Where it’s possible, an investment in rooftop solar can help you reduce your electricity costs long into the future and increase the value of your home. Having less-expensive solar power can also increase the cost effectiveness of other green technologies, like EVs and heat pumps, compounding your ability to cut your carbon footprint.
$15,000 - $20,000
Based on typical system size of 6 kW
About the technology
How it Works: A rooftop photovoltaic (PV) system uses solar panels to convert sunlight to direct-current (DC) electricity. An inverter then converts from DC to alternating-current (AC) electricity – the type used in your home.
Grid-Tied Systems: Most rooftop PV systems are tied to the electrical grid. This allows you to take electricity from the grid when you need extra (such as at night) and put electricity onto the grid when you generate more than you need. Generally, your local utility will provide a credit for the power you put on the grid.
Battery Storage: Battery systems can be installed along with solar as a backup power source during power outages. Also, depending on your electric rates, a battery can store cheaper solar power for later use to reduce the need for high-priced electricity from the grid. Given the high cost of battery storage, however, this storage of power for later use is generally not cost effective.
Economics: How much you’ll save by going solar depends on a variety of factors specific to your situation. For many, however, solar is now a cost-effective option, with systems paying back in less than 8 – 10 years — well under a system’s expected life of 25 years.
Environment: The environmental benefits of solar largely depend on the level of emissions associated with the grid-supplied power being displaced. The benefits are greatest where fossil fuels (such as coal, oil, and natural gas) provide a large percentage of the local power.
Maintenance: Very little routine maintenance is required. Rinsing or washing the solar panels a few times a year will remove dust/debris that can degrade the system’s efficiency. With the exception of certain types of inverters (which may require replacement after about 15 years), the components can be expected to last for the lifetime of the system.
Frequently Asked Questions (FAQ)
1. How does a solar system work?
A solar electric system, also known as a photovoltaic (PV) system, uses solar panels to convert sunlight to electricity. The panels produce direct-current (DC) electricity, which must then be converted to alternating-current (AC) power — the type used in your home. An inverter (or a series of panel-mounted microinverters) is used to convert from DC to AC power. Almost all solar systems are “grid-tied”. When you produce more electricity than you use at any given time, most utilities allow you to put that electricity back onto the power grid and give you a credit for the power you provide.
2. How can I tell if my house is a good fit for solar?
A home with an uncluttered south-facing roof and little or no shade is ideal. Somewhat shaded roofs and east- and west-facing roofs also are viable, but have a lower annual output for the same size solar system. A qualified solar installer can perform an analysis of your roof and suggest your best options.
3. Does having solar on my roof mean I am “off the grid” and not connected to my local power company?
No. Having solar on your roof does not generally mean you are “off the grid”. Almost all solar systems are “grid-tied” systems, allowing a homeowner to use the electrical grid when needed. For example, you can often put excess electricity onto the grid during the day when the sun’s shining and draw power back from the grid at night.
Battery backup systems can be installed along with solar as a way for homeowners to deal with temporary power outages. Although it adds to the cost of the system, batteries can provide power to critical appliances such as refrigerators and computers. Battery systems can even be sized large enough to power all of a house’s electrical loads for multiple days, but that’s generally cost prohibitive for the majority of homeowners.
4. Do solar systems work in a power outage?
If your grid-connected solar system doesn’t have battery storage, your system will shut off in the event of an outage. This is to prevent emergency responders and electric utility personnel from being injured by electricity that is being fed back into the grid from solar systems. However, if you don’t have a battery, some types of inverters allow you to manually disconnect your system from the grid and access solar power during an outage, as long as the sun is shining.
5. What happens at night or on cloudy days? Where does my electricity come from?
At night and on very cloudy days, a solar system goes dormant. During these times you will get power from the grid.
6. Will my roof leak?
Solar mounting systems rely on the same leak-resistant technologies and installation principles as other roof features such as vents and exhaust fans. Ask your solar installer how your system will be mounted and how any roof penetrations will be sealed.
7. Does my roofing material impact my ability to get solar?
The solar industry has created mounting methods and equipment for most of the commonly used roofing materials. Some types of materials (such as composition shingles) are easier to install solar on, and others (such as clay tiles or wood shingles) present more of a challenge and may involve a higher installation cost.
8. Can I have solar panels mounted on the ground instead of on my roof?
Yes, some solar installers offer this service, but it’s generally more costly and complex.
9. Will solar installers provide small systems?
Some solar installers will provide very small systems (even under 1 kW). In general, however, smaller systems are less economic. While they have a lower overall cost, they have a higher per-kW cost.
10. What happens to the solar hardware when I sell my home?
Because they are designed for a specific location, solar systems almost always stay with the home on which they are initially installed. The cost to remove and reinstall a system on a different home is very high. Solar homes typically have a higher resale value because they have lower monthly energy costs.
11. Can I heat my pool with my solar electric system?
While an electrically driven heat pump (powered by solar) can be used for pool heating, this technology is not widely used for this purpose. The solar technology normally used to heat a pool is called solar thermal heating which warms the water directly in solar thermal panels facing the sun. This approach is different from solar photovoltaic technology which generates electricity.
12. Can I provide hot water (for showers, etc.) with my solar electric panels?
Two key solar technologies are available for providing hot water for a home. Solar thermal (not solar photovoltaic) heating involves running a fluid through a particular type of solar thermal panel. This is a more-direct way to use solar for water heating, but is generally expensive and prone to leakage and other maintenance problems. The other approach involves producing electricity in solar electric panels and then using this electricity for water heating. You can use a highly efficient heat pump water heater (HPWH) or a conventional electric water heater.
1. How much do solar systems cost?
System costs vary by size and technology. A typical roof-mounted system normally ranges between $2 to $4 per Watt. For a 4 kilowatt (4 kW, or 4,000 Watt) solar system, costs generally range between $8,000 and $16,000 before the federal tax credit. Through the end of 2022, the 26% tax credit is available for residential solar systems, but this is currently scheduled to drop to 22% in 2023, and to zero in 2024. Smaller systems generally cost more per Watt than a larger system. In some cases, homeowners going solar don’t pay for the entire system up front. Instead, they take out a loan, or participate in a lease or Power Purchase Agreement (PPA) program offered by a solar installer. If you can afford it, the economics of the direct-purchase approach are generally the most favorable.
2. What is Net Energy Metering (NEM)?
Net Energy Metering (NEM), which is used by many utilities around the country, measures the amount of excess electricity put onto the grid by your solar system as well as the amount of electricity you take from the grid. The utility keeps track of this for you and informs you each month about your energy balance. Sometimes customers with solar do not pay a monthly electric bill (other than a monthly charge), but annually receive a ‘true up’ bill that accounts for their net generation or net usage. If the true-up indicates net generation during the year, the homeowner is compensated either by check or by rolling over a credit toward future charges. If the true-up indicated net usage, the homeowner pays the utility for the net electricity usage for the year.
3. What is my up-front cost? What costs might I face later on related to the solar system?
Costs vary greatly depending on whether you purchase the system, take out a loan, or sign a lease or Power Purchase Agreement (PPA). If you purchase the system, you’ll pay the cost of the system up front and also be responsible for any future maintenance. With a loan, you’ll generally pay little or nothing up front for the system, pay back the loan with a monthly payment, and be responsible for any maintenance. With a lease or PPA, you don’t own the system. Typically, you pay little or nothing up front and have no responsibility for maintenance, but you’ll pay a fixed recurring monthly fee for electricity. If you can afford it, the economics of the direct-purchase approach are generally the most favorable.
4. Who benefits most from solar power?
The most cost-effective installations are in homes with larger electric bills and unshaded roof space facing generally south. But with prices rapidly coming down, many people with smaller bills and less-than-optimal roof orientations also find the economics of solar to be compelling. Homeowners sometimes install solar as a way to benefit the environment, rather than for pure economic reasons.
5. How does solar impact my property value?
Studies have shown that homes with solar energy systems sell for 4 – 5% more than homes without them. However, your property value will likely increase more if you own, rather than use a lease or a Power Purchase Agreement for your solar system.
6. Will having a solar system help the sale of my home?
It will depend on how you acquired the solar system and the age of your system. The value of your home is likely to increase if the solar system is free of encumbrances, like a lease or a PPA. With a lease or PPA, the details would need to be worked out with your solar provider to transfer the lease or PPA obligations to the new homeowner.
7. What is the likely payback period (in years) for my solar investment?
Payback time is determined by many factors, most importantly the amount of your current electricity bill and the up-front cost of your system. Customers who directly purchase the system and have large bills may see a return on their investment in as little as 3 to 5 years, while those with lower bills will generally have longer payback periods. Those in regions with higher electricity rates will have shorter payback periods.
8. What is the difference between secured solar loans and unsecured solar loans?
The primary difference between secured and unsecured solar loans is that secured solar loans require that you promise an asset, usually your home, as collateral for the money that you borrow. Unsecured solar loans do not, but their interest rates are generally higher to compensate for the increased risk taken on by the lender.
9. How long is a typical lease/Power Purchase Agreement (PPA) contract?
Lease and PPA contract periods can vary, but a 20-year contract is typical.
10. What happens at the end of my contract if I’m in a lease or Power Purchase Agreement (PPA)?
At the end of your contract, you’ll need to work with your solar provider to determine if you’ll keep the solar system on your home (there may be a cost associated with this) or have it removed. Your options should be written into your initial contract, and it’s always good to review such contract language carefully before signing an agreement.
11. What if I have a solar lease or a solar Power Purchase Agreement (PPA) and I want to sell my home? What do I do about the contract?
Typically the contract is sold to the new home buyer, but sometimes there are complications. The options you have in this situation should be outlined in your initial contract with the solar installer, and it’s always good to carefully review such contract language before signing an agreement.
12. After getting solar, what is the fee for removal & replacement of the solar panels if I need to reroof?
If your roof needs to be replaced during the life of your solar system, a professional will need to uninstall and reinstall the part of the system that is on the roof. The cost for this service typically ranges from about $500/kW to $800/kW of solar capacity.
13. Do I need to get insurance when I buy a rooftop solar system?
Often your standard homeowner’s policy will cover the solar equipment installed as part of your system. In some cases, a rider may be required on your homeowner’s policy. It’s best to check with your insurance carrier.
1. Are solar electric systems reliable?
Yes. Solar systems consist of various components, but the key ones are the solar panels and the inverter(s). While the energy generated by a solar panel decreases a small amount each year, they are guaranteed to operate for 25 years. The reliability of an inverter depends on the type. Microinverters are quite reliable and can be expected to last for 25 years. Central inverters, however, are less reliable and can be expected to require replacement before the end of the 25-year expected life of a solar system.
2. How long are solar inverters guaranteed for?
Central inverters (also called string inverters) generally come with a 10- to 12-year warranty, but many manufacturers offer extensions to 20 years for an extra fee. Microinverters generally come with a 25-year warranty.
3. What maintenance do I need to do on my solar panels?
Rinsing or washing the panels a few times a year will help keep the system operating at its best. Washing can be done with a garden hose and should be done early in the morning before the panels get hot. There is a very small chance that spraying cold water on hot solar panels can cause damage.
4. Who is responsible for repairs, and what happens if the system breaks down?
This depends on how you choose to install your system. Most Power Purchase Agreements (PPAs) and lease programs include the maintenance costs for the life of the contract. So if there is an issue, you call your provider. If you directly purchase the equipment or take out a loan for it, you (as the owner) have the responsibility.
5. If a lease or Power Purchase Agreement (PPA) is 20 years long, will the equipment last that long?
Most Power Purchase Agreements (PPAs) and lease programs cover maintenance (caused by equipment malfunction) for the life of the agreement. In these cases, the equipment will be maintained at no cost to the homeowner, but check the specifics contained in any agreement.
1. What size solar energy system should I get?
The best size for your solar energy system will depend on a variety of factors, including how much electricity you use on an annual basis, the climate where you live, the amount of shade that falls on your roof, the electricity rate plan you’re on with your utility, etc. Your YellowTin Dashboard will provide a rough estimate of an appropriate system size, but it’s best to obtain estimates from several solar installers who can perform more-detailed analyses.
2. If I have an old roof, do I need to replace it before installing solar?
If your roof has less than 15 years of life left, you should seriously consider re roofing prior to installing solar. This is because it can be costly (approximately $500/kW to $800/kW) to remove and reinstall the system’s panels and roof mounting hardware if you need to reroof after going solar. A roofer or solar professional can help you determine the amount of life left on your roof. Solar installers can generally coordinate with your roofer if you wish to have solar installed at the same time as you reroof.
3. How long is the install time?
An actual solar installation is typically completed within a day or two. An inspection by the city is then typically scheduled within a week after the installation. After passing inspection, a permission-to-operate (PTO) certification is generally provided by the utility. The best installers often have a backlog, which can result in wait times when scheduling the install. It’s best to plan ahead, and this is especially true at times when a tax credit is dropping/expiring since many homeowners will be trying to install systems prior to the deadline.
4. What about my homeowners’ association (HOA)? Do I need approval?
If you’re part of an HOA, approval is typically required before a solar system is installed. You should check with your HOA on its solar policy.
1. What types of incentives are available for rooftop solar?
Predominant among these is the 26% federal tax credit. In some cases other incentives are also available at the state, local, and utility levels. Taken together, incentives can take thousands of dollars off the price of a solar system, making solar much more affordable.
2. How does the solar federal tax credit for my homework?
The tax credit is currently equal to 26% of the installed cost of a solar system and is generally available for someone’s principal residence. On 1/1/23 the credit is scheduled to drop to 22%, and on 1/1/24, it will drop to zero. Since it’s a tax credit, homeowners can take the amount of the credit (up to their tax liability) directly off their tax payments, rather than as a deduction from their taxable income. It’s always wise to consult with a tax advisor.
3. What are the filing requirements for the federal solar tax credit?
To claim the credit, you must file IRS Form 5695 as part of your tax return. You calculate the credit on the form and then enter the result on your 1040. If you end up with a bigger credit than you have income tax due, you can’t use the credit to get money back from the IRS in that year. Instead, you can generally carry the credit over to the following tax year(s). However, you can’t carry unused credits into any year following the year the credit expires (which is currently scheduled to be 2023). Please be sure to consult your tax advisor.
4. Can I claim the federal tax credit for a rental property?
You can’t claim a credit for installing solar power at rental properties you own, unless you also live in the house for part of the year and use it as a rental when you’re away. In general, you’ll have to reduce the credit to reflect the time you’re not there. Please be sure to consult your tax advisor.