The future of solar certainly seems bright in the US. But a lack of price transparency does seem to be throwing some shade on the industry.
Millions of Americans have installed solar panels at their homes in recent years with increasing frequency — residential installation projects totaled 210,000 during the final quarter of 2023, an increase of 12% year-over-year, according to data from the Solar Energy Industries Association. Overall, around 4% of all single-family homes in the US are generating electricity from solar panels.
The reason for solar’s growth in the residential sector is obvious: It can save homeowners money on their utility bills. But determining how much you might be able to save is difficult. That, in large part, is why it can be a chore to get straight answers when shopping around for a solar system or installation. The solar industry, in that respect, lacks a lot of transparency.
Can solar panels save you money?
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But suppose you’re interested in exploring whether a solar panel system can save you money. In that case, you really need to keep a basic formula in mind: Do the ultimate savings on your utility bills outweigh the costs of the initial solar installation, or the lease payments you’re making to a solar company?
What determines the price of solar?
If a door-to-door solar salesperson has ever come to your door, or even if you’ve tried searching the internet to get an idea of how much solar panels will cost, you’ve likely been left frustrated and without answers. That’s because determining the price of solar is not an exact science, and there are numerous factors in the mix.
Some of those factors include the cost of the panels themselves, the cost of batteries, inverters and charge controllers, labor and more — all of which can vary in price from place to place. And another thing that solar-curious homeowners will need to think about is whether you’re buying the panels outright or using someone else’s.
“There are two paths people take: Third-party-owned, or household-owned panels,” said Akshaya Jha, an associate professor of economics and public policy at Carnegie Mellon University and a Scott Institute Energy Fellow.
