“How much does solar cost?” is the most common question people have about home solar systems. It’s a simple question with a complicated answer. The simplest answer is that our average system price in 2020 was $25,000 ($18,500 after incentives) for our average size residential solar system (8.7 kilowatts or approx. 27 modules). While that’s the average, actual solar prices in 2020 ranged from $5,000 on the low end all the way up to $70,000! The graph below shows how widely the cost of home solar can vary.
Now you know the price range of a solar system, but that’s only part of the story. North Carolina solar has 2 major incentives available: the Federal Solar Tax Credit and Duke Energy’s solar rebate. Understanding them is crucial to determining the true cost of your solar system. Here’s a breakdown of both:
Price impact: 26% discount
If you live in the US and pay federal taxes, then you’re eligible for this tax credit which will drop the price of a $25,000 solar system down to $18,500! Good news is that the 26% tax credit has been extended for a limited time. It is currently slated to drop to 22% in 2023.
Price impact: 15-20% discount
Starting in 2018, Duke Energy and Duke Energy Progress customers in North Carolina are eligible for a 15-20% solar rebate (depending on system size). You can learn more about the solar rebate on our summary page.
Incentives drastically reduce the price of home solar.
Now that we’ve established the cost of a home solar system, the next question is: “why does it cost that much?” Buying a solar system is like buying a new car or remodeling your kitchen. There is a base model that will get the job done, but within each component there are a range of prices based on materials, brand, etc. Here are the major elements that make up the cost of a solar system:
How much do each of these components contribute to the overall price? Check out the graph below.
These components are all standard, so what changes the price of system? In the list below we try to answer this by breaking down the major and minor cost variables for a solar system.
Price impact: Infinite
Size is the most important–and probably the most obvious–variable for a solar system’s cost. As your system size increases, it will require more materials and labor for installation and the price will increase as well. While the price continues to increase as systems get bigger, the price per watt (price divided by the system’s wattage) gets lower–in other words as the system gets bigger you get more watts for each dollar you spend.
Price impact: $1,000 increase for Monos
There are two main types of solar panels: polycrystalline (polys) and monocrystalline (monos). Polys are generally less expensive but are widely considered less aesthetically pleasing because their cells have a blue space-age appearance while monos have more fashionable all-black cells.
Polys are slightly less expensive, but some people (we’re not naming any names!) don’t dig their space-age blue appearance.
Monos are more expensive but their fashionable all-black cells are preferred by many homeowners (and probably also by snazzy New York fashion bloggers).
Price impact: $3,000-5,000
Most of our home solar installs are on the roof, but occasionally a roof is too shaded, too complicated, too small, too something to hold a solar system–so we install the system on the ground instead. The price increase is for trenching, drilling, racking, and permitting. While it has a higher cost at the outset, you may save more money by generating more power in the long run
Price impact: $11,500 – $12,500 for one, $9,000 for each additional (up to 10 can be installed together)
Batteries are exploding in popularity thanks in a large part to the popularity of Tesla and Elon Musk. Batteries are optional add-ons and allow you store power rather than exporting it to the grid and, if sized properly, can provide reliable backup power during a power outage.
Price impact: $150 per vent
We often have to relocate roof vents so that our solar systems are laid out in beautiful, contiguous rows–no wants a plumbing vent poking up through the middle of their solar array!
After reading this you (hopefully) have a better understanding of how much solar costs and why it costs that much. To recap, the most important points are:
Now that the cost of home solar is more clear, you’re probably jumping to our second most popular questions: “What size solar system do you actually need?” or “What financing options are out there for home solar in NC?“.
If you’re ready to get started with your home solar system, don’t hesitate to reach out by clicking the get started button and filling out a form below or schedule a call with one of our solar educators.
Tax Advice Disclaimer
Southern Energy Management is a company of solar installers, energy raters, building scientist, dogs, dreamers, and entrepreneurs but we are not a tax provider, financial adviser, or legal attorney. This post is definitely not professional tax advice or any other type of professional financial guidance. Your actual tax benefits from a solar system may be different than what we’ve estimated here, so please consult a tax professional before you make any decisions. If you don’t have a tax professional on hand, don’t worry, we keep an CPA specializing in energy and tax issues on retainer that you can use as a resource.
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