The sun’s energy is free, but harnessing it isn’t.
Figuring out how to finance solar panels can be tricky, with more options for putting solar panels on your roof than there are loan options for buying a home.
Solar panels and the equipment that goes with them to convert the sun’s energy into electricity is expensive. Based on the average house paying $75 per month for electricity, a solar system that generates that much power costs around $25,000 to $35,000, according to the Solar Power Authority.
Utility company incentives, tax breaks and other subsidies can cut the cost in half, but even then it can take years for the solar panels to pay for themselves in energy savings.
A system that costs $18,000 — which includes installation, labor and the solar power system — has a payback period of about 20 years, the Solar Power Authority estimates.
Cost considerations for solar panels
How many solar panels your home will need and if solar power is worth installing depends on a number of factors. These include the size of the roof, amount of sunlight your home gets, energy needs and how much electricity you’ll still need to buy from your utility company.
Since the sun doesn’t shine on your home 24 hours a day, it won’t generate power all the time. Unless you live in a sunny state such as Arizona or don’t use much electricity and your solar panels produce more electricity than you’ll use, you’ll need to buy electricity from the power company when it’s dark or your solar system isn’t providing enough electricity.
The good news is there are many ways to finance solar panels and eventually power your home for free with power from the sun. Continue reading