Going Solar In 2023 Complete Guide: Everything To Know

We’ve all heard that solar can save you money in the long run, but did you know it can save you money right away as well? But is solar right for your home? In this article, I’ll walk you through 7 easy steps to figure out if solar is right for your home.

Key Takeaways

Most homes will save more with solar electric than solar hot water
You can use simple online tools along with your electric bills to see how much solar power you will need.
The average US solar installation is 10.9 kW and the average cost per watt is $2.85.
You may be able to qualify for a tax credit worth 30% of your solar installation costs, including parts and labor.
Savings will vary, but a rough estimate over 25 years is $50,000 for a cash purchased system, $35,000 for a solar loan finance system, and $10,000 under a leased system.
Get multiple quotes to find a solar in your area with the best offer, experience, equipment, and customer reviews.

7 Easy Steps To Figuring Out If Solar Is Right For Your Home

Solar Electric or Solar Hot Water
How Much Electricity Do I Use
How Much Solar Power Do I Need
Solar Installation Costs and Rebates
Determine Total Savings and Payment Options
Other Considerations To Going Solar
Find Solar Installation Companies Near Me

Step 1: Solar Electric vs Solar Hot Water

First, you’ll need to decide which type of solar you’re interested in. There are two main forms of solar power available for homes, solar hot water and solar electric (also known as solar pv).

Solar Hot Water

Solar hot water involves a type of solar panel which has a series of pipes running through it. Water pumping through the pipes gets heated by the sun. You can then use the hot water for any hot water needs in your home, for example showering or washing dishes.

Solar hot water is a less popular option than solar electric.

Solar Electric (PV)

Solar electric or solar PV is where solar panels are used to convert sunlight into electricity.

Estimates show that solar hot water typically meets about 50-80% of your hot water needs and that hot water consumes about 15% of your homes energy. While your exact conditions may change, solar electric usually saves the most money for these reasons.

This article will focus on solar electric.

The amount your solar electric system will cost and the amount you can save will depend on a number of factors. I’ll walk you through these points in detail but keep in mind your exact expenses and savings will vary.

If at any point you want help figuring all this out or want an actual quote instead of an estimate, reach out to our recommended solar providers here.

Step 2: Determine Electricity Use

Next, we need to figure out how much electricity your home uses. Many electric companies have an online platform where you can check your electricity use. You can also use paper bills if you have them.

If you are looking at your monthly electric bill, you simply take the number of kilowatt hours, or kWh over the past 12 months and add them together. If your electric company has already provided the past 12 months of electricity use, no further steps are needed.

Step 3: System Size and Solar Electric Potential

Figuring out your system needs and electricity generation potential is not a simple task. This is because complex calculations are needed and every home and solar installation is different. Luckily, there’s an easy to use tool known as PVWatts we can use to come up with a good estimate.

There are couple of different ways to figure out your system needs using PVWatts. I think the best way is to enter some basic information and then go back and edit as needed.

How To Use PVWatts by NREL

1. Property Information

First, enter the address of the property you want to install solar. You could also enter just your zip code or city.

This will give the system your approximate longitude and latitude, as seen on the screen below. Click “Go to system info”.

2. System Information

Next, you’ll see PVWatts asks for some information about your system.

The first value “DC System Size” has a default value size of 4 kW. For reference, according to Energy Sage, the average US solar installation is 10.9 kW. The smallest average solar installation in 2022 was California with a system size of 8.53 kW in California. The largest was was Arkansas at 14.85 kW.

Therefore, I recommend using the mapping tool to figure out about how much solar you can fit in the desired area. To do so, click “Draw Your System“

Click “Close“

Then, find your roof.

You simply click on the screen to drop a point. You can move the points around until they cover the area you are interested in installing solar. You can do this if your system is on your roof or on the ground.

Click “Save”.

PVWatts will add the value into the System Size box.

3. Module Type

The “Standard” option is the default here. Standard is for panels with an efficiency of about 14-17%. The premium panel option is for panels with an efficiency of 18-20%. We will go into more detail about panel selection in a moment.

For now, select the premium option as many of the top providers of solar panels in the past year sell panels with an efficiency near or above 20%.

4. Array Type

The next field to fill out is the array type.

If you are putting your solar system on a rack on the ground, choose “Fixed (open rack)”.
If you are putting your system on the roof, choose “Fixed (roof mount)”.

The difference is a ground-mounted system will have better air flow than a roof mounted system, which helps the panel efficiency. If you’re installing a system that can track the sun as it moves across the sky, choose the appropriate mount.

5. System Loses

All solar systems will loss some of the electricity they are able to generate. These losses occur from shade, dirt and snow, while other losses are from pushing a current through wires.

The default value for the system losses is 14%. This is likely a good default value so we will leave all values as they are. If your solar installation is expected to have significant shading, you may want to increase the shading loss value.

To do so, click on “Loss Calculator” button and enter a the percent of your system that you expect to be shaded. Then, click “Save“.

6. Tilt Angle

The tilt angel is the angle between your installed panels and a flat surface at degrees. If you are installing on a roof, you can use the roof pitch. You can either calculate the roof pitch of your home or use one of the default values below.

The most common roof pitches are 4/12, 6/12, and 8/12. Find the pitch that best matches your roof.

4/12 roof pitch is a lower pitch and is often used in ranch-style homes
6/12 roof pitch is often used for average roof pitches types
8/12 roof pitch is often used for colonials and capes

The default is 20 degrees. Find your pitch and use the table to find the appropriate angle.

Enter the angle in the tilt angle box.

7. Azimuth

Azimuth is the direction your panel is facing. It represents the angle between North and where the sun is. The direction of your panels will of course be determined by where the sun is during the day.

If your panels face South, the azimuth is 180.

It’s best to install solar panels facing south if you live in the northern hemisphere and North if you live in the southern hemisphere. If you don’t know this value, you can figure this out using a map, compass, an app or by looking at the sun.

The default is 180 degrees, so this could be an important variable to change if your system or roof don’t face south.

Use the table below to find the appropriate angle.

Enter the angle into the box

Last, click “Go To PVWatts Results”

PVWatss Reults

PVWatts will then show you about how many kWh such a system will be able to generate in a year.

Compare this to your electricity consumption from earlier. Keep in mind this is just a rough estimate, so its ok if the two numbers aren’t exactly equal.

In the top 10 solar states in 2022, the average home was able to met 84-104% of its electricity needs through solar. To see where you stand here, take your annual electricity consumption and divide it by the kWh expected by PVWatts. You should hopefully fall somewhere in or close to this range.

If the output is low, you may need a larger installation area, higher wattage panels, more efficient panels, or that there is too much shade on your property. You can still save money with a system that meets a lower percentage of your needs. However, this may impact the payback period.

Not being able to generate significant amounts of solar power is one of the main reason you may not want to go solar.

Now, that we have a better idea of your system needs and technical details, we can look at actual panels and other system components, as well as costs and rebates.

Step 4: System Selection, System Costs, and Rebates

The national average for going solar in 2022 was $2.85 per watt according to Energy Sage. Of the top 10 states that go solar, here is a closer breakdown of the cost per watt and average total in each state.

Your solar installation costs will change depending a number of factors. You may also be able to get certain rebates and incentives to help bring down the cost of your system.

Costs include panels, wires, inverters, mounting equipment, labor and other expense. You may also need a new roof if its not in good shape and typically older than 10 years or so. You may also need to upgrade your electrical system

Solar Panel Options

The most popular panels reported from EnergySage is Q Cells, REC Group and Panasonic. These three brands of panels made up over 50% of quotes in 2022.

If you find a panel you are interested in, you can take the wattage determined earlier and divide it by the wattage of the panel to figure out how many panels you need.

Q Cells Solar Panels

Q Cells solar panels cost between $2.32 and 3.16 per watt. Panel wattages range from 350-410 watts.

Q Cells has limited options in terms of solar panels, but the efficiency reaches or exceeds 20%. Like most other solar panels, they come with a 25 year warranty, but will last longer.

All solar panels will slowly loss efficiency over time. A panels “Nominal Power” is the percentage of its power output you can still expect to achieve after a certain amount of time.

Q Cells solar panels have a nominal power output of 86% or better after 25 years.

REC Group Solar Panels

REC group solar panels cost between $2.50 and $3.46 per watt. Panel wattages range from 350-430 watts.

REC group has a wider selection of solar panels with a range of efficiencies reaching over 22%. REC group solar panels have a nominal power output of 92% or better after 25 years.

REC group also has black panels, which many people like due to it’s visual appeal.

Inverters

Inverters are needed to convert the power coming out of the solar panels into a form that’s usable in your home. The power coming out is in DC but your home uses AC. What exactly that means isn’t important, other than inverters are needed to do that job.

There are a few different setups you could use to wire inverters into your solar system, each with their own costs. String inverters are typically connected to several solar panels at one to convert their power.

String inverters are usually less expensive, but if one fails all of the panels on the string go down as well. This also puts more ware on them.

Micro inverters on the other hand go on each panel. Micro inverters are more expensive but last longer and protect your system when a single inverter fails.

Enphase inverters where the most popular quotes according to Energy Sage in 2022, making up over 50% of quoted inverters.

SolarEdge was the next popular. Combined, these two made up around 90% of quoted inverters.

Labor and Other Costs

There are several other costs to going solar, such as labor and additional parts. These parts include wires, mounting equipment, permits, and so on.

Labor is one of the biggest expenses when going solar. You could cut this cost out by installing solar yourself, however your work will have no liability and nobody to help or fix any issues.

Only install solar yourself if you really know how to do so or have help. A solar installer can also help monitor your system. Install usually only takes a few days when you hire, but if you’re doing it yourself it could take longer.

Your solar installation costs will change depending a number of factors. You may also be able to get certain rebates and incentives to help bring down the cost of your system.

Solar Federal Tax Credit (ITC)

The solar federal tax credit is a dollar for dollar reduction in the amount of federal income tax you owe. There is a lot of misinformation about the solar tax credit, but basically all you need to know is that it can help bring down the cost to go solar by 30% through tax incentives.

Keep in mind however that this is a tax credit, not a rebate. That means you’ll get the tax credit as a reduction in the amount of federal income you owe, rather than as a check that goes into your pocket.

In order to get the credit you must be purchasing a solar system. Leases will not qualify. Your home must also be connected to the electric grid. You can also apply it to a battery system.

This tax credit is one of the largest discounts you’ll get.

If your tax liability is low, you can roll any unused dollars over the the following years. The tax credit is set to drop to 26% in 2033, then 22% in 2034, and expire in 2035.

The second reason many people choose to not go solar is not qualifying for the solar tax credit and being left with unfavorable purchase option. More on this in a moment.

Some states and utility providers have additional incentives. You can learn more about state incentives below:

Going Solar In Texas

Net Metering and Battery Storage

One last thing to consider is net metering and energy storage. You may not need energy storage if you have met metering. It all depends on your goals.

Net metering is where the utility company will store energy for you. If you generate more electricity than you need, the utility company will save it as a credit. Then, when your system doesn’t generate enough electric to meet your needs, you can pull from those credits instead of having to purchase electricity from the electric grid.

If your goal is to save money, net metering will help that, but not all areas provide it. If your goal to have power during outages, you’ll need a battery system.

The cost for battery storage in 2022 was about $1300 per kWh and most systems were about 10 kWh across many of the top storage states. This equals about $13,000 in additional expenses for battery storage.

Enphase and Tesla are the most popular storage options while Homegrid Energy is by far the least expensive. With the 30% federal tax credit, you’d only pay $9100 for such a system, a savings of nearly $4000.

Step 5: Solar Payback Period, Total Savings, and Payment Options

The average payback for going solar is usually around 8 years, but could be a couple of years higher or lower. You can add up 12 months worth of bills to figure out how much solar can save you in a single year to get a better idea of how much you can save. The amount you can save is also influenced by your payment structure.

There are three mains ways to purchase solar panels, which are cash, loans, and leases.

Paying For Solar with Cash

Paying for a solar installation with cash is the least expensive option in the long run, but you need to have the money upfront. Under this option, you’ll save on your electric bill starting from day 1 by the amount solar is offsetting.

So if solar covers your entire system needs, you will save 100% of the amount of money you spend on your electric bill each month.

You can take the total cost you paid to have your system installed and divide it by the cost of electricity for a year to figure out how many years it will take to see a return on investment.

The value of your installation can be added into your home. In fact, homes with solar are worth on average 4% more than homes without solar. Over 25 years, you may save somewhere around $50,000 when purchasing the system with cash.

Paying For Solar with a Solar Loan

Paying for solar with a solar loan is the most popular payment option for going solar. Here, just like any other loan, you’ll borrow money with interest to pay for your system. There are sometimes options available for 0 interest loans, but these typically include faster pay-back periods.

Under a solar loan, your solar provider will design your solar installation and payment so that the amount you pay each month is equal to or less than what you pay on your electric bill. This manes if you can afford your electric bill, you can afford solar.

The amount you save at first may be small, as you still need to make a monthly payment, only it will be to for the solar loan instead of for electricity. Under a financed system you can expect to save about $35000. Here to your solar installation will increase the value of your home. If you are to ever move, you can simply pay off the system and transfer ownership on closing to the new owner.

Paying For Solar with a Solar Lease

A solar lease is essentially where you rent your roof space to a solar company with a long term contract. The solar company owns the solar panels and all equipment, so they will keep most of the electricity generated.

For this reason, the average amount you will save each month is much less then cash or financing. The trade off is you won’t save as much with a lease but don’t need to spend much upfront.

For a number of reasons, this option is the least recommended because it involves being locked into long term contracts and the solar installation will not increase your property value.

You may save around $10,000 over 25 years if you lease a system.

A third reason for not going solar could be not finding the right financing options or not having proper ownership in your home. In that case, you may want to check out community solar.

Again, if you want to have more specific information for your home, check out our recommended providers in the description.

Step 6: Other Considerations For Going Solar

There are a few other things you may want to consider before going solar. Going solar through a reputable solar provider can help you with many of these considerations. These include:

Monitoring Systems
Warranties on Work
Maintenance
Solar Provider Reputation
Insurance and HOA’s

You may want to consider getting a monitoring system on your solar installation to detect any issues. A monitoring system may also be able to show you if you need any maintenance, which you really shouldn’t need much of.

If you do decide to go solar, make sure all details and warranties are detailed in your contract including a warranty on work done. Also, make sure your provider has good reputation. You should also get multiple quotes to find the most competitive pricing.

Your solar installation shouldn’t be down for too long after heavy snow and may need to be rinsed off from time to time to remove dust and dirt.

Don’t forget to check with your home insurance provider, as well as if your area has any restrictions in terms of permits and HOAs.

Step 7: Find Solar Panel Installation Companies Near Me

If you want access to solar providers in your area who have been vetted, check out our recommended solar providers. I suggest getting multiple quotes for a few reasons.

First, getting multiple quotes allows you to compare offers and get the most competitive offer. Second, many providers only carry 1-2 types of solar panels and only offer financing through 1-2 loans.

Last, multiple offers allows you to select a company that has the best history and customer satisfaction.