On average, installing solar panels in a 2,000-square foot residential area can cost $18,000 to $20,000. This amount equals $2.75 to $3.35 per watt. But you are qualified to get a tax credit from the government for switching to renewable energy. This will reduce your expense between $13,300 to $14,800, which is 80% lower than a decade ago.
Factors that affect the cost of installing solar panels in your home
Size of the solar system
Solar system size is the amount of energy all solar panels can give you, given they’re in perfect condition and fully functional. It’s measured in kilowatt-hours (kWh).
A lot can affect the energy output of a solar panel. Its efficiency (amount of sunlight it can convert into electricity), its position and angle (should be fully exposed to the sun), the temperatures in your area (the higher the temperature, the lower the efficiency or energy output), etc.
The size of your solar system depends on how much electricity you need to power your home and run your appliances. The more power you need, the bigger your solar systems should be.
Since solar panels harvest sunlight into usable electricity, it matters that your area has sunny weather. The more the sun shines, the fewer panels you’re going to need, and the lesser cost you’ll have to pay.
The incentives of your state or municipality also matter. Like the federal tax credit, your locality can also provide tax incentives that can save you money.
Your local market conditions can also increase or decrease installation costs. Competitions can dictate market pricing; the more competition, the lower the cost.
Solar panel companies offer different prices for their products. Their prices are affected by their name and reputation, financial health, product quality, and manufacturing size.
Premium manufacturers, such as LG and Panasonic, have reputable names, strong corporate bonds, good financial standing that makes them capable of granting warranty claims, and high-quality products using the latest technologies. These brands sell more expensive solar panels.
On the other hand, Tier 1 brands like Jinko have lesser product quality, but it doesn’t fall far behind Panasonic and LG. Their solar panels are 1% to 2% less efficient than those produced by premium brands, but they have large-scale production and a higher market share, allowing them to lower their prices.