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Are Solar Panels Worth It?

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Author Image Written by Tamara Jude + 1 other Reviewed by Sarah Wilder Updated 03/25/2024

Solar energy has many benefits, including lower electricity bills and reduced carbon emissions. However, installing a solar panel system is expensive, causing many homeowners to wonder if the investment is worth it.

Our team has spent more than 770 hours researching the solar industry, interviewing experts, and surveying homeowners about their solar experiences to help you determine if going solar is right for you. This guide covers the basics of how solar panels work, their benefits, and which homes are the best candidates for solar power.

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4 Best Solar Companies of 2024

Best Solar Leasing : SunRun
Best Customer Support : Palmetto Solar
Best East Coast Installer : Solar Energy World
Most Reputable : Blue Raven Solar

How Do Solar Panels Work?

Solar panels, also known as photovoltaic (PV) panels, absorb energy from sunlight and convert it into electricity to power your home. The power generated by solar panels starts as direct current (DC) electricity, passes through a solar inverter, and becomes alternate current (AC) power. Finally, the converted energy flows through your home’s wall outlets and charges any connected batteries.

If you have an off-grid solar system, your home will rely entirely on the electricity generated by your solar panels. A solar battery will store extra energy to use later, when your panels are not actively producing power. However, most systems are connected to the grid. If your grid-tied solar system doesn’t fully cover your electricity needs, you can get the remaining power from the grid. Excess energy can be sent back to the grid or stored for later use.

  • The number and type of solar panels you need depends on your home’s design and the available sunlight. Some companies offer a wide selection of panels, while others may stick to one particular brand or type. Most solar panel systems are placed on your home’s roof, but ground-mounted solar panels are also available. These panels can be set up at the ideal angle to maximize efficiency.
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What Are the Benefits of a Solar Panel System?

Using solar energy provides several advantages to homeowners, including financial savings and environmental benefits. We’ll go over these in detail below.

Inexhaustible Sustainable Energy

Solar power provides a renewable energy source, preventing homeowners from having to rely on fossil fuels. As a result, solar users will reduce their carbon footprint and cut back on harmful emissions that contribute to climate change.

Lower Utility Bills

According to the U.S. Energy Information Administration (EIA), homeowners spent an average of $137 per month on their electric bill in 2022. Electricity prices vary significantly from state to state, but you’ll generally see higher averages in New England and the South.

Using solar panels allows you to tap into a less expensive resource than the traditional power grid, helping you to generate your own energy and save on electric bills. Homes that use electric-powered appliances, such as electric stoves or water heaters, are able to use more of their solar-generated electricity and save on gas bills.

Solar panels often generate more energy than is needed to power your home. Some states offer net metering, allowing customers to sell their excess energy to the grid and accumulate credits over time. Alternatively, solar customers can add a solar battery to store extra energy for use later. Homeowners can use stored energy during low-sunlight days or power outages. The best reviewed solar batteries are able to power your home longer than most alternatives.

Increased Home Value

Homeowners often look for ways to raise their home value through upgrades and renovations. Installing a solar system can increase your home value, too. In 2019, Zillow found that homes with solar panels sold for about 4% more, on average, than comparable homes with solar power. Some states even offer tax exemptions to ensure that you benefit from the home value boost without having to pay higher property taxes.

Solar Tax Breaks and Incentives

Homeowners may receive additional monetary benefits from their local utility company, state government, and federal government. Many utility companies provide rebates for customers who move to solar energy. Likewise, state and local governments make the switch desirable by offering rebates to solar customers. Tax credits and other incentives vary by state.

The federal government offers the Investment Tax Credit (ITC) for homeowners who install new solar panel systems. This federal solar tax credit provides a federal tax reduction equal to 30% of your solar installation costs for systems installed until 2032. The credit rate will reduce to 26% in 2033 and drop to 22% in 2034. It’s set to expire in 2035 unless renewed.

  • Roughly 96% of our surveyed solar customers said they felt making the switch to solar power was worth it, and 82% said their installation increased their property value. Of that, 71% said their property value increased between 6% and 15%. When asked how much their monthly energy bill decreased, the top response was $100.
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Which Homes Benefit the Most from Solar Panels?

Not all homeowners will benefit equally from solar panels. However, if any of the following statements are true, your home may be an ideal candidate for solar panels.

  • Your home gets plenty of sun exposure: Every state gets enough sunlight to power an average-sized home. However, specific factors such as shading and roof positioning could reduce your ability to take full advantage of solar panels. The ideal rooftop is free of obstructions, such as trees or tall buildings. The roof should also be south-facing and have a slope that can hold a solar panel at a 15- to 40-degree angle and have a good sun number score.
  • You have high utility bills: If your utility bill costs are constantly high, the highest-performing home solar systems might help. Keep in mind that you may need to install more solar panels than average to offset these costs, leading to a more expensive system. If your monthly electric bill typically stays low, a solar system may not be an ideal investment. A solar panel installer will review your current electricity bill to help you determine if solar is right for you.
  • Your state offers solar tax incentives: Many states offer solar incentives to encourage their residents to switch to solar panels. These incentives help reduce the system’s overall cost, making installation much more affordable. Local utility companies may offer additional incentives and credits, too. Roughly 75% of our 1,000 surveyed solar users said they took advantage of solar incentives to increase their return on investment.
  • Your electric company offers a net metering program: Excess energy from your solar panel installation can be stored in a solar battery or returned to the power grid. Several states offer net metering, which compensates solar customers for the excess power that their system produces. Approximately 32% of our survey respondents said they participated in a net metering program.

If you’re not able to install solar panels on your roof, we recommend looking into community solar projects. These projects allow you to pay for a portion of a shared system of solar panels, often located within your community. It’s also worth noting that solar panels will still work in less-than-ideal conditions, though you may receive less savings. You can also look into ground-mounted solar as an alternative to rooftop solar.

Still not sure if solar panels are a good idea? The video below covers five important things to consider before installing solar, including the conditions that make a roof perfect for solar panels.


How Much Do Solar Panels Cost?

Solar panel installation costs vary by provider and location. We surveyed 1,000 homeowners in 2022 and found that the average solar panel system costs between $15,000 and $20,000. However, systems can be as much as $25,000 according to data from the Solar Energy Industries Association (SEIA).

Several factors affect the price you pay, including your home’s size and the number of panels needed to run it efficiently. Additionally, solar incentives, rebates, and tax credits can significantly reduce your installation costs.

Homeowners have several options for paying for a solar panel system. Most providers offer the following methods of paying for solar:

Customers can pay for their new system immediately and receive full ownership. This is the most cost-effective payment option, as it qualifies you for solar incentives and prevents you from paying additional fees for interest rates.

According to our 2024 survey of solar customers, 49% chose to pay in full upfront.

Homeowners can choose to take out a loan and pay for their system in monthly installments over time. Typical loans range from five to 10 years and may be through a top solar company or a third party. You’ll pay more for your system in total due to interest rates, but you’ll still qualify for incentives and own your system.

Of our 1,000 surveyed solar users, 23% financed their system through a loan.

Homeowners can rent their panels from a solar company for a fixed monthly rate. Solar leases may last from 10 to 25 years, depending on the company’s terms. At the end of the lease term, you can pay for the panels or return them to your installer. We generally don’t recommend a solar lease because you won’t qualify for incentives or own your system, but solar leases can be worth it in certain situations.

Roughly 11% of our survey takers leased their solar panels monthly.

A Power Purchase Agreement (PPA) works similarly to a monthly utility bill in that a customer pays for each kilowatt-hour (kWh) of solar power used. Unlike fixed solar loans or lease payments, these bills fluctuate each month depending on the amount of electricity your system generates. The solar company retains full ownership of the equipment, and you’re disqualified from incentives. We also don’t recommend this option except in specific circumstances.

Despite the downsides, 17% of our survey respondents chose a PPA.

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How Does Solar Installation Work?

Installing solar panels typically involves several key steps. First, a professional will evaluate your roof’s suitability, sun exposure, and potential for shading. They’ll also discuss your energy usage and budget. Based on the assessment, the solar company will design your system, including the number of panels, placement, and inverter size.

Once any necessary permits and approvals are obtained from the local authorities, installation can begin. Qualified technicians mount the racking system on your roof, secure the solar panels, and connect them to the electrical system in your home. Final inspections are conducted by local authorities and the utility company before your system is activated.

Here’s a video we created to help explain the solar installation process:


How To Choose a Solar Panel Installer

Choosing the right solar panel installer can make or break the process. “If you work with a turn-key installer who communicates at each step of the process, the home solar installation should be easy and worry-free,” says Matt Johnson, co-owner of Namaste Solar. “A seasoned installer should handle all the logistics from design to permitting to finding all the incentives and rebates available.”

Johnson recommends looking for a company that has a long track record in the industry, provides a workmanship warranty, and offers ongoing service after installation. Look for the following qualities when browsing for a premier solar company in your area:

  • Years of experience
  • Types of solar panels used for installations
  • Available add-ons, such as solar batteries
  • Warranty coverage for the solar panel equipment and its performance
  • Reviews from current and former customers
  • Better Business Bureau (BBB) ratings
  • Financing options and terms
  • Customer service availability
  • Online pricing or available quotes
  • Estimated payback period for your system
  • A detailed review of your average energy usage and potential solar savings

Our Top Solar Company Picks

Sunrun

4.5

We like Sunrun for its four financing options, including its unique leasing options if you don’t want to own your system. This stands out to us because the other companies on this list don’t offer as many options.

Prepaid and leased systems also include a 25-year warranty with system service and maintenance, ongoing monitoring, and theft insurance. The company even offers financing plans for quality monocrystalline solar panels and products from trusted brands such as LG.

How We Scored Sunrun

Sunrun earned 4.4 out of 5 stars based on our methodology. The company gained many points for its positive reputation, comprehensive leasing options, and well-rounded warranty coverage. It lost some points for is limited service selection.

  • Solar Equipment and Services (15 out of 25 points): Sunrun provides solar panel and battery installation but uses third-party installers. Though this is becoming an industry standard, in-house installers typically yield better communication and quality. The company also doesn’t provide roofing services or energy audits but does offer quality active monitoring assistance. 
  • Warranty and Performance Guarantees (19 out of 25 points): Sunrun offers quality warranties, such as its 25-year manufacturer and labor warranty, but doesn’t include a performance guarantee. 
  • Brand Reputation and Professional Certifications (13 out of 15 points): Sunrun has one of the higher customer BBB ratings we’ve encountered, and the company maintains an overall positive customer reputation online.
  • Financing Options (13.5 out of 15 points): The company doesn’t offer any in-house financing but provides more warranty coverage for customers interested in solar leasing than other providers, such as Palmetto.
  • Industry Experience (9 out of 10 points): Sunrun holds 17 years of experience in the solar industry, making it a veteran compared to a newer company such as Blue Raven Solar.
  • State Availability (8 out of 10 points): The company only serves 18 states.

Pros and Cons

Pros Provides system monitoring that signals issues with your system Offers diverse financing options to suit various budgets Provides EV and solar battery solutions Cons Limited online information on solar incentive disqualification with leases Requires added costs for the same coverage plans as leased and prepaid customers Varies solar battery availability by state

Warranty and Financing

Warranty

Sunrun backs its systems with a 10-year comprehensive warranty which includes product, roof penetration, and workmanship coverage.

Financing Options

✔ Full purchase
✔ Loan
✔ Lease
PPA

State Availability

Available in: California, Colorado, Connecticut, Florida, Hawaii, Illinois, Massachusetts, Maryland, Nevada, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, plus Washington, D.C. and Puerto Rico.

Reputation and Reviews

The company earned DroneDeploy’s 2022 Guardian of Safety Award for incorporating drone technology in its site assessments. In 2021 and 2022, Sunrun was recognized by Comparably with 14 awards. Its accolades include Best CEOs for Diversity 2022, Best Company Culture 2021, and Best Company for Women two years in a row.

Sunrun currently holds an A+ rating from the BBB and is accredited. Former customers praised the comprehensive coverage for leased systems but complained about delayed installations, poor customer service, and poor communication with project managers. Additionally, some customers note being confused by Sunrun’s leasing and PPA options, though they also mention Sunrun is willing to discuss and clarify these plans.

Palmetto

4.4

Palmetto Solar offers a wide range of quality solar products and excellent customer service, including phone, email, and online chat options, an online service request portal, and a library of troubleshooting resources. Overall, Palmetto offers more customer support than other providers we reviewed, most notably through its tiered system protection plans and mobile app.

How We Scored Palmetto Solar

Palmetto earned 4.4 out of 5 stars according to our methodology. The company scored more points for its comprehensive service selection and long-term protection plans. It lost some because of its standard warranty options and lack of production guarantee. 

  • Solar Equipment and Services (20 out of 25 points): Palmetto offers an excellent selection of solar services, including solar battery and electric vehicle (EV) charger installation, energy audits, and active monitoring.
  • Warranty and Performance Guarantees (16 out of 25 points): The company’s warranty options don’t stand out as much as Sunrun’s. It offers industry-standard coverage for 25 years on products and 10 years on labor.
  • Brand Reputation and Professional Certifications (14 out of 15 points): Palmetto has a highly positive online reputation on popular review sites such as the BBB. The company also screens its installers to ensure they’re certified with the North American Board of Certified Energy Practitioners (NABCEP).
  • Financing Options (13.5 out of 15 points): Palmetto doesn’t provide in-house financing but offers all possible payment methods.
  • Industry Experience (8 out of 10 points): Palmetto holds a decent amount of experience, with 15 years in the industry.
  • State Availability (8 out of 10 points): The company serves 17 states.

Pros and Cons

Pros Gives access to customer support via email, chat, phone, and app Offers a tiered system protection plan Provides an online solar savings calculator to estimate potential savings Cons Limits its active monitoring services to three years Shorter roof leak and workmanship coverage than other installers Some online reviews mentioned permitting and installation delays

Warranty and Financing

Warranty

Palmetto’s warranty protection includes a 25-year panel warranty, 12-year inverter warranty, 10-year workmanship warranty, and five-year roof penetration warranty.

Financing Options

✔ Full purchase
✔ Lease
✔ Loan
✔ PPA

State Availability

Available in: Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Nevada, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia

Reputation and Reviews

Palmetto Solar received Solar Power World’s Most Forward-Thinking Contractor award in 2022. Inc. magazine recognized the company the same year with a Power Partner Award. Palmetto also aims to provide solar energy to underserved communities with its Get Solar, Give Solar program.

Palmetto Solar is accredited by the BBB and has an A+ rating from the site. While reading online reviews, we noticed that homeowners praised Palmetto for its dedicated installation managers and quality systems but mentioned very long waiting periods for permitting, plus installation delays.

Solar Energy World

4.4

Solar Energy World (SEW) is one of the most robust and well-regarded solar installation companies. It boasts several impressive features, such as its 30-year manufacturer’s warranty. Its service area is limited, and it doesn’t offer energy auditing services. We like that SEW discloses what solar panels it primarily works with and that the panels are from trusted, quality brands such as Qcells and Silfab.

Roughly 11% of our surveyed solar users purchased their system from Solar Energy World.

How We Scored Solar Energy World

SEW scored 4.4 out of 5 stars according to our methodology. The company received many points because of its warranty, which is longer than most other solar companies’ warranties. SEW offers a 30-year manufacturer’s warranty on all its solar panels and inverters, whereas many providers only offer 25-year warranties.

  • Solar Equipment and Services (18 out of 25 points): The company is an ideal option for many basic solar products and services, such as solar panels and battery installation. It lost points because it doesn’t install EV chargers or perform energy audits.
  • Warranty and Performance Guarantees (19 out of 25 points): SEW’s manufacturer and labor warranties are standout features, but the company doesn’t include any production guarantees with its work. 
  • Brand Reputation and Professional Certifications (15 out of 15 points): The company’s reputation is one of the best, with high BBB and Google Reviews ratings. We also found no active alerts or lawsuits.
  • Financing Options (13.5 out of 15 points): SEW offers all possible solar payment options but doesn’t provide an in-house financing department. 
  • Industry Experience (8 out of 10 points): The company has been in business since 2009, so it received most of the points in this category.
  • State Availability (6 out of 10 points): SEW limits its service area to eight East Coast states.

Pros and Cons

Pros Features an extensive solar product catalog with trusted brands Includes free active monitoring Hires NABCEP-certified installers and designers Cons Reviews mention communication issues with staff Warranty coverage varies by solar panel brand Doesn’t offer a power production guarantee

Warranty and Financing

Warranty

SEW offers a 30-year manufacturer’s warranty on all purchased solar panels and inverters. However, coverage varies by brand, and the company doesn’t guarantee them with every panel option. 

Financing Options

✔ Full purchase
✔ Loan
✔ Lease
✔ PPA

State Availability

Available in: Washington, D.C, Delaware, Florida, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, and Virginia

Reputation and Reviews

The company landed on Solar Power World’s 2023 Top Solar Contractors List in the No. 10 spot.

The BBB accredits SEW, and the company holds an A+ rating. Former customers praise the company for its professionalism, assistance with applying for financial incentives, and smooth installation process. However, some reported discrepancies in finances and scheduling.

Blue Raven Solar

4.4

Blue Raven Solar has one of the best reputations for reliability and trustworthiness. It has won awards for its team and CEO, and customer reviews report great customer service and prompt installations. The company also stands out for its in-house financing, which includes 18 months of free solar energy.

Out of all solar brands in the market, 6.5% of our survey respondents chose Blue Raven.

How We Scored Blue Raven Solar

Blue Raven received 4.4 out of 5 stars according to our rating system. The company scored the most points for its customer service reputation and warranty coverage. It also earned points for providing all standard solar panel services but lost some due to its limited financing options and lack of roof leak coverage.

  • Solar Equipment and Services (18 out of 25 points): Blue Raven offers solar panel and battery installation, active monitoring services, and energy audits. However, it doesn’t offer solar roofs, EV chargers, or additional roofing services. 
  • Warranty and Performance Guarantees (22 out of 25 points): The company offers top-of-the-line warranties, including a 25-year workmanship warranty. The company earned points fo providing a performance guarantee, but its guarantee is shorter than many other providers. However, it doesn’t provide any roof leak coverage. 
  • Brand Reputation and Professional Certifications (13 out of 15 points): Blue Raven has high customer review ratings on its BBB profile and other popular review sites. The company uses in-house installers but doesn’t ensure they’re NABCEP-certified, which made it lose some points in this category.
  • Financing Options (12 out of 15 points): Blue Raven offers some of the best in-house financing of the companies this list, but it limits this financing to solar loans. You may want to consider a different provider, such as Sunrun, if you’re looking for a lease or PPA.
  • Industry Experience (7 out of 10 points): Blue Raven has less experience than other providers, with only 10 years in the industry.
  • State Availability (7 out of 10 points): The company limits its service area to 19 states.

Pros and Cons

Pros Offers SunPower’s high-efficiency panels and storage options Provides a unique in-house financing option which includes 18 months of free solar energy Recognized as one of the industry’s most reputable solar companies Cons Offers one of the shortest production guarantees among our reviewed companies Some customer reviews mention poor communication Workmanship warranty falls slightly below the industry standard

Warranty and Financing

Warranty

A Blue Raven system has a 25-year product warranty, a 10-year workmanship warranty, and a two-year production guarantee.

Financing Options

✔ Full purchase
✔ Loan

State Availability

Available in: Colorado, Florida, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nevada, North Carolina, Ohio, Oregon, South Carolina, Texas, Utah, Virginia, Washington

Reputation and Reviews

Blue Raven has won numerous awards from Comparably, a site known for its company culture and reputation reviews. It also ranked No. 20 on Glassdoor’s Best Place to Work in the USA in 2021.

Blue Raven is accredited by the BBB and currently holds an A+ rating. We noted that customers praised the knowledgeable staff and prompt installation but cited poor communication after completing projects. We analyzed several consumer reviews and found that some of these issues stem from the company’s financing department and third-party installers.

Read our review of Blue Raven Solar for more information.


Our Conclusion

While the upfront cost can be a hurdle, solar panels offer a compelling combination of environmental benefits, potential cost savings, and increased home value. Ultimately, whether solar panels are worth it depends on your unique circumstances and goals. A qualified solar installer can help you assess the feasibility and potential return on investment for your specific situation.


FAQ About Solar Panels

Can I install my own solar panels?

Technically, yes, you can install your own solar panels using a DIY kit. However, DIY solar panels are typically designed for smaller projects, such as powering an RV or a shed, and will not provide enough power for an entire home. Consulting a professional installer ensures a safe, efficient, and code-compliant system. DIY solar options may be worthwhile to skilled professionals. 

Are solar panels covered under homeowners insurance?

Most residential homeowners insurance policies cover solar panels. We recommend checking your current plan for coverage limits and stipulations for solar panels before purchasing a system.

Do solar panels increase property taxes?

Solar panels can increase property taxes in some states. Installing a solar power system increases your home value, which typically raises your property taxes. However, many states have laws that prevent homeowners from paying additional property taxes for solar equipment.

Do you really save money with solar panels?

Whether you truly save money with solar panels depends on several factors, including your electricity costs, sun exposure, and system size. Solar panels can significantly reduce your electricity bills over time, but it may take several years for your solar panels to pay for themselves. Our surveyed solar users reported that they typically save $100 per month on their energy costs. 

To share feedback or ask a question about this article, send a note to our Reviews Team at reviews@thisoldhousereviews.com.