Jul. 21, 2025
With a solar energy system, you generate your own electricity at home, which means you don't need to buy as much--or possibly any--from your utility company.
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Some utilities even compensate you for any excess electricity your system produces and sends to the grid through a policy called net metering (more on this below). And, depending on where you live, you may even have access to other solar incentives such as local rebates and tax credits. Your exact savings with solar will depend on a few factors, including how much you pay for electricity, but it’s usually a wise financial investment for most homeowners.
Many homeowners install solar panels for environmental and health benefits. Solar panels are a clean power source, meaning they don’t produce harmful greenhouse gas emissions like carbon dioxide or methane when generating electricity. Solar also results in fewer air pollutants (like sulfur dioxide and particulate matter), which can cause health problems. Reducing our reliance on fossil fuels keeps our air cleaner, slows the effects of climate change, and helps reduce disruption to wildlife habitats.
The easiest way to find out how much you pay for electricity (and how much electricity you use per month) is to take a look at your utility bill. (Review EnergySage's guide to reading your electric bill to find out exactly what to look for.) If your bill doesn’t show the rate, you can divide the total amount you owe by the total kilowatt-hour (kWh) of electricity you used to find your effective cost per kWh.
In most cases, adding solar panels increases your property value. Multiple studies have shown that homes with solar energy systems sell for more than homes without—it can add as much as $24,000 to the resale value! However, your property value will only increase if you own your solar panels, not if you’re leasing them. For details, check out our guide to selling your house with solar.
If you connect your solar panel system to the grid, you might be able to benefit from net metering—one of the best solar incentives for home solar. Your utility company essentially works like a bank account for all the energy your solar panels produce in a given month.
When the sun shines, your home first takes as much power as it needs from the solar panels. If the panels generate any excess energy, it gets sent back to the grid. In return, your utility gives you credits. When the sun isn’t shining and you need grid electricity to power your home, you won’t have to pay for it until those credits run out.
Most home appliances don't run on DC electricity, so devices called inverters convert it to alternating current (AC) electricity. Once converted, the electricity flows into your home, powering everything from your lights to your fridge to your cell charger. If your panels produce more electricity than you need, the excess goes to the grid (which is where net metering comes in) or a battery, if you have one installed.
It depends. Solar panels need sunlight to generate electricity. The more sunlight they get, the more power they generate. They’ll produce less energy when the sky is cloudy and won’t produce any energy after the sun sets. But with high electricity costs and financial incentives, solar is a smart choice even if you live in a cloudy state. For example, as of , the average solar homeowner in the State of Washington still saves more than $20,000 on electric bills over their system's 25-year lifespan.
Unless your solar energy system includes battery storage and you're fully off the grid, you'll still receive a bill from your utility. However, you can dramatically reduce your bill—or even cut it down to $0—with a solar panel system that matches your energy use.
Yes, it’s possible to go off the grid with a solar energy system that includes battery storage. But truthfully, it's costly and unnecessary for most homeowners, especially those who live in more urban areas.
The majority of homeowners who install solar panels on their property are still connected to the grid. This allows you to draw power from the grid when your system is not producing all the power you need and, if you have access to net metering, earn credits for the power you send to the grid when your panels are overproducing.
No. If your solar panel system is connected to the grid, it will shut off during a blackout to prevent emergency responders and electricity utility repair people from being injured by your panels sending power back to the grid. If you want to keep your lights on during power outages, you’ll need to pair your solar panel system with a solar battery.
Solar panel maintenance costs homeowners roughly $30 per kilowatt (kW) installed per year—about $330 per year for the average 11 kW system—according to a study by the National Renewable Energy Library (NREL). But, most solar panel owners will pay much less. This $30 per kW figure includes operations beyond routine maintenance, including insurance, asset management and security, and equipment replacement costs.
Truthfully, solar panel systems generally require little to no maintenance over their 25-to-35-year lifetime. Solar panels include durable tempered glass that can withstand most weather conditions and only require infrequent cleaning. If there’s a technical or mechanical issue, most equipment manufacturers include warranties that vary from 10 to 40 years, although terms depend on the company.
Solar panels usually still generate some electricity on snowy days. If there's snow sitting on your solar panels, it will significantly reduce their production. But, since most panels are tilted at an angle, snow tends to slide right off (and as a bonus, cleans your panels in the process), meaning the accumulation rarely lasts. Snow generally isn't heavy enough to cause structural issues with your panels. Still, you might want to consider snow guards to prevent sliding snow from potentially injuring you or your family members.
The cost of installing solar panels is about $30,000 before any incentives or rebates, but most homeowners pay less. The average U.S. solar shopper needs about 11 kilowatts (kW) of home solar to cover their electricity usage. Based on thousands of quotes in the EnergySage Marketplace, you'll pay about $20,948 to install a system around that size in after federal tax credits.
Solar rebates and incentives vary depending on where you live, who your utility provider is, and other criteria unique to your situation. The most significant solar incentive is available to homeowners nationwide—it’s the 30% federal investment tax credit (ITC), which allows you to deduct 30% of the cost of your solar energy system from your taxes. Some states offer additional tax credits, and certain municipalities and utilities offer other incentives, like cash rebates.
It depends on your reason for going solar. If you're interested in maximizing the financial returns of your solar energy system, buying your solar panel system is the best choice, either with cash or a loan. If you prioritize a low upfront-cost, maintenance-free way to reduce your energy bills and help the environment, you may want to consider a PPA.
We typically don’t recommend solar leases because they often lead to the lowest savings. And, with either a lease or a PPA, you won't be able to take advantage of financial incentives. But truly, it’s a personal choice that depends on your specific circumstances. If you're considering a solar lease or a PPA, do your research and read the agreement carefully before signing.
The main difference between secured and unsecured solar loans is that secured solar loans require that you promise an asset, usually your home, as collateral for the money you borrow. Unsecured solar loans don't require an asset, but their interest rates are generally higher to make up for the increased risk taken on by the lender. To understand which financing option is best, you can evaluate offers for secured and unsecured loans on EnergySage.
A lot of different institutions offer solar loans, including local and national banks, specialty financing companies, manufacturers, and credit unions. To choose the best solar loan, we recommend comparing options from a few financing providers. Look for ones with low upfront fees, even if that means higher interest rates—it will lead to better long-term savings, especially if you end up paying off your loan early (which most homeowners do).
If you can afford to pay your electric bill, you can afford to go solar. There are $0-down solar financing options, including both solar loans and solar leases/PPAs, that make it easy for homeowners to start saving on their electricity bills right from the start. Some financing options require certain credit scores, but shopping around will help you find one that works for you.
The ideal size of your solar energy system depends on your electricity usage and how much sun your roof gets, among other things. Look at your past electric bills and compare offers from licensed, pre-screened solar installers to determine the best system size for your needs. And, if you're considering future electrical upgrades, like heat pumps, an induction cooktop, or an EV charger, make sure to tell your installer so they can size your system to meet your future needs.
For maximum output, you'll want a roof that's roughly south-facing, has minimal shading, and is tilted between 15 and 40 degrees. But even if your roof doesn't have an ideal layout, solar is often still worth it. East or west-facing systems will produce plenty of power. And, you can always add racking equipment to change the angle of your solar panels relative to your roof.
It depends. Solar energy systems can last for 25 to 35 years. If you need to replace your roof within that time frame, removing and reinstalling your solar panels won't be cheap. So if you know your roof needs maintenance soon, we recommend getting it done before going solar.
Solar panel systems are built to last. Typically, they'll generate electricity for 25 to 35 years. Various components will need to be replaced at different times; for example, inverters generally last between 10 and 25 years. The solar panels themselves are very durable, capable of withstanding snow, wind, and hail, and are usually protected under warranties between 10 and 40 years.
If you own your solar energy system, your house will likely sell at a premium, possibly as much as $24,000 more. But if you lease solar panels and want to sell your home, it's a different story: You'll either need to buy out your lease before you put your house on the market, or work with your leasing company to transfer it to the new homeowner. For more information, check out this guide: Five questions to ask your real estate agent before selling your home with solar panels.
There are a few things to consider when choosing a solar installer. First, confirm that they are certified, licensed, insured, have relevant experience, and can provide references. All EnergySage-approved installers are pre-screened to ensure that they meet these high-quality standards.
Then, research what the company has to offer—do they install high-quality equipment? How do their warranties compare to others? Do they perform their installations in-house or hire contractors? Finally, it’s a good idea to meet with your solar installer in person before signing an agreement to ensure you're comfortable working with them.
If you have multiple quotes from different solar installers, it can be hard to pick one. Not all solar installers use the same assumptions and metrics when providing homeowners with equipment and financing options. And the lowest quote isn’t always the best value.
We make it easy to compare quotes side-by-side so you understand the cost and benefits of each one. If you already have some quotes, upload them to EnergySage! You can compare them to quotes you receive in the Marketplace.
On a technical level, there are three main types of solar panels: monocrystalline (most efficient), polycrystalline (more budget-friendly), and thin-film (versatile, good for RVs or tiny homes). Within those three types, there are dozens of manufacturers. We rate the equipment that's quoted in our Marketplace (solar panels, inverters, and batteries) so you can easily compare it side-by-side. These are the top solar panel brands we recommend.
There are three types of inverters: string/central inverters, microinverters, and optimized inverters. Inverters convert your panels' electricity from direct current (DC) to alternating current (AC) electricity. In general, microinverters and optimized inverters are best for shady roofs but tend to cost more. If you have a pretty simple roof with minimal shading, you'll save a lot by choosing a string inverter. Here's our list of the best inverters.
After you compare quotes and find your desired solar installer on EnergySage, your installer will conduct a site visit to assess your property. Once you accept a quote on EnergySage, your installer will file the paperwork necessary to approve your system. The solar panel system installation usually only takes a few days to complete, but the entire installation process—from site assessment to commissioning—can take anywhere from two to six months due to scheduling constraints around permitting, installation, inspections, utility interconnection, and more.
If you want detailed information about how much energy your solar panel system produces, then yes, you should ask your installer about solar monitoring system options. In many cases, solar lease agreements will include free programs to track your system's performance. You may need to pay for one separately if you own your system.
No, as long as you're connected to the grid, your solar panel system doesn't necessarily need a battery. Your excess power will flow back to the grid, and you can draw from the grid if you need more electricity than your panels generate.
If you want backup power during outages, you will need a battery. And, if you don't have access to one-to-one net metering, batteries can significantly increase your savings with solar, making them very worthwhile.
When you subscribe to a community solar project, you receive a portion of the energy generated by a large solar panel system located in your area. Unlike a home solar panel system, a community solar project isn't installed on your roof. Community solar and rooftop solar both result in net savings on your electricity bill, but each offers distinct benefits. Compare rooftop vs. community solar to see which is right for you.
There are two models of community solar: ownership-based and subscription-based. Ownership allows you to make an up-front investment to save money in the future, while subscription-based programs offer savings over a set period. When comparing community solar offers, you’ll find different types of structures within these tiers—it all varies depending on where you live. Before selecting a project, consider its location and how soon it will begin delivering savings.
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If you move within the same service area, you may be able to keep your share of the community solar project. If you move outside the service area, you could sell your share (if you own it), transfer your subscription to another account, or potentially pay an early cancellation fee (if you have a subscription-based model). Community solar cancellation terms vary by project and provider, so be sure to ask before you sign up.
When you purchase bill credits from your community solar provider, you get them at a 5-20% discount, depending on your initial contract. If your community solar subscription includes a 10% discount on bill credits, you'll receive $1 towards your utility bill charges for every 90 cents you pay your community solar provider, which means you pocket 10 cents of savings.
While 10 cents doesn't seem like much, over the hundreds or thousands you spend on electric bills each year, 90 cents for every dollar leads to decent savings. If you currently spend $200 every month on electricity, you could save $20 every bill, or $240 every year with community solar.
By signing up for a community solar project, you'll receive virtual net metering credits on your electric bill. Each credit is equal to one kilowatt-hour (kWh) of electricity. Let’s say, for example, you use 1,000 kWh at home in one month, and your community solar share produces 800 kWh. The 800 kWh in credits from your share are applied to your electric bill, so your utility bills you only for the remaining 200 kWh. You pay your community solar provider directly for the cost of your share or subscription.
Solar panels are built to work in all climates, but in some cases, rooftops may not be suitable for solar systems due to age or tree cover. If there are trees near your home that create excessive shade on your roof, rooftop panels may not be the most ideal option. The size, shape, and slope of your roof are also important factors to consider. Typically, solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs may be suitable too. You should also consider the age of your roof and how long until it will need replacement.
If a solar professional determines that your roof is not suitable for solar, or you don’t own your home, you can still benefit from solar energy. Community solar allows multiple people to benefit from a single, shared solar array that can be installed on- or off-site. Costs associated with purchasing and installing a solar energy system are divided among all of the participants, who are able to buy into the shared system at a level that best fits their budget. Learn more about community solar.
Those interested in community solar can take advantage of a tool from SETO awardee EnergySage. The company's Community Solar Marketplace aggregates the many available options in one place and standardizes project information, allowing interested consumers to easily locate and compare multiple community solar projects in their area.
The National Renewable Energy Laboratory (NREL) developed a tool called PVWatts for this purpose. It estimates the energy production and cost of energy of grid-connected PV energy systems for any address in the world. It allows homeowners, small building owners, installers, and manufacturers to easily develop estimates of the performance of potential PV installations, and can even compare solar’s cost to utility bills. These tools are great for getting started, but make sure to work with a solar installer for a custom estimate of how much power your solar energy system is likely to generate.
For its analyses, NREL uses an average system size of 7.15 kilowatts direct-current with a 3-11 kilowatt range. According to SETO awardee EnergySage, that’s enough power to meet all the energy needs for an average home in Austin, Texas.
There are a number of mapping services that have been developed by SETO awardees that will help you determine if your roof is suitable for solar and can even provide you with quotes from pre-screened solar providers in your area. In addition to those resources, an internet search can help you find local companies that install solar panels. Because you will likely have many options to choose from, it’s important to thoroughly read reviews of solar companies to make sure you are selecting the best fit for you and your home.
Solar co-ops and Solarize campaigns can also help you start the process of going solar. These programs work by allowing groups of homeowners to work together to collectively negotiate rates, select an installer, and create additional community interest in solar through a limited-time offer to join the campaign. Ultimately, as the number of residents who participate in the program increase, the cost of the installations will decrease.
Most people going solar have a positive experience. But like other fast-growing industries, the rampant expansion of solar energy has opened the door to a small subset of bad actors.
Our Smart Shopping Tips for Solar outlines a few ways to identify red flags as you go solar:
On August 7, , the U.S. Department of the Treasury (Treasury), the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC) issued a consumer advisory to help you identify potential consumer solar scams and file complaints about suspicious behavior. Before you sign any documentation with a solar company, carefully review these educational materials:
Net metering is an arrangement between solar energy system owners and utilities in which the system owners are compensated for any solar power generation that is exported to the electricity grid. The name derives from the s, when the electric meter simply ran backwards when power was being exported, but it is rarely that simple today. Whether or not your solar system qualifies for net metering payments depends on policies and practices in your state and electric utility. Your local electric utility would be a good place to source information on net metering in your service area. When researching net metering policies and practices in your service area, there are some basic questions to consider, such as availability in your service area, eligible system size and customer type, rates, and design of bill credits.
Storage refers to energy storage, most often in the form of batteries. Installing energy storage with a solar system can help utilize the power generated when it’s needed most, regardless of whether it’s sunny outside at the time. Storage allows you to save that energy and use it later in the day, like when you turn the heat on at night or run the dishwasher after dinner or even when the power goes out. Ask your solar installer if they offer battery storage options and learn more about storing solar energy.
The amount of money you can save with solar depends upon how much electricity you consume, the size of your solar energy system, if you choose to buy or lease your system, and how much power it is able to generate given the direction your roof faces and how much sunlight hits it. Your savings also depend on the electricity rates set by your utility and how much the utility will compensate you for the excess solar energy you send back to the grid. Check the National Utility Rate Database to see current electricity rates in your area.
In some cities around the country, solar is already cost competitive with the electricity sold by your local utility. The cost of going solar has dropped every year since , a trend researchers expect to continue. Not only are the prices of panels dropping, so are the costs associated with installation, such as permitting and inspection—also known as “soft costs.” All of SETO's funding programs are working toward improving the affordability of solar and making it easier for consumers to choose solar.
It should also be noted that energy efficiency upgrades complement solar energy economically. By using Energy Star appliances and other products in your home, you’ll need less solar energy to power your home.
Consumers have different financial options to select from when deciding to go solar. In general, a purchased solar system can be installed at a lower total cost than system installed using a solar loan, lease, or power purchase agreement (PPA).
If you prefer to buy your solar energy system, solar loans can lower the up-front costs of the system. In most cases, monthly loan payments are smaller than a typical energy bill, which will help you save money from the start. Solar loans function the same way as home improvement loans, and some jurisdictions will offer subsidized solar energy loans with below-market interest rates, making solar even more affordable. New homeowners can add solar as part of their mortgage with loans available through the Federal Housing Administration and Fannie Mae, which allow borrowers to include financing for home improvements in the home’s purchase price. Buying a solar energy system makes you eligible for the Solar Investment Tax Credit, or ITC. In December , Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in -, and 22% for systems installed in . The tax credit expires starting in unless Congress renews it. Learn more about the ITC.
Solar leases and PPAs allow consumers to host solar energy systems that are owned by solar companies and purchase back the electricity generated. Consumers enter into agreements that allow them to have lower electricity bills without monthly loan payments. In many cases, that means putting no money down to go solar. Solar leases entail fixed monthly payments that are calculated using the estimated amount of electricity the system will produce. With a solar PPA, consumers agree to purchase the power generated by the system at a set price per kilowatt-hour of electricity produced. With both of these options, though, you are not entitled to tax benefits since you don’t own the solar energy system.
Navigating the landscape of solar financing can be difficult. The Clean Energy States Alliance released a guide to help homeowners understand their options, explaining the advantages and disadvantages of each. Download the guide.
DSIRE is the most comprehensive source of information on incentives and policies that support renewable energy in the United States. It is operated by the N.C. Clean Energy Technology Center at N.C. State University and was funded by the U.S. Department of Energy. By entering your zip code, DSIRE provides you with a comprehensive list of financial incentives and regulatory policies that apply to your home. Additionally, an experienced local installer should be able to assist you in claiming any state and local incentives, as well as the ITC.
If you want to learn more about state and federal solar policies regarding incentives and tax breaks, the Solar Power in Your Community guidebook (PDF) has a section—Appendix A on page 87—that explains it in detail.
Buying a solar energy system will likely increase your home’s value. A recent study found that solar panels are viewed as upgrades, just like a renovated kitchen or a finished basement, and home buyers across the country have been willing to pay a premium of about $15,000 for a home with an average-sized solar array. Additionally, there is evidence homes with solar panels sell faster than those without. In , California homes with energy efficient features and PV were found to sell faster than homes that consume more energy. Keep in mind, these studies focused on homeowner-owned solar arrays.
When it comes to third-party owned (TPO) systems, data shows that while they add some complexity to the real estate transaction, the overall impacts in terms of sales price, time on market, agreement transfers, and customer satisfaction are mostly neutral. In some cases, TPO systems can even add value.
The PV Value® tool is helpful for both home sellers and homebuyers. It calculates the energy production value for a PV system and is compliant with Uniform Standards of Professional Appraisal Practice and has been endorsed by the Appraisal Institute for the income approach method. Make sure your appraiser uses this tool to get the most accurate estimate of your PV system’s value.
There are two primary technologies that can harness the sun’s power and turn it into electricity. The first is the one you’re likely most familiar with – photovoltaics, or PV. These are the panels you’ve seen on rooftops or in fields. When the sun shines onto a solar panel, photons from the sunlight are absorbed by the cells in the panel, which creates an electric field across the layers and causes electricity to flow. Learn more about how PV works.
The second technology is concentrating solar power, or CSP. It is used primarily in very large power plants and is not appropriate for residential use. This technology uses mirrors to reflect and concentrate sunlight onto receivers that collect solar energy and convert it to heat, which can then be used to produce electricity. Learn more about how CSP works.
Absolutely! All solar panels meet international inspection and testing standards, and a qualified installer will install them to meet local building, fire, and electrical codes. Also, your solar energy system will undergo a thorough inspection from a certified electrician as part of the installation process.
A working PV panel has a strong encapsulant that prevents chemicals from leaching, similar to how defroster elements are sealed in a car windshield. Occasionally, a solar panel may break due to weather or other events. According to the International Energy Agency Photovoltaic Power Systems Technology Collaboration Program, any lead and cadmium exposure from broken solar panels in residential, commercial, and utility-scale systems would be below the acceptable limit set by the U.S. Environmental Protection Agency for soil, air, and groundwater.
Residential Consumer Guide to Solar Power – In an effort to make going solar as effortless and streamlined as possible, the Solar Energy Industries Association developed this guide to inform potential solar customers about the financing options available, contracting terms to be aware of, and other useful tips.
A Homeowner’s Guide to Solar Financing: Leases, Loans and PPAs – This guide from the Clean Energy States Alliance helps homeowners navigate the complex landscape of residential solar system financing. It describes three popular residential solar financing choices and explains the advantages and disadvantages of each, as well as how they compare to a direct cash purchase.
Solar PV Project Financing: Regulatory and Legislative Challenges for Third-Party PPA System Owners– Third-party owned solar arrays allow a developer to build and own a PV system on a customer’s property and sell the power back to the customer. While this can eliminate many of the up-front costs of going solar, third-party electricity sales face regulatory and legislative challenges in some states and jurisdictions. This report details the challenges and explains alternatives.
A Beautiful Day in the Neighborhood: Encouraging Solar Development through Community Association Policies and Processes – This guide, written for association boards of directors and architectural review committees, discusses the advantages of solar energy and examines the elements of state solar rights provisions designed to protect homeowner access to these benefits. It then presents a number of recommendations associations can use to help bring solar to their communities.
Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes – This report from Lawrence Berkeley National Laboratory finds that home buyers are consistently willing to pay premiums of approximately $15,000 for homes that have solar across various states, housing and PV markets, and home types.
Residential Solar-Adopter Income and Demographic Trends – This report from Lawrence Berkeley National Laboratory finds that while solar adoption skews toward high-income households, low- and moderate-income households are also adopting, and that the rooftop solar market is becoming more equitable over time.
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