PV panels cost convert sunlight into electricity using photovoltaic cells, which are set within a frame and covered in glass. These create direct current (DC), which an inverter converts into alternating current (AC) that systems in your home can use. The panels are just one component of a PV system that includes racking, meters, and batteries.
Solar panel prices have dropped considerably over the past decade. According to Colorado’s National Renewable Energy Laboratory, installation costs have fallen 64%, 65%, and 82% for residential, commercial-rooftop and utility-scale PV systems since 2010. A key driver of cost declines is lower solar module efficiencies, which are expected to continue to improve as manufacturing capacity expands and polysilicon prices drop.
Demystifying the Cost of Solar PV Panels: What You Need to Know
The size of your solar system is also a factor that impacts the cost of your system. A larger system will require more panels and therefore cost more to install than a smaller system.
Those who can afford to pay for their solar panel system in full can expect the lowest cost. They will also be eligible for the 30% federal solar investment tax credit, which has been extended through 2032.
If paying cash isn’t an option, some installers offer a solar lease or power purchase agreement. These typically require a monthly payment and last for 10 to 25 years. However, these types of financing often come with high fees and interest rates and can cause problems for homeowners who want to sell their homes in the future.