How Much Does Solar Cost?

Why the Cost of Solar Varies

One of the most common questions we get asked is how much does solar cost? A person might say, “My house is 2,000 square feet, how much will installing solar panels cost?” or, “What does someone typically pay for solar?”  Sometimes we even get asked about a specific solar panel cost.  The answer is not so simple.  The cost of residential solar in San Diego varies not only from solar company to solar company but also from customer to customer.  Solar energy systems need to be sized to each individual household.  If a contractor is willing to give you a solar quote without looking at your home’s electrical usage, run the other direction.  Quality of components, quality and education of the crew installing solar panels, the longevity of the companies backing the warranty all contribute to the cost.

Four Cost Considerations

What are the costs of going solar?

System Size

Energy usage and your electricity bills

Your solar power system size is the first factor considered in determining solar panel system cost. Solar panels cost more than any other elements of a solar systems (inverters are the 2nd highest in all solar cost) – the larger the system, the more the solar installation costs.  Historical energy consumption comes into play in this determination. Our Solar Energy Consultants look at a typical year of usage so they can know how much electricity is used over the entire course of a year, not just certain months. While home size does affect usage, there’s more to it than X amount of square feet equals Y kWh of electricity when determining the total output needed for your solar installation.  In other words, you should install solar panels in no greater amount than is absolutely needed to meet your needs.

By understanding your historical energy consumption, our consultants can design a solar power system that will produce enough electricity to cover the power demands of your home over the course of a year. They’ll also plan ahead by addressing future plans or lifestyle choices that may affect your home energy consumption in coming years. Our consultants will ask questions such as, “Do you run your air conditioning as often as you’d like?” Are you considering an electric vehicle?” or “Are your kids moving out in the near future?” All of these can contribute to the overall size of the system (how many panels you need and what efficiency), and thus the solar system cost. 

For example, if you tell us that you use your AC a bit but not as much as you’d like, our consultants can estimate how much more electricity that extra AC use will consume. The same principle applies to other high-demand appliances, such as pool pumps, EV chargers, hot tubs, solar pool heating, solar water heating, etc... Maybe you already have another type of renewable energy aside from solar pv (pv stands for solar PhotoVoltaic) like a fuel cell power plant or wind turbine on your roof.  Your energy usage determines the needed output of your solar panel system.

Our consultants design custom solar systems that are intended to meet our customers’ energy needs for the next 25 years. Understanding your past electricity usage and future plans for power is critical when trying to keep the cost of your solar panel system to a minimum and making sure you capture the right amount of savings through net metering and any other type of feed-in tariff, solar incentive or solar rebate.

Roof orientation for solar panels

Once it’s determined how much electricity you’ll need your solar power system to generate, the next factor considered is design. Design is critically important, it will determine the levelized cost of solar electric energy for the lifetime of your system – basically what your return on investment will be.  Sized too big, sized too small.  Wrong angle, wrong direction.  Wrong components… can all have either a positive or negative impact.  We’ll explore how your solar panels can be arranged on your home’s rooftop to achieve your electricity demands. 

Direction plays an important part in optimizing your system by the amount of energy that is captured from the sun's rays. South is the ideal orientation for your rooftop. A south-facing panel orientation exposes your panels to as much sunlight as possible.  Consider that in Southern California, the sun is briefly (nearly) directly overhead in summer, but the rest of the year it stays in the Southern sky.  Because of this, solar electricity from the sun will hit the individual solar cells with the most intensity when panels are facing South.  Panels facing North, especially on a steeply sloped roof, could get no direct sunlight for most of the year.  There are situations where panels cannot be installed on a south facing roof due to space limitations and other factors – we’ll go into this deeper below.

Total available roof space is also important. Your home may have a great south-facing roof, but if the available space is too small to hold the needed solar panels to install the system you need, then a large enough system may not be feasible. This is where the quality and efficiency of the solar panels used comes into play. Lower-quality panels often offered by big-name national solar companies are typically low- wattage, which means you’ll need a lot of them. Baker carries both the larges (less cost) and smaller (more cost) solar panel types.  It is not recommended to use solar shingles (a solar roof) as the technology has not been around long enough to be reliable. 

There is another option for people with enough space, it’s called a ground-mount.  It is a system where the racking system that holds the solar cells and inverters is placed on the ground or side of a hill.  In this case, the racking system can be oriented for maximum solar photovoltaic exposure to the sun – South facing, perfect angle, away from shade…  This is usually the best option when the homeowner’s rooftop is not optimal for solar panels.  Ground mounts are still grid-tied solar, the same as a rooftop solar project, including the same solar incentives, net metering and solar rebates.  Ground mounted systems do not work well for a solar pool heater or solar water heater due to the power needed to pump the water through pipes.

 

Solar Products Used

Solar array generation demands, roof orientation, and available space help determine the solar panels to be used on your home. The wattage output of solar panels varies widely along a spectrum, ranging from around 200 watts to 350 watts. As you’ve probably guessed, the price of these panels varies greatly, too.

Not all solar panels are created equally. Solar panels are manufactured differently and offer different warranties. Again, Baker offers a variety of solar panel makes and models to match all kinds of solar projects.

Another product that is often overlooked by homeowners but can ultimately cost you thousands of dollars in damage are the roof mounting components. There are cheap, single-flashed roof mount products and then there's Quick Mount PV. Baker chooses Quick Mount PV as its roof mount vendor because their products are the best. They are more expensive than the other cheap brands, but we wouldn't put our name behind anything less.  Baker is not going to install a cheap roof mounting system because, frankly, we don’t want to come back out to your house in 6 months to fix a roof leak. Check out this blog post that gives a more in-depth comparison between what Baker uses and what the competition uses.

 

Solar Company Labor

Like all businesses, solar energy providers carry operating costs that are built into the price homeowners pay for a solar panel installation. Homeowners buy not only the product to be installed on their roof – the solar panels, mounting equipment, racking, microinverters, etc. – but also the labor involved in having that system designed, appropriately permitted, and correctly installed.

Some solar companies subcontract their solar installation crews. Other companies, like Baker, use skilled union electricians.  The difference between union electricians and unskilled labor shows in the difference in quality.  A union electrician is capable of tackling nearly any electrical issue on your entire property, this prepares the worker to deal with any unforeseen issue that might arise during the installation.

 

Financing options

Lease, PPA, Loan, or Purchase?

How you choose to pay for your solar installation is also a big factor in establishing the cost of your solar system. Not all solar companies provide options. At Baker, we make it easy to switch to solar, including how you pay for it. 

When you lease residential solar panels, you see immediate savings with no upfront costs and monthly payments typically 25% to 35% less than your current average electric bill (assuming the system you select offsets 100% of that bill). If you choose to lease equipment, you can expect that over time you’ll pay more for your solar panel system than you would have if you had purchased your system, but much less than if you stuck it out with the utility company. 

You also have the option to own your system through one of our loan options or by purchasing it outright. Whether you purchase or finance a solar panel system, you can elect to use the federal government’s solar Investment Tax Credit. Many customers who take advantage of the federal solar tax credit realize a return on their solar investment within about 5 to 7 years. The benefits of no-strings-attached ownership of a solar panel system for your home include a manufacturer’s performance guarantee and our Baker 25-year workmanship warranty. Panels are typically warrantied for 20 to 25 years of the estimated 35 to 40-year lifespan of a solar system.

HERO Financing: Special financing for select Southern California homeowners

Designed to provide low-interest rate financing that can reduce utility costs and boost local economies, the Home Energy Renovation Opportunity, or HERO, financing program offers homeowners interested in solar power a way to make that a reality. Qualifying for HERO financing requires no minimum credit scores, no income barriers, and no personal guarantee. HERO financing is available for a range of home energy and water-efficient products and renewable energy systems, including solar panels and microinverters. Under the HERO program, qualified homeowners can make payments toward a solar panel system with their property taxes and combine the utility savings that the financing option provides with the 30% federal solar Investment Tax Credit for solar panel installation. Learn more about the HERO financing option.

 

Why Choose Baker?

Baker Electric has been serving Southern California since 1938 and have since installed over 9,000 residential solar systems.  Different solar contractors have different approaches and business models for installing solar projects.  Some focus only on low cost and no up-front cost, others sell only one brand of panel in order to receive discounts from the manufacturer.  Baker focuses primarily on quality and customer support.  This means we are not the cheapest, but when installing a $20,000 - $30,000 investment on the roof of your home, quality is more important than saving a few hundred dollars or receiving a free iPad. 

So if you are one of the people wondering how much does an individual solar panel cost, or the difference between solar PV (PhotoVoltaic, or solar electric) vs a solar water heater or solar pool heater – it simply means you are in the beginning stages of researching.  Soon you’ll not only understand how solar works and what is baked into installation costs, but you’ll know about solar rebates, net metering and solar incentives.  Whatever you do, do not move forward with solar until you feel you can make an educated decision because not all solar contractors are the same.  Do your research.  Google everything.  Ask your friends and neighbors.  Get estimates from multiple contractors.  It will pay off in the end. 

If you want a head start on your research, please give us a call, we’re happy to answer all your questions even if you are not ready to move forward!