For homeowners trying to find out how much a 3x5 solar panel costs can be a bit complicated. It's like going to buy a car but asking if you can just buy a piece of the engine. Like most things part of a system, many costs come into play when breaking down the price of one component. Labor, operational costs, and additional electrical equipment, such as inverters, determine the final price. Unless you're replacing defective panels, which are typically covered by a system's warranty, the cost of a single 3x5 solar panel can vary.

Beware of Cheap Solar

The first thing - if the cost of solar panels seems too good to be true, it's probably not. Before credits or rebates, the average total cost for homeowners to install solar panels can be compared to buying a new car. The average cost to install solar panels in the US is around $12,000 after federal tax incentives. Now you definitely could get a small system installed with low-end panels for about $5,000. On the other end, however, installing a high-grade home solar system can set you back north of $40,000. Trust us; you don't want low-quality or inefficient solar panels installed on your home. They aren't worth the trouble.

The other thing to be aware of is that "Cost Per Watt" is the most common way to quote prices in the solar industry. For example, a small 5kW system runs between $3-$5 per watt on average in the US. This cost per watt is the only way to compare the relative value between panel systems of different sizes. 

Solar Panel Cost Has Been Higher

The good news for consumers is that the COVID-19 pandemic has forced many solar installers to drop their prices. This year Tesla Energy announced a basic home solar package at just $2.00 per watt. Many solar installers needed to bring down their prices just to compete. As a result, solar panel costs saw a drop of almost 4% in the last half of 2020 alone.

If you are planning a DYI home solar project, keep in mind that you're not only cover the equipment costs. You will also need to handle all the costs associated with permitting, electrical wiring, and inspections. Juggling all this can also become a considerable timesuck, especially when dealing with your local government. Not to mention trying to navigate bureaucracy during a pandemic.   

Incentives to Lower Solar Costs

While it's true that solar has a high upfront cost, homeowners can always use loans, leases, or power purchase agreements to help finance a solar installation. Also, be aware that state programs like the SGIP in California allow homeowners to install solar at almost no cost if they meet certain criteria. At the beginning of the year, Congress extended the (ITC) a federal tax credit allowing taxpayers to claim 26% of installation costs for home solar systems purchased by December 31, 2022. So if you have a tax liability, you'll probably want to discuss going solar with your tax professional.  

It's important to know that solar could potentially cut your electric bill by 75% if you do it right. The average American's electric bill is somewhere between $100 and $200 per month, making it a yearly expense of around $1,500. Since solar maintenance costs are low and the sun is a free energy source, your return on investment is high once your payback period is over.

If you have questions about solar, want us to look at your electric bill to see if solar would even make sense in your situation, reach out, we are here to help you.