You may be asking if solar panels are expensive. There’s no doubt about it: Solar panels are expensive, costing between $10,000 and $30,000 for most homes. There are mainly two reasons why solar panels cost as much as they do:
The first is the solar panel cost. Producing panels requires advanced manufacturing as well as expensive raw materials, such as high-quality silicon for solar panels and lithium for solar batteries.
The second is due to soft costs, which include a professional solar installation that is safe, meets local regulations and manufacturer warranties, and can pass necessary inspections.
That, of course, is the short answer. The full story is that several factors contribute to the cost of solar panels. Our analysis of solar panel cost info shows that prices vary widely based on brand choice, system size, location, roof type, and other factors.
Just how expensive are solar panels?
Solar panel installations typically cost between $2.50 and $3.00 per watt before tax incentives. So, a typical 6-kilowatt (kW) home installation will cost between $15,000 and $18,000 which some would consider expensive.
Nevertheless, if you live in a large house or use a lot of electricity, something like a 10kW solar system would be more sensible. A 10kw system will cost you between $25,000 and $30,000; again, this is the total price before incentives.
Shock at first sight?
You may have been stunned when you first saw the price of solar panels. This shock is made worse when you hear that home solar energy systems are much cheaper in some other countries.
But solar panels are much more affordable now than they were a few years ago and, in many areas, now offer an excellent return on investment. Usually, the high cost is due to other components like the On Grid Solar Inverters.
How much will I save with solar energy?
The savings from solar panels come in the form of drastically lower electricity bills. The average savings for a typical 6kW solar panel installation in Dubai is approximately $1,500 per year.
Another way to look at savings is by calculating the payback period for solar energy. The payback period is the time it takes you to earn back the costs of your initial investment. After that time, every watt of power you generate is a profit. In most areas, the payback period for solar panels is currently 4-9 years.
Why are indirect costs so high?
The large proportion of indirect costs in the total cost of solar panels often surprises consumers. However, solar panel systems may not seem as expensive when you consider the services of solar panel companies and the installation work they do.
Each residence is different and requires a custom design and installation. Solar energy companies need staff with the right skills and qualifications. And just like other businesses, they have to factor in profit, overhead, and marketing costs.
How can you lower the installation cost?
Even with soft costs and additional fees, consumers can find ways to lower the final price of their home solar energy system.
Take advantage of the federal investment tax credit for new installations to receive up to 30% of your investment, if that’s available in your area.
There are many incentives available at the state, utility, and local levels, some of which are worth thousands of dollars.
Solar panels cost less than before
According to the Solar Energy Industries Association (SEIA), the average installed price of solar energy systems fell 70% during the 2010s. Solar power is not as costly as it used to be.
If we shorten the time frame and look at just the second half of that decade, we see that solar panel costs decreased by 37%.
Based on the aforementioned data, a 6kW residential solar panel system, costing an average of $17,700 at current market prices, would have cost $28,095 in 2015 and a whopping $59,000 in 2010.
The analysis of solar panel price trends
Price declines have significantly changed the cost-benefit equation for residential solar. Solar panels are not as costly as they used to be and in most states, the payback period for solar is now 4-9 years.
Solar panel costs have been stagnant since 2020, due in part to rising commodity prices and supply chain constraints. It is unlikely that we will see substantial price declines in the future as solar manufacturing technology has matured.
Does the installation company affect the price?
A decent solar equipment shop in Dubai would often offer incentives to make products more affordable to customers. These offers can positively impact the final price of residential solar energy systems.
Contact more than one installation company to ensure you get the best price. Bear in mind that lower prices do not always mean a good deal.
What constitutes the cost of a solar system?
There are several components in residential solar installations that affect the total price.
The cost can be grouped into two categories, hardware costs and “indirect costs”. According to our data:
Hardware costs cover about 46% of average solar panel costs. This covers solar panels, solar inverters, and the rest of the system like installation and assembly, wiring and solar DC cable, etc.
Indirect costs account for 54% of average solar panel costs. This includes installation and labor, sales and marketing expenses, and permit and inspection fees.
How expensive is it to keep a solar panel system?
Annual maintenance and inspections are vital to protecting energy sources as the parts wear and tear, become obsolete, or are damaged. Keeping a solar panel is not expensive at all. Most of the cost is due to parts like tier 1 solar inverters.
While the solar company will cover any warranty claims, all other maintenance is the sole responsibility of the owner.
An annual inspection by a local solar installation company costs approximately $150. A professional cleaning to clean the panels of dirt and debris averages $10 to $20 per panel. Equipment repair and replacement costs differ per case.
Using these estimates, a house with 10 rooftop solar panels would spend between $250 and $350 each year to keep its system running smoothly. A home with 30 solar panels will require around $450 and $750 in annual maintenance costs, which may sound costly now, but you will earn this back in the long run.
Frugal homeowners can try cleaning their panels to lower their costs. However, regular professional cleanings are still recommended to maintain optimal system performance.
You can contact us to find out the total cost of a solar project, for instance, you can learn the latest Longi solar panels price on our website.