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How much do solar panels cost in 2022?

How much do solar panels cost in 2022?

Reduce your solar costs with rebates and incentives

We’ve been talking about factors that add on cost to a solar installation, but it’s also equally essential to consider the ways you can save with solar rebates and incentives. Tax credits, cash rebates, performance-based incentives (PBIs), and energy credits are all ways you can get money back on a solar installation. The availability of these types of incentives almost always depend on where you live – utilities, cities, and states all usually offer their own solar incentives to people living in their service areas.

The federal solar tax credit: solar’s best incentive

The best incentive for going solar in the country is the federal solar tax credit, or the investment tax credit (ITC). This incentive allows you to deduct 26 percent of the cost of installing solar panels from your federal taxes, and there’s no cap on its value. For example, a 10 kW system priced at the national average ($2.76/W) comes out to $27,600. However, with the ITC, you’d be able to deduct 26 percent of that cost, or $7,176, from your taxes. This essentially reduces the cost of your system to the $20,424 price tag we highlighted at the beginning of this article.

How do you pay for a solar panel installation?

Once you know the cost of solar for your unique project, it’s time to decide how you’ll pay for solar. There are three primary ways to finance a solar panel installation: a cash purchase, a solar loan, or a solar lease/power purchase agreement.

Generally, a cash purchase is right for you if you’re looking to maximize your savings from solar, you have enough tax liability to take advantage of the solar tax credit, or you have the funds available to pay for a solar panel system upfront.

A solar loan is right for you if you don’t want to shell out the amount of cash required to pay for a solar panel system upfront, you still want the most savings on your electricity bills as possible, and you would like to be eligible for all incentives and rebates.
A solar lease or PPA is right for you if you would prefer someone else to monitor and maintain the system, if you aren’t eligible for tax incentives, or if you’d just like to reduce and/or lock-in your monthly electricity bill.

How does a solar panel installation work?

Installing solar panels doesn’t happen overnight – there’s a process for what needs to happen to get your panels ready to begin powering your home. From the day you sign your contract with your installer, it will typically take between one and three months before your solar panels are grid-connected and producing energy for your home. We’ve outlined the five-step solar panel installation process below:

1. Choosing and order your equipment

The very first step in a solar installation is to choose your solar panels and inverters, and confirm with your installer so they can order it all for you. The two primary components you’ll need to evaluate for your system are solar panels and inverters. Durability, efficiency and aesthetics are the primary factors most homeowners will use to compare the various brands (other than price). Learn more in our guide to choosing solar equipment.

2. Engineering site visit

After you sign your solar contract, an engineer (likely an employee or sub-contractor of the installer you’re working with) will come by your property to inspect your home and make sure everything is compatible with your new solar system. 

During the visit, the engineer will evaluate the condition of your roof to ensure that it’s structurally sound. They will also look at your electrical panel – the grey box in your basement – to see if you’ll need to upgrade it.

3. Permits and documentation

As with any big financial decision, installing solar panels involves a lot of paperwork. Luckily, most of this paperwork is dealt with by the installer. They’ll help you apply for solar incentives and fill out any permits and documents you need to legally go solar.

4. Solar installation: the big day

The actual installation is an exciting day for every solar homeowner who wants to rely on renewable energy as opposed to a utility company. There are several individual steps to the actual installation day, including preparing your roof with racking, setting up wiring, placing panels and inverters, and attaching everything together. The timeline for the installation will range from one to three days, completely dependent on the size of the system you are installing.

5. Approval and interconnection

The final step of going solar is “flipping the switch,” so to speak, and officially commencing to generate power from your rooftop. Before you can connect your solar panels to the electric grid, a representative from your town government will need to inspect the system and give approval. During this inspection, the representative will essentially be double-checking your installer’s work. He or she will verify that the electrical wiring was done correctly, the mounting was safely and sturdily attached, and the overall install meets standard electrical and roof setback codes.

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