Are Solar Panels Worth It in 2024? (2024)

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

• The weather and climate where you live
• Your roof’s steepness, shading and size
• Solar incentives available in your area
• The amount of energy your household consumes

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.

Location

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.”

Your Home’s Roof

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.

Local and Federal Tax Incentives

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.

Energy Consumption

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.

Electric Bill Savings by State

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.

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.

*Pricing is based on responses to two surveys we conducted in 2023 of 2,000 total homeowners with 8 kilowatt (kW) solar systems as well as pricing information obtained directly from SunPower, Tesla, Palmetto and local providers. Your cost may vary.

The state you live in can also factor into how much your solar panel installation will cost:

In addition to your location and the provider you choose, other factors can influence the cost of your solar system, including:

• Your home energy needs
• Your solar system size
• The type of solar panels you install
• Additional equipment like solar batteries or inverters
• Other related services, such as tree removal, energy efficiency audits, electric vehicle (EV) chargers, etc.

The only way to know exactly how much your solar panel system will cost is to get a quote from a trusted solar installer in your area. To get matched with a top provider, click here for a solar estimate today.

How Much Can You Save With Solar?

The average payoff period for a solar panel system in the U.S. is around 8.5 years, generating an estimated lifetime savings of $25,800. After paying off your solar system, you’ll enjoy significant savings by drastically reducing or eliminating your energy bill. Considering the average solar system lasts 25 years or longer, that’s over 16 years of net savings. Most people who install solar on their homes will save thousands of dollars in energy costs over the lifespan of their solar energy system.

There are, however, some instances when solar panels may not yield as high of returns as you want. According to Nilsen, local electricity rates, your total system cost and whether you pay up-front, take out a loan, or lease your system can all affect your return on investment (ROI). Changing compensation patterns with your local utility or an unexpected lapse in your system’s performance may cause your payback period to take longer.

In these rare instances, Nilsen advises contacting your solar installer about your system’s expected production and any discrepancies with the current output.

In addition to offering protection against rising electricity prices, a solar installation with a storage system provides a valuable backup during power outages. If you live in an area prone to severe weather or blackouts, installing solar panels with a backup battery can be more worthwhile.

Three major pros of switching to solar include reducing your carbon footprint, saving on energy costs and taking advantage of solar incentives.

Reduce Your Carbon Footprint

When you install a photovoltaic (PV) system, your panels will generate electricity from the sun, reducing your reliance on fossil fuels. The National Renewable Energy Laboratory (NREL) estimates that for every 1,000 kWh of clean electricity your solar panels generate, you save 1,400 pounds of carbon dioxide emissions from traditional energy sources. This is the equivalent of saving nearly 17,000 pounds of carbon dioxide emissions for the average U.S. household every year.

Save on Energy Costs

Although the initial cost of solar panels can be high, the long-term benefits can significantly outweigh the upfront investment. Because you’ll be generating your own electricity, you can reduce or even eliminate your monthly electricity costs. Additionally, as the cost of going solar has decreased significantly over the last decade, the return on investment homeowners see when installing a solar array has also increased.

Additionally, installing solar panels can increase the value of your home and protect you from fluctuating utility rates, helping you save even more over time.

Increase the Value of Your Home

Installing a solar system can significantly increase your home's value, with every $1 reduction in annual energy bills translating to a $20 boost in property value, according to the Appraisal Journal. Zillow reports that energy efficiency is a highly sought-after feature for potential home buyers, with 67% considering it "very to extremely important" in the 2021 Zillow Group Consumer Housing Trends Report. As a result, home buyers are willing to pay 4.1%, or $9,274 more for houses with solar than for similar properties without solar installations.

High up-front costs, weather dependence and home aesthetics are three reasons that homeowners may hesitate to go solar.

High Up-Front Costs

Although most homeowners with solar save money in the long run by dramatically reducing or eliminating their energy bills, solar is still an expensive investment. According to our 2023 poll of 1,500 homeowners with solar, most respondents reported paying between $15,000 and $20,000 for their system. While paying the total cost of your system upfront will result in the most savings, many installers offer multiple financing options, including solar loans and leases.

Weather and Climate Dependence

Clouds, seasonal variations and obstructions like trees can cause your solar panels to generate less energy. Additionally, solar panels do not generate energy at night when the sun isn’t out. All of these factors can cause inconsistencies in the efficiency of your solar panels.

Energy storage solutions like solar batteries can help abate these problems, as you can store your energy for later use. Most states also offer net metering, which allows you to sell back the excess energy your solar panels generate to the grid in exchange for a credit on your utility bill. Net metering credits can offset the cost of the energy you’re purchasing at night when your panels aren’t operating.

Aesthetics

Some people prefer the appearance of a traditional roof and dislike how rooftop solar looks on a home. To address this issue, several solar manufacturers have developed solar shingles that blend into the roof and accommodate concerns about solar panel appearance. However, solar shingles are typically more expensive and not offered by many solar installers.

There are several factors to consider before deciding to install solar panels. Discussing the following questions with your solar installer can help you determine the payback period of your solar panels, and decide if solar panels are worth it for you.

• Do I live in an area that receives regular sunlight throughout the year?
• Does my roof face south, southwest or west?
• Is my roof unshaded, or mostly unshaded?
• Is my roof large enough to accommodate a solar panel system?
• Will my roof last as long as or outlast my solar system?
• Do reputable, established solar companies exist in my area?
• Are any solar tax incentives and rebates offered by my utility company or local government?

We recommend speaking with a solar expert to decide if solar makes sense for your household.

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