How Much Does Solar Cost
Going solar is an investment with both immediate and long-term benefits for your home. You can take control of your electricity bills and increase the value of your property by powering your home directly from your roof using free, abundant energy from the sun. Learn more about the factors and cost components of solar.
The True Cost of Solar
The factors that make up how much it costs to install a solar panel system fall into two general categories of hardware costs and soft costs. Hardware costs include the actual equipment that make up a solar panel system: panels, solar inverters, mounting hardware, wiring and potentially, home batteries. Soft costs are made up of sales, marketing, admin, labor and permitting costs. The true cost of solar ultimately varies depending on the installer and their soft costs, how they price equipment and any financing costs.
Sales and Marketing Cost
Sales and marketing (customer acquisition) are one of the largest expenses incurred by most solar companies and can account for up to 18% of the final price1 of a solar panel system. Regional and national installers may often pay for leads by partnering with big-box stores, use door-to-door sales (where teams are paid on commission and incentivized to close the sale) and spend on online advertising.
Tesla has drawn on our experience installing over 500,000 solar systems to streamline the end-to-end online ordering, design and installation experience for customers and leveraged referrals and customer education instead of paying for leads. This allows us to provide the lowest price solar panels to customers.
1https://www.energy.gov/eere/solar/solar-soft-costs-basics
System Design
The approach to designing a solar panel system can differ dramatically by installer, which can lead to significant differences in cost. The best way to compare costs across companies is to look at how much you will be paying per watt ($/W). Learn more about the factors across installers that may affect your system design.
MoreLess- Shading: Shading has a large impact on how much energy your system produces, and the balance of value versus cost of placing panels on certain sections of your roof. Shading can include clouds and seasonal weather conditions along with pre-existing structures such as trees, buildings, chimneys and more. Installers differ on how shading is assessed and incorporated into your design.
- Layout: The overall cost of your system is connected to where your solar panels are installed on your home. The layout of your system will vary based on where your roof can get direct sunlight. Make sure to check with your installer so you can optimize your system layout for efficiency and energy production to reduce your overall costs.
- Modeling: The margin of error in how much a solar panel system will produce from your home can also differ depending on whether an installer uses third-party software or does this in-house. Tesla uses a combination of high-resolution aerial and satellite imagery, along with site visits to design your solar panel system. Our designers will place the solar modules for highest production and arrange them for best aesthetics. With Tesla, you can share your preferences on your solar layout and provide input to our designers using our online resources, including the Interactive Layout tool.
Equipment
A solar panel system consists of solar panels, mounting hardware, inverters, conduit and other components such as electrical panels and monitoring equipment. When paired with a home battery like Powerwall, a solar panel system can better protect against grid outages, shield you from peak utility rates and enable you to power your home and electric vehicles off of sunlight. There are price and quality variations in all components of a solar panel system.
MoreLess- Solar Panels: The cost of solar panels can vary based on manufacturer and country of origin.
The top brand name products often carry a price premium due to the manufacturer’s financial performance and health, and proven reliability over time. Financially healthy companies are more likely to have credibility in the industry and be able to support performance and product warranties. Solar panels produced in the U.S. have a higher price due to proven reliability over time, greater operating costs in the U.S. and transparency around supply chain and raw materials.
Tesla sources high-quality, premium solar panels from established and reputable solar manufacturers and because of scale, can produce and purchase them at a lower cost. Those saving are passed onto our customers.
- Solar Inverters: Solar inverters are an essential part of all solar systems and are placed between solar panels and the rest of your home. They convert the direct current (DC) produced by solar panels into alternating current (AC) used by your home. Like solar panels, solar inverters can vary in price based on manufacturer, efficiency and warranty.
Tesla has leveraged our deep knowledge in power electronics to develop Tesla Solar Inverter for customers. Find additional information about what Tesla Solar Inverter has to offer.
Installation
The amount of installation labor you need for your solar panel system is largely a function of the number of panels you need installed. Professional installers mount solar equipment to your roof, wire the system into your home and ensure that all the components are functioning properly.
MoreLess- Solar Panels: Advanced panels have a higher wattage, meaning fewer panels are required for the same system production, resulting in less labor cost.
- Mounting Hardware: Standard mounting hardware includes rails, brackets and more to securely install the panels onto the roof. Installers often install with off-the-shelf mounting hardware that isn’t designed around ease of installation. During most installations, mounting rails are secured to the roof planes and solar panels are attached to those rails. With Tesla’s Zep mounting technology, we use 30% fewer anchor points than traditional solar companies, meaning less roof penetrations and faster installation.
- Home Batteries: Home batteries allow you to store energy your solar panels produce for later use. If you’re installing solar with a home battery, the final home battery cost will include the cost of the battery itself along with the electrical work and installation cost for the battery. When installing with solar, rechargeable home battery systems like Powerwall can qualify for federal incentives for homeowners.
Service and Warranty
Your installer will often provide solar panel system warranties that cover workmanship-related product issues and hardware-specific performance:
- Product Warranty: Product warranty covers defects in design and material of the solar panels.
- Performance Warranty: Product performance warranty is offered for a longer time period and will provide coverage for the solar panel production effectiveness over the warranty period. Just like the equipment itself, you will want to make sure the installer and manufacturer provides a reliable warranty for your solar panel system.
Review your solar warranties, as warranties often differ by installer. Some installers may cover the equipment and product but not the cost of labor associated with the work that needs to be performed. For example, depending on the warranty, the labor cost associated with replacing or repairing a defective panel may not be covered.
Tesla service crews are located locally and nationwide for any problems that may come up. To ensure confidence in having the right solar panel system for your home, Tesla’s solar panel systems come with a 25-year performance warranty. Learn more about Tesla’s comprehensive service and warranty.
Approvals, Permitting and Additional Financing Costs
Installing a solar panel system requires electrical and construction work, and most areas require a permit, inspection and utility approval to install and turn on your solar panel system. Requirements vary by location and in some areas you may need an electrical permit along with a building permit and dedicated solar permit. The cost of permits depends on your solar panel system cost.
Additionally, installers may have hidden fees, such as dealer fees, that can increase your total solar cost. Learn more about understanding your solar estimate.
Tesla handles the permitting and utility approval process for you.
The Value of Solar
Home Value
Industry studies have found that solar can increase the value of your home by approximately three and a half percent when financed or purchased with cash. Homes that have solar installed often sell faster, and at a premium compared to homes that do not.
Total Value Over Time
All solar installations start building value immediately after being powered on. Purchasing with cash has the highest long-term value. Financing allows you to immediately enjoy clean energy with a small initial investment. After your solar system is fully paid off, you will continue to enjoy the system with no monthly payment.
Solar Incentives
Solar panel systems, solar panel systems paired with batteries and standalone batteries are all eligible for federal tax credits until the end of 2034. Reach out to your licensed tax professional to determine your eligibility for any federal, state or local tax incentives.
The Value of Tesla
Tesla operates the most advanced factories ever built as the world’s leading battery and electric vehicle manufacturer, and all our products are designed to integrate seamlessly. As a manufacturer, installer and service provider, we have developed unique expertise in delivering Energy products with the best value to our customers. Being vertically integrated and manufacturing Powerwall, Solar Roof and Tesla Inverters in the U.S. has allowed us to cut out middlemen, reducing costs and improving ease of service.
Understanding Your Solar Estimate
You can get a cost estimate for a solar panel system from multiple installers. Your solar estimate will show a total dollar cost for the total system size and capacity, typically measured in kilowatts. The total system size and capacity for your home is determined by how much energy you use along with your roof’s sunlight exposure, and panel efficiency. System size is shown in kilowatts (kW) or watts (W).
Comparing Estimates Using Cost-Per-Watt
The best way to understand and compare estimates between different installers is to determine how much your solar panel system will cost per watt ($/W). You can do this by taking the total dollar cost of your solar panel system, subtracting out any included battery costs, and dividing it by the number of watts (kW x 1000).
Understanding Financing Costs
It's crucial to obtain both cash and financing estimates for your system so you understand how much you are paying in total. By comparing both options for a solar panel system, you can uncover the true costs of financing.
If you are considering financing your solar panel system, it’s important to identify any additional fees in your estimate as they may be the reason for a higher solar estimate. Most installers work with third-party financing companies to provide you with financing options. Those third-party financing companies charge installers for offering financing options to customers. These are known as dealer fees. As a result, installers will charge customers additional hidden fees to make up for extra costs like dealer fees.
To understand the true cost of your solar panel system, compare the estimate between your cash option to your financing option to view how much financing fees the estimate includes. Hidden fees like dealer fees may not be shown upfront in your solar estimate.
Tesla has designed our online ordering process around transparency for our customers. To get started, input your installation address online and average monthly utility bill to see your recommended system size and breakdown of costs for both cash and financing options.
How to Go Solar with Tesla
Schedule a virtual consultation with a Tesla Advisor or design your solar panel system online to start your solar journey.