Why Solar Panels Are so Expensive: 7 Ways To Save Money

The cost of installing solar panels in your home varies depending on the size and type of system you purchase, but it can be very expensive. But why are solar panels so expensive?

The following guide provides more information about what to consider when purchasing a system, as well as tips that will help reduce its cost.

The reason why solar panels are expensive is that the technology used in manufacturing is new and advanced, which means that production costs are high. However, as more companies invest in this field and begin producing solar panels on a larger scale, it will be possible to reduce their cost.

Another reason why they can be expensive is that they are made up of several individual parts that need to be installed by a professional. This includes solar panels, inverters, racking systems, wires, and other components.

The size of your home also affects how much you have to pay for these panels as their price is directly proportional to their output capacity. The larger it is, the more expensive it is likely to be.

How Can I Reduce the Cost of Solar Panels?

If you want solar panels but can’t afford them, don’t give up hope just yet! There are many ways to reduce their cost. There are several ways that you can reduce the cost of installing a system in your home:

Rebates

Look for rebates from your local government. This can be a great way to save money on solar panels since rebates vary from state to state and even city to city, so it is important that you do some research before making an investment in solar technology.

Rebates can also vary based on the size of your system, so be sure to check with rebates for the system you want to get installed.

Another thing to consider is that rebates may be subject to change, so check in every year or two if you want the most up-to-date rebate information.

Financing

If rebates and other incentives aren’t an option for you, there is always financing for your solar system. There are many options when it comes to finding a loan or leasing your system, so do some research before deciding which option is best for you.

When looking at financing options it’s important to think about how long of a term you want the loan to be and what interest rate works out in your favor. It can also work out well if there are any rebates associated with this type of agreement that could reduce monthly costs even further.

A couple comparing finance options in front of a laptop in their living room.
Compare finance options to ensure you pick the best one

Another thing to consider when financing solar panels is whether or not they will increase the value of your home while still making them affordable enough for you to pay off over time.

This way, once everything has been paid off, the money saved on utility bills each month should end up covering most (if not all) of the cost required to maintain the system.

While financing solar panels will often be the most expensive option out there, it is still an important one to consider if you can’t afford them outright or don’t qualify for rebates and other incentives. Because of this, financing your system ultimately ends up being cheaper than paying monthly utility bills over time!

Net Metering

If you are producing more energy than you need through solar panels, then sell that excess power back to your utility company! This can earn you money and save you from paying for electricity you aren’t using.

The way this works is through a net-metering agreement with your utility company, and it basically allows you to sell the excess energy production from solar panels back to them at their retail price (the same as if they produced that power themselves).

This not only ensures the system will pay off over time, but it also ensures you don’t pay for energy that is already being produced by your solar panels!

This system does come with a few caveats so be sure to check with your utility company and net-metering agreement before signing any contracts.

You will likely need the right equipment installed on your property in order to connect this system to your utility company, and you may need permission from the company that owns the power lines running on your property.

Tax Credits

If you are looking to get solar panels installed but don’t want to wait around for rebates, there is another option that can help to reduce the cost of your installation: Tax Credits!

If you meet certain criteria, such as having a lower income or being in an area with low-income housing, then Tax Credits could be just what you need. They work by reducing the amount of taxes owed from one year to another and are usually based on how much you spend on solar panels.

Tax Credits usually range anywhere between 20% and 30% of the cost to purchase your system, which can help reduce installation costs significantly!

A words "Tax Credits" surrounded by 100 dollar bills.
Tax credits can reduce costs significantly!

Tax credits aren’t available everywhere though so be sure you check with your local government to see if they qualify for Tax Credits before making any decisions about getting a new solar panel system.

Tax Credits are a great way to reduce the cost of your solar system, which includes tax credits for a solar generator as well. They do have some limitations so be sure you understand all of them before making any decisions.

Leasing

Another option that you can consider is to lease your system. This involves paying a monthly fee, but it does not require upfront costs and will help reduce the cost of installation since companies install systems at no charge.

Companies that lease solar panels will also maintain them for you at no charge, which is important to keep in mind since this service would otherwise be an additional cost. The fee paid each month can often go toward paying off the monthly installation costs so you don’t have to worry about those either!

This option does come with some downsides though. First, leasing a system does not allow you to own the equipment and could end up trapping you into an agreement that costs more over time than if you had purchased your panels outright.

In addition, leasing only works for those who live in certain areas or have low-income housing since companies will often lease systems to these types of customers.

If you live in a more affluent area and don’t qualify for leasing, then leasing your system could end up costing you much more than if you just paid upfront.

Government Programs and Grants

There are a variety of government programs that may assist you in paying for solar panels. In addition, if you fulfill certain conditions like being unable to obtain conventional financing or having limited income, the government provides grants to help you pay for solar panels. It’s critical that you familiarize yourself with all your options before making a decision.

Government programs can be a great way to reduce the cost of your solar panel installation, but you need to make sure that they are right for you.

For example, government grants often have specific conditions and aren’t available everywhere so it’s important that you research all options before making a decision.

Grants are a great way to reduce the cost of your solar system, but they do have some limitations so be sure you understand all of them before making any decisions.

Bundling

Bundling is another option you can look into, which involves purchasing your solar panels along with several other products or services.

Bundles are typically offered by installers who want to lower the cost of installation so they bundle together different items that often go hand in hand when installing a solar panel system.

For example, bundlers will often include things like racking, permitting, and other accessories in their bundles so that they can lower your overall installation costs.

Hands from a woman counting 20 dollar bills in front of a notepad and pen on a wooden desk.
There can be more than 1 option to save money

Bundled packages are a great way to reduce the cost of solar panels since you get more than just the panels for less!

The downside to bundling is that it usually means purchasing equipment from the same installer and they may not offer a wide variety of products or services, which could potentially lead you into an expensive agreement if this isn’t what you’re looking for.

Final Thoughts

Solar panels are expensive because the cost of installation is high. Solar panel prices have been decreasing over time, but they still require a significant investment on your part to purchase and install them.

We’ve provided some information about the best options that can reduce the cost of your solar panels. We recommend that you always research your options to find the best strategy for your situation.

If you have bad credit or are unable to obtain conventional financing, we have a post about 3 great options to get solar panels with bad credit. Hopefully, this will help you get started on your journey to solar power!

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