front costs and long-term savings.

For example, a loan may offer greater financial benefits over time, as you'll own the system and receive all the savings from reduced electricity bills. Still, you will likely need to factor in interest rates for financing. In contrast, a lease or PPA may have lower up-front costs, but it could reduce savings over the lifespan of the solar system.

When considering clean energy, you have two primary options: installing solar panels or subscribing to an electricity plan powered by wind or solar energy. Each option has its own set of costs and benefits, and it's important to understand these differences to make the best choice for your needs.

Installing solar panels requires a significant up-front investment, but it can lead to long-term savings through reduced electricity bills. On the other hand, subscribing to a clean energy plan typically has lower up-front costs, as you're purchasing renewable energy from a third-party provider rather than generating it yourself.

Even with solar panels, homeowners will still need to sign up for an electricity plan to cover times when their solar generation doesn't meet their consumption, and to take advantage of 1:1 buyback plans.

Having an energy plan to fall back on is especially important during periods of low sunlight, such as  cloudy days or at night, when your panels aren't producing electricity.

Comparing the costs and benefits of different plans is crucial to maximizing savings and ensuring that you have a reliable energy source year-round.

For a more detailed comparison between installing solar panels and subscribing to a solar or clean energy plan, read our Solar Plans vs. Installations article. This guide provides insight into the pros and cons of each option, and helps you determine which is the best fit for your home and energy needs.

Investing in solar panels offers more than financial savings; it also provides long-term value and benefits that extend beyond your monthly energy bill.

Home Resale Value

An often-overlooked benefit of solar panels is their impact on the resale value of your home—and how long they last. A study by Zillow showed that a solar system can increase the value of a home by 4%—which makes perfect sense, as a well-maintained solar panel array can last up to 25 years.

Environmental Impact

Switching to clean energy is one of the most effective ways to reduce your carbon footprint. Solar panels generate completely renewable energy, which helps combat climate change, and contributes to a cleaner, healthier planet for future generations.

Deciding whether to install solar panels is a big decision that depends on your personal lifestyle.

Factors like whether you own or rent your home, your roof layout, budget, energy needs, and environmental priorities all play roles in determining whether solar panels are a good investment for you.

Also, it's important to remember that solar panels aren't the only way to get clean energy into your home—choosing a wind or solar energy plan may be a better fit.

Green Mountain Energy can help make your clean energy journey affordable and easy. Take a look at the plans we offer today.