What is the average cost of a residential solar installation? It’s a very common question that we receive as a solar company, but it’s difficult to answer as there is no such thing as an “average” home.
We are the oldest solar contractor in the San Diego Area and we have installed thousands of systems and over 100,000 solar panels. This year, 2016, our average residential sale has been about $31,000 and about $4.15 per watt before you take the Federal Investment Tax credit of 30% off the final price. We have seen prices drop from over $10.00 per watt a decade ago to today where many systems are sold for around $3.50 per watt.
Much like a new a car or a truck, the prices of solar installations’ can range dramatically. Take, for example, the Ford f150, the world’s best-selling vehicle. The truck can start around $25,000 for a basic version and run up to over $60,000 if you add a crew cab, four- wheel drive, air conditioned seats, etc. Much like these added amenities, factors such as a tile roof, limited roof space, long or difficult wiring runs, a ground mounted structure or a service upgrade can all add to the costs of a basic solar system installation, but rarely adds so much that the the project doesn’t make financial sense or pay for itself in a short number of years. Panel efficiency, types of inverters, and monitoring can also affect the cost of a system, so make sure if you have multiple quotes that you are comparing apples to apples.
Common Pricing Structures for Solar
There are several ways that companies will show you pricing. As an example I will use a $30,000, 7000watt system for the following examples.
1. $30,000 CASH purchase for a standard shingle roof installation. This price can then be divided into a cost per kW, or Watt. It is very common to divide the price by the DC rating of the system. For example $30,000 for a 7000watt DC system is $4.29 per DC watt.
2. $21,000 CASH Price. $30,000 less (30% Federal Investment Tax Credit of $9000) = $21,000. Paying $21,000 cash upfront can be achieved by financing the portion eligible for tax credit. Unless someone else is financing the Tax Credit you need to pay the entire $30,000 and wait to get your money back from the Federal Government.
3. ZERO DOWN purchase or Lease. There are many ways to pay for solar. PPA’s, leases and ownership financing are the primary ways to finance solar. The companies that focus on monthly payments will typically offer a lease with an escalating monthly payment. The idea is to offer a customer a monthly payment that starts lower than the utility bill it’s offsetting and does not exceed the rate of utility escalation. These companies often have easy to qualify financing but use less expensive components. Stellar Solar strongly believes in monthly payments and financing that remain fixed throughout their stated term.
Make sure you always understand the difference, and be careful of unconventional loans that promise complicated tax benefits. If it sounds too good to be true it probably is. If you do not completely understand what you are getting into you should never do it.
Stellar Solar will present all your options in a no-pressure, educational manner and simply make suggestions as to what will work best for your situation.