Why Are Solar Panels so Expensive? (And tips to reduce your costs!)

Why Are Solar Panels so Expensive
Solar Panels

Installing solar panels and going green is a noble goal for most people, but the cost of this project can be overwhelming and discouraging.

Whenever you want to switch to solar energy, you no doubt wonder why solar panels are so expensive. Going solar can be expensive or even make you think it’s impossible to go fully solar. Solar panels are costly because of the equipment cost. In addition, there are other costs, including safe and compliant professional installation and compliance with manufacturer warranties and local codes.

Other concerns running through your mind could include questions such as

  •  Is investing in solar panels worth it for your home?
  • What are the true costs of solar panels?
  • How are the costs charged over time?
  • How can I reduce the cost of installing solar panels?

Read through this article to find the answers to these questions and more.

What Is The Cost Of a Solar System?

There is no sugarcoating it: solar panels are expensive. The average home requiring 6 kW will spend between $10,000 and $30,000 to install solar panels. So, what inflates solar costs so much?

Solar panels are expensive because of two things:

  • Equipment costs: Manufacturing solar panels require advanced and expensive equipment and raw materials like lithium for solar batteries and silicon for high-grade solar panels.
  • Soft costs: Soft costs include a safe, professional installation that considers local codes and manufacturer’s instructions.

This is a brief analysis of solar costs. The longer version entails several factors contributing to solar panel costs. An in-depth analysis of data on solar panel costs shows that purchase and installation prices vary depending on the type of panels, the roof type, the location, the size of the number of panels on the roof, the brand choice, etc.

Let’s dive into the details that make solar panels so expensive.

Manufacturing Costs

Manufacturers use different materials taken through expensive processes to make solar panels. Photovoltaic solar panels require silicon cells to produce electricity when sunlight interacts with the cells.

Here is an estimate of silicon cells depending on the structure:

  • Monocrystalline: This type of solar panel costs between $1 and $1.5 per r watt to manufacture. Manufacturers use a single silicon block to form monocrystalline wafers. They are expensive because they are labor-intensive to produce.
  • Polycrystalline: Polycrystalline manufacturing costs range from $0.7 to $1 per watt. They are less efficient than the monocrystalline panels, thus, less expensive.
  • Amorphous silicon cells: These cells are used in manufacturing thin-film solar panels, costing between $1 and $1.5 per watt. They are often attached to glass, plastic, or metal and are bendable to fit different roof types.

However, solar panels are more than silicon cells. The cells need meta casing and wiring where electrons carrying power can pass through.

The common material used to manufacture solar panels is silver, serving as electrodes. Silver is expensive despite efforts to minimize its usage in solar manufacturing.

Many manufacturers turn to steel because of its rigidity and favorable prices. But you also need magnesium or aluminium to protect the frame from weather elements.

Another thing that makes solar panels expensive is the inverters needed to convert DC to AC, used at home to run appliances. And if you want to go off-grid, you will need a solar panel battery system to store energy.

These costs make the manufacturing cost the best part of the solar panel price.

Installation Costs

After buying solar panels, the next cost is installation. Getting experienced and qualified solar panel installers are key to the project’s success, but it can be expensive.

The labor costs depend on the size of the system, transportation, and tools used. You could also factor in the cost of hiring electricians to help with sub-panel installation.

Installer labor costs could range between $10 to $3,000 for each worker, depending on how you want to install the panels. For instance, the cost of installing fixed panels is different from the cost of installing adjustable and motorized tracking solar panels.

Here are the estimated costs of different solar tracking and mounting options:

  • Fixed solar panels: Installing fixed mounts could cost between $10 and $15 per panel. Since they are stationary panels, they are cheaper to install. They are also ideal for places with continuous sunlight.
  • Adjustable solar panels: These solar panel mounts cost approximately $50 per panel to install. They tilt the solar panels according to the intensity and direction of the sun, thus increasing energy production.
  •  Motorized tracking mounts: The costs of installing motorized tracking systems range from $500 to $3,000 per panel because it is more complex than the other types. They follow the arch of the sun, thus providing maximum efficiency. You can increase your energy production by 45% with motorized tracking mounts, justifying the cost.

Permit Costs

Most states charge permit fees to give you the green light to install solar systems in your home. The fees come in the form of inspection and permit fees. They are often 3% of your overall budget but differ from one state to another.

By now, you may be shocked by how expensive solar panels are, but this cost is even lower than it used to be.

Solar Panels Cost Less Than Before

Data from the Solar Energy Industries Association (SEIA) shows that cost of installing solar systems fell by 70% during the 2010s. If we examine the last years of that decade, it is clear that solar panel costs have dropped by 37%.

It means that if the average home consuming 6kW spends $17,700 currently on solar panels, they would spend $28,095 in 2015 and $59,000 in 2010 on a similar installation!

Here is our observation of solar panel cost trends:

  • A price drop has changed households’ solar cost-benefit equation.
  • For most states, the solar payback period has been reduced to 4-9 years.
  • Since 2020, solar panel costs have flatlined due to supply chain constraints and rising commodity.
  • It is highly unlikely that solar panel prices will continue to drop as the industry matures.
Why Are Solar Panels so Expensive
A Technician Installing Solar Panels On House

How Can You Reduce Solar Panel Installation Costs?

Installation costs and other contractor expenses are the second largest cost of your solar panel system. However, you can minimize this cost by taking the following steps:

1- Compare Different Quotes

Don’t fall for the first installation price and quote you meet online. It is wise to compare quotes from multiple contractors in your region. You could get a better deal from a friend’s recommendation, so ask and shop around for the best price.

Some companies may offer you an all-in-one pricing solution that includes everything from the cost of the panels to installation. Although such companies offer convenience, they often charge a premium price.

You will probably save money by purchasing the equipment separately and then hiring a qualified contractor to install it. Independent contractors will likely charge $1 per watt, which is lower than $3.5 for all-in-one installation.

However, ensure you check the installer’s reviews or past projects.

2- Consider DIY Installation

If you can install the solar panels yourself, you will considerably reduce the installation cost of your solar systems. You can learn how to do so through YouTube videos and blog posts providing step-by-step guidelines on installing solar panels on your roof.

Because of the complexity, weight, bulkiness, and nature of various panels, you may require skills and expertise. You will need to solicit help from friends to help you raise to take the panels to the roof.

The DIY installation will take more time than a professional would have taken. You should also be good with making electrical connections, taking measurements, and acquiring permits.

3- Take Advantage Of The Federal Tax Credit

The federal government provide up to 30% tax credit for new solar panel installations. This credit will considerably reduce installation costs, making what could have been expensive cheap.

Fortunately, this provision is available for anyone who pays taxes.

Additionally, you could search for utility and state incentives locally available in your area. Some of these incentives are worth thousands of dollars, which could reduce the total cost of your solar system.

How Much Will It Cost You To Maintain Your Residential Solar System?

Solar system costs are not a one-off affair. You will still incur maintenance costs as components get damaged, wear out, and become obsolete.

While the solar company covers the warranty claim, upkeep cost is solely your responsibility. You can hire an inspection company at approximately $150 for the annual checkup.

If you include professional cleaning services, you will pay between $10 and $20 per panel. Repair and equipment costs for a home with 10 panels range from $250 to $350 annually to ensure your system produces optimally. Of course, the costs will increase with more solar panels.

But if you have the right solar cleaning equipment and the skills, you can clean your own solar panels instead of hiring professional cleaners.

Is Going Solar Worth The Cost?

Going solar is worth the cost if you live in a location with high energy rates and a suitable solar score. (A solar rating above 60 is perfect for solar power potential). In addition, if you can afford the initial investment, installing solar panels on your home can increase your home value while you also enjoy a 30% tax break. 

Wrapping Up

From the above discussion, we have established that solar panels are expensive. A typical home with a 6kW system will cost approximately $17,700 before tax credits and incentives to install.

However, solar panels have lots of benefits, including

  • Becoming energy-independent,
  • Environmentally-friendly,
  • Increasing home value,
  •  Reducing electricity bills.

Yes, the initial cost is high, but solar panels pay off that cost in the long run, leading to a positive return on investment. Therefore, solar panel investment is worth every penny.


Hello friends, I am Altiné. I am SO excited you are here! I am the guy behind Solarixis.com. I am passionate about all things outdoors, running, reading, and self-reliance. I hope you find what you are looking for while visiting Solarixis.com.

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