Every day Earth is showered with free energy that anyone can tap into, so long as they’ve got the right technology. Fortunately, that tech is abundant and getting easier to access as mass-produced solar panels become cheaper.
Amid the climate crisis and rising energy costs, a solar energy system is one way you can help reduce your carbon footprint. While installing panels still takes a decent chunk of change, there are plenty of incentives that lower the upfront costs. But it’s still far from a simple process.
Going solar is a major decision that requires research and due diligence. To get you started, we’ve compiled a breakdown of key pros and cons.
Are solar panels worth it?
That depends on your circumstances.
“It depends on what is motivating the household to make the decision to [install] solar,” Becca Jones-Albertus, director of the US Department of Energy Solar Energy Technologies Office, told CNET.
If you’re looking to be 100% energy independent or live off the grid, solar could be a good way to reach those goals. If your state has robust net metering or you have high energy costs, your solar panels could start saving you money in (relatively) short order. If you aren’t planning on moving for many years or have reason to believe the short-term energy savings and the boost to your home’s value will recoup your investment, solar could pay off.
If you don’t have high energy costs or your state makes it harder to go solar, it might not be worth it financially. Even after weighing all the pros and cons, the decision to go solar is a highly personal one. Examine how your situation fits with solar panels before moving ahead and compare quotes from multiple solar companies and installers before making a decision.
Solar panel pros
Solar panels use photovoltaic cells to harness radiation from the sun and convert it into electricity. They’re an emissions-free energy source that reduces your carbon footprint. But the environmental benefit is just one of many.
Cheaper electric bill
By going solar, residential energy consumers can see significant savings in their home energy bills. Electricity prices were up 5.4% for the 12-month period ending in June, according to the Consumer Price Index. Depending on its size and your energy needs, a solar panel system can reduce or eliminate your electric bill.
Residential solar panels allow you to pull less energy from the grid. With the addition of solar batteries, solar panels could make your home self-reliant and independent from the electric grid. Solar batteries store energy created during sunny hours, allowing it to be used at night or on cloudy days. Choosing between an off-grid or grid-tied system will depend on your personal energy goals.
A solar system with a battery can help you power your home during an outage or blackout. Overall, solar panels add stability and flexibility to the electricity you get from the grid.
Cleaner energy source
By installing solar panels on your home, you’re increasing the amount of clean, carbon-free energy generation available. (Manufacturing solar panels typically produces some greenhouse gas emissions, but far fewer over their lifetime than fossil fuel alternatives, like coal.) The electric power sector contributes up to 25% of all greenhouse gas emissions nationwide, according to the EPA. Using renewable energy helps reduce the use of fossil fuels and their harmful emissions.
Improved home value
Installing solar panels typically increases the overall value of your home. Solar panels can add around $15,000 of value to your home and help your house sell quicker than houses without solar, according to the US Department of Energy’s Lawrence Berkeley National Laboratory.
Decreasing solar panel cost
Solar panel cost and efficiency has improved greatly over the last 10 years. As solar panel technology improves, so does its return on investment and the savings you’ll see over time. Federal solar incentives coupled with state-level incentives (if available) can help make a solar panel system more affordable and accessible.
30% federal tax credit available to all
In 2022, when Congress passed the Inflation Reduction Act, it boosted the solar investment tax credit to 30% and extended it through 2032. (It phases out by 2035.) This federal residential clean energy credit covers 30% of the total installed cost of a solar panel system.
Net metering and a faster payback period
Another alluring feature is how you can speed up your payback period – the time it takes to earn back your initial investment – through net metering. Net metering allows you to sell your excess energy back to your utility company. Not every state has net metering, so it’s important to check with your utility provider.
Solar panel cons
When it comes to any major purchase there are always downsides – the biggest one being cost.
Solar panels are expensive
The cost of a residential solar system will vary by size, installer and location, but the national median is $3.80 per watt, according to the Lawrence Berkeley National Laboratory. For the median size of 7 kilowatts, that’s a total installed price of $26,600.
Over the past decade, the cost of solar panels has decreased significantly and the federal tax credit offsets an additional 30%. Some states offer additional incentives and rebates, but a solar purchase is still unaffordable and unattainable for many. Many solar companies or installers offer financing, but that usually means paying interest and additional fees.
The payback period can be long
Understanding how long it takes for solar panels to pay for themselves is a major factor in the purchase decision. The average payback period in the US is six to 12 years, but depending on your energy costs, electricity usage and available incentives, that period could be longer, Jamie Haenggi, president of ADT Solar, told CNET.
You should calculate your solar payback period before buying, especially if you’re going solar for the long-term savings. If it takes you seven years to recoup your investment, and you move or sell your home before that, then you might be taking a loss.
Not everyone has the right conditions
Available sunlight, space constraints and installation hurdles can make a solar system more expensive. Trimming trees and repairing your roof, if necessary, will add expense to the project. The angle, pitch and direction of your roof will affect the productivity and efficiency of your solar panels. If you have a well-shaded roof or one that only points north, your house may not be a good fit.
Potential to raise property taxes
Property taxes are based on assessed values of property. Adding a solar panel system to your home will increase the appraised value. Typically, the higher the home’s value, the more you will pay in property taxes. Some states have policies exempting homes with solar panels from paying the additional property tax.
Changes to your homeowners insurance policy
Some homeowners policies cover solar panels, some do not. It’s best to check with your insurance provider or shop for a new one that will cover a new solar installation. Insurance policy premiums could increase to account for solar panel coverage.
Accessibility and affordability depend on where you live
While everyone can benefit from the 30% federal tax credit, not all states offer or enforce additional incentives. Parts of Kansas, for example, aren’t covered by the state’s net metering law.
“It’s possible you won’t be able to net meter a system currently,” or may be charged an additional interconnection fee, Dorothy Barnett, executive director of the Climate + Energy Project, told CNET, referring to Kansas.
In contrast, states like Rhode Island, Maryland and California have more generous incentives that include net metering, property tax exemptions and grants, such as the Maryland Energy Administration’s Low Income Solar Grant Program.
Geographic location also has an impact on your solar panel’s efficiency. For example, Alaska residents see fewer sunny days per year compared to Florida, where sunny days are above the national average.
Solar storage is an additional expense
If you want to store energy from your solar panel system so you can power your home at night, solar batteries are a must. But they’re not cheap. In fact, the addition of solar batteries could double the total cost of a solar system.
Solar panels have an environmental impact
The manufacturing of the components that make up a solar panel system has an impact on the environment making the “energy payback” timeline a factor to consider. However, when it comes to greenhouse gases, solar panels pay for themselves within one to four years of use, according to a report by the Office of Energy Efficiency and Renewable Energy.
Solar panels are not easily transferable
Solar panels typically stay with the house if you sell it. If you plan to move or sell your home before your payback period is up, you may never actually see a return on your investment, though solar panels have been shown to increase home values.
When is going solar worth it?
Just like investments accruing interest over the years, solar panels on your property extract value over time. Because they create something valuable – electricity – each time the sun rises in the sky, which it does pretty reliably, it’s relatively easy to estimate their worth.
While it depends on local energy prices, available sunlight and your own energy use, a general rule of thumb is that most solar energy systems will pay for themselves after around a decade of use, typically giving you another decade or two to enjoy the benefit of free energy, though you should calculate your own potential payback period for yourself.
Still, many may balk at the cost of solar installation and wonder about the ideal timing for going solar.
“Now is the best time,” said John Burke, director of the Maine Solar Energy Association.
Do solar panels increase your home’s value?
Gilbert Michaud, a professor at Loyola University Chicago, pointed out that many in younger generations are unlikely to stay in a residence long enough to see the long-term savings and value from a solar energy system. He also said that many people overlook the fact that the cost of a solar system can also be recouped when a home sells.
“There’s been a lot of academic studies that have shown how it increases your property values,” Michaud said. “You can actually sell your house for ten-, twenty-, thirty-thousand dollars more.”
What is the cost of solar panels?
Generally speaking, the cost of solar panel installations varies by state but has been steadily coming down over the last several decades.
Burke said he’s watched the price of mass-produced solar panels drop precipitously over his career.
“It used to be 70 cents a watt years ago and now it’s as low as 30 cents a watt,” he said.
Installation cost is dependent on a number of factors besides the basic cost of solar modules. The rising price of things like labor, administrative costs, wiring and other components actually drove the average price of solar installations up between 2022 and 2023, although there’s some indication prices are already coming down again.
Still, there can be a lot of variation in pricing from market to market, with different states offering different incentives and labor and permitting costs.
How much can you save with solar panels?
The basic formula to determine overall solar savings over time requires first figuring out your total upfront costs for installation, less all tax credits, rebates, grants and other incentives received. Then add in any financing costs like loan fees and interest.
Next calculate how much your solar system reduces your energy bills. If your panels zero out your utility bill and you were previously paying a hundred dollars a month for electricity, you’re banking $1,200 in annual savings. (It’s common for solar to offset less than 100% of your electricity bill.)
Divide your net system cost by your annual utility bill savings to get your total payback period in years. After that point, your annual bill savings is just extra money in your bank account.
What about tax credits for solar panels?
Another reason now is a good time to go solar, as Burke said, is that the federal government is still offering a 30 percent tax credit on renewable energy systems. This is in addition to a number of other incentives from state and local governments, and even from utilities and credit unions.
A good place to track and check the incentives that might be available to you is the Database of State Incentives for Renewables & Efficiency maintained by the North Carolina Clean Energy Technology Center. You should confirm for yourself that the incentives listed there are still in effect.
Frequently asked questions
Sean Jackson contributed to this article.