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Porcupine caribou in the Arctic National Wildlife Refuge. Gary Braasch / NWFblogs

The Interior Department launched its official review of oil and gas leasing in the Arctic National Wildlife Refuge (ANWR), the agency announced Tuesday.

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More than 200 million Americans may be drinking PFAS-contaminated water, research suggests. vitapix / Getty Images

By Lynne Peeples

Editor's note: This story is part of a nine-month investigation of drinking water contamination across the U.S. The series is supported by funding from the Park Foundation and Water Foundation. Read the launch story, “Thirsting for Solutions," here.

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Solar Energy Pros and Cons: Is Going Solar Right for You?

Weighing the pros and cons of solar can help you make the best decision for your home.

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Lourdes Balduque / Moment / Getty Images

The solar boom is underway; the best solar companies are becoming household names, and the benefits of solar energy are taking the spotlight from oil, coal and gas. However, with so much literature to sort through these days, it can be tough to gauge the real solar energy pros and cons — especially since they're so dependent on the customer.

Though a sound investment, solar is a significant one, and we want our readers to fully understand the advantages and disadvantages of solar energy before making a purchase. Of course, using the sun as a renewable energy source can reduce your household's monthly electric bills and minimize your carbon footprint. However, there are some factors that make solar a little less valuable for some than others.

We'll go over the full pros and cons of solar energy in this article, but for many homeowners, the decision to go solar comes down to cost. To see how much solar panels would cost for your home, you can get a free quote from an installer near your by using this tool or filling out the form below.

Pros and Cons of Solar Energy: What You Need to Know

By installing a home solar system, you can use photovoltaic solar cells to capture and convert the sun's clean energy into electricity that can power your home or business. This can partially or completely offset the energy you'd typically purchase from your utility company.

While the advantages of solar energy are well advertised, there are also some drawbacks our readers should be aware of. Consider the following pros and cons of solar energy to help you decide if solar panels are worth it for your home.

Benefits of Solar Energy

Let's begin with the fun part — the biggest advantages of solar energy.

1) You can significantly reduce or even eliminate your household electric bills.

One of the most significant benefits of solar energy is also the most obvious: by generating your own energy, you can partially or completely offset the electricity you purchase from your utility. The average solar system lasts for two to three decades, which means most residents enjoy at least a decade or two of free energy after paying off their system with their energy savings and tax credit.

2) Going solar can reduce your carbon emissions.

The clean and natural energy harnessed by your solar system offsets the energy you'd typically purchase from local utilities. For the most part, local utilities carry a large impact stemming from the generation, transportation and distribution of electricity to your community. By using solar panels to generate your own electricity, you offset a portion of the greenhouse gases associated with fossil fuels, lowering your community's overall environmental impact.

3) Investing in a solar power system can increase the value of your home.

Homes with solar are becoming considerably more appealing, and installing the best solar panels can raise an estate's resale value by a decent amount. Note that this helps offset one of the primary cons of solar energy, which is the steep startup cost of solar panels — but more on that later.

4) Going solar can make you eligible for rebates and tax incentives.

Over the past couple of decades, the federal government has implemented numerous plans to incentivize solar energy, including solar tax credits and rebates. Many state governments have followed suit, particularly those where sun exposure is most consistent. Thanks to this, there are some significant ways to recoup part of your solar investment almost immediately. Again, this can help offset the initial cost of your solar panel system, allowing you to generate savings even before those utility reductions begin to stack up.

5) Solar + storage provides reliable backup power.

A solar battery storage system can provide backup power for homes in areas prone to power outages, which seem to be growing each year with the extreme weather brought on by climate change. With a backup battery like a Tesla Powerwall, you can keep your essential appliances powered during a prolonged outage. Even in mild weather, backup batteries let you store and use more of your solar energy, generating more savings.

Disadvantages of Solar Energy

Unfortunately, there are benefits of solar that won't prove effective for all homes. A few of the most notable disadvantages around solar include:

1) Not every roof can accommodate a solar system.

Solar panel installation requires you to have a certain kind of roof. If you have an older home, especially one with slate or cedar tiles on the roof, then you may not be able to buy solar panels for your personal use. Additionally, homes with skylights and other rooftop features may not have the surface area needed for solar panels.

If you don't have a lot of space or you're unsure about your home's solar capability, contact a local solar installer near you for a consultation. Most top solar companies will send out a representative free of charge.

Keep in mind that you can also install a ground-mounted solar panel system if you don't have a suitable roof.

2) Solar energy can be very location-dependent.

You can have a roof that's ideal for solar panel installation and still not be a good candidate for solar energy. Why? Because to take full advantage of solar power, you need to live in a place that gets consistent daily sun exposure. So, if you live in a part of the country that tends to be pretty cloudy, you may not produce the amount of energy necessary to justify your investment. Also, if your roof is partly shaded by trees or by neighboring homes, you may not get the best mileage from a solar energy system.

Location goes beyond just the amount of sunlight you receive, however. Some readers may live within the jurisdiction of a utility company without a favorable net metering policy. In the most unfortunate cases, utilities will charge hefty interconnection fees that can outweigh the savings solar provides.

3) Solar savings tend to correspond with energy bills.

The higher your electricity bills, the more energy you'll be able to offset with solar. But the inverse is also true: if you live somewhere with low utility costs, then the savings from switching to solar energy are going to be more modest. In other words, there are some parts of the country where the financial advantages of solar energy are going to be pronounced, and other places where those financial advantages are going to be nominal. It all depends on the cost of electricity where you live, and how much of it you use.

4) The upfront cost of going solar can be significant.

After adding up panels, labor, inverters and more, the average solar system investment ranges from $10,000 to $20,000. The specific number will vary according to the size of your home, if you need energy storage technology, your household energy use and the type of solar panels you choose. For example, if you make your own DIY solar panels, you'll cut down on installation fees, or if you want to get the most efficient solar panels, they'll cost significantly more.

There are plenty of ways to offset the cost of solar, including tax incentives, utility savings, increased home value and financing options. Still, there's no getting around it: Making the switch to solar is a significant investment.

5) Solar is getting more expensive with supply chain issues.

Worldwide supply chain issues have squeezed the costs of solar materials, shipping and labor. As a result, investing in solar in 2022 is proving a touch costlier than in years past. Still, solar technology itself continues to improve in efficiency and value while declining in price. We wouldn't recommend waiting to install a system, however, as the federal solar tax credit will be reduced in 2023 and will phase out altogether in 2024.

Weighing Solar Energy Pros and Cons

So, do the advantages of solar energy outweigh the disadvantages? Unfortunately, there's no easy answer here, as different homeowners may experience different levels of value when they make the jump to solar.

Before investing in a system, make sure you do your due diligence. Consider local sun exposure, the size and direction of your roof, local tax incentives and your own household energy expenses. Also, think about whether you want (or need) a solar battery.

Getting quotes from a few solar providers can give you more details about how much a new system will cost you. By weighing the pros and cons of solar energy for your home, you can make the best decision possible.

To get connected with a solar installer near you for a free consultation, you can use this tool or fill out the form below.

FAQ: Solar Energy Pros and Cons

When is solar energy a bad choice?

We aren't naive enough to claim that solar is always a good choice. For homeowners with low energy costs, shady roofs or insufficient space, the cost of solar can outweigh its benefits. Your location is important, too — not just in terms of sunshine, but also the financial incentives available to you. Check your local net metering policy and statewide and local incentives to see if you can save money on solar.

What are three disadvantages of solar energy?

The three biggest disadvantages to solar energy include:

  • The long-term nature of the investment: Life happens. Things change. Unfortunately, transferring solar loans or leases over to new homes or homeowners can be tricky. Some solar companies charge to have the panels relocated, and not all new homeowners will accept the solar lease or loan should you wish to transfer it.
  • Not every roof can accommodate a solar system: Small roofs, roofs with obstructions or roofs made with alternative materials can have trouble accommodating solar panels.
  • The cost of solar: Purchasing 25 years' worth of electricity upfront can make a lot of customers uncomfortable — and we understand why! The upfront cost of solar won't be feasible for all homeowners. Luckily, solar leases, flexible loan plans and incentives are making solar accessible to a wider range of home and business owners.

What are the advantages of solar?

Solar panels provide a reliable, low-maintenance way to avoid the carbon dioxide emissions associated with conventional energy generation. In addition to the environmental benefits, solar typically provides a great deal of energy savings for customers weighed down by rising utility costs. When properly designed and installed, solar is one of the best and most sustainable investments you can make.

Karsten Neumeister is a writer and renewable energy specialist with a background in writing and the humanities. Before joining EcoWatch, Karsten worked in the energy sector of New Orleans, focusing on renewable energy policy and technology. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.
President Joe Biden delivers remarks during the virtual Leaders Summit on Climate in Washington, DC, on April 23, 2021. JIM WATSON / AFP via Getty Images

By Jessica Corbett

Climate justice campaigners plan to descend on Washington, DC in October to protest outside the White House for a week straight, calling on President Joe Biden to declare a climate emergency and end all new fossil fuel projects.

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Switzerland's Rhone Glacier protected by white tarps in August of 2020. Bertrand Rindoff Petroff / Getty Images

Usually, humans huddle up in blankets to stay warm in the winter.

For the glaciers of Switzerland, however, the opposite is true. A ski resort in the Swiss Alps is using blankets to protect a glacier from melting in the summer sun.

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There are financial incentives available that make it easier for homeowners to invest in solar energy systems, including a number of solar tax exemptions at the state and local levels. These solar tax exemptions can vary by location and may include relief from sales taxes, property taxes and more.

In this article, we'll discuss which tax exemptions are available to homeowners who invest in renewable energy systems in each state, as well as the federal solar tax credit. Read on to learn more, or fill out the form below to get a free, no-obligation quote from a solar installer near you to see how much can save on a solar panel system.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

Solar Sales Tax Exemptions

Solar sales tax exemptions are a common financial incentive designated by state governments. According to the Solar Energy Industries Association, there are currently 25 states that offer a solar sales tax exemption.

What does this mean, exactly? Most states levy a tax on consumer purchases, which can range from 2.9% to 9.5%. With a solar sales tax exemption, these taxes are waived on purchases of solar panels, solar batteries and other forms of solar equipment. Naturally, this can reduce the total purchasing cost considerably, making a solar investment a bit more affordable.

For example, if your state has a sales tax of 6% and you purchase a solar panel system for $16,000, you'll end up paying $16,960 in total. If your state has a solar sales tax exemption, however, you'll only pay $16,000.

Solar Property Tax Exemptions

The Solar Energy Industries Association notes that 36 states currently offer a property tax exemption for homeowners who install residential solar systems.

Here's what this means: A solar panel installation typically results in a significant increase in your property values. (On average, homeowners see a solar-related property value increase of about 4.1%.) In states that have renewable energy property tax exemptions, homeowners whose property values rise are protected from a comparable increase in property taxes. In other words, the worth of the home goes up, but homeowners do not have to pay anything more come tax time.

Solar Tax Exemptions: State By State Breakdown

Different states have different laws when it comes to sales and property tax exemptions for solar installations. To learn about the tax incentives available in your area, check the table below:

State Solar Property Tax Exemption* Solar Sales Tax Exemption*
Alabama No exemption No exemption
Alaska Local exemptions No sales tax
Arizona 100% exempt 100% exempt
Arkansas No exemption No exemption
California 100% exempt until 1/2/2025 No exemption
Colorado 100% exempt 100% exempt
Connecticut 100% exempt 100% exempt
Delaware No exemption No state sales tax
Florida 100% exempt 100% exempt
Georgia No exemption No exemption
Hawaii 100% NHL only No exemption
Idaho No exemption No exemption
Illinois Special assessment No exemption
Indiana 100% exempt No exemption
Iowa 100% exempt for 5 years 100% exempt
Kansas 100% exempt No exemption
Kentucky No exemption No exemption
Louisiana 100% exempt No exemption
Maine No exemption No exemption
Maryland 100% exempt 100% exempt
Massachusetts 100% exempt for 20 years 100% exempt
Michigan 100% exempt No exemption
Minnesota 100% exempt 100% exempt
Mississippi No exemption No exemption
Missouri 100% exempt No exemption
Montana 100% exempt for 10 years No state sales tax
Nebraska Exemptions only for systems over 100 kW No exemption
Nevada Exemptions only for certain systems over 10 MW No exemption
New Hampshire Local exemptions No state sales tax
New Jersey 100% exempt 100% exempt
New Mexico 100% exempt 100% exempt
New York 100% exempt for 5 years 100% exempt
North Carolina 80% exempt No exemption
North Dakota 100% exempt for 5 years No exemption
Ohio Exemptions in Cincinnati and Cleveland 100% exempt
Oklahoma No exemption No exemption
Oregon 100% exempt No state sales tax
Pennsylvania No exemption No exemption
Rhode Island 100% exempt 100% exempt
South Carolina No exemption No exemption
South Dakota Exemption of either $50,000
or 70% of total property value
No exemption
Tennessee Tax value no more than 12.5% of installed cost 100% exempt
Texas 100% exempt No exemption
Utah No exemption Exemptions only for systems
over 2 MW
Vermont 100% exempt 100% exempt
Virginia Local exemptions No exemption
Washington No exemption Exemptions only for systems
up to 10 kW
Washington DC 100% exempt No exemption
West Virginia No exemption No exemption
Wisconsin 100% exempt 100% exempt
Wyoming No exemption No exemption

*Accurate as of time of publication.

Federal Solar Tax Incentives

In addition to these state-specific incentives, there is also a federal tax incentive that is available to all Americans who invest in solar power. The solar investment tax credit (ITC) is currently valued at 26% of the total solar installation cost, meaning homeowners can essentially deduce 26% of that up-front cost.

This tax credit covers:

  • The cost of solar panels
  • Labor costs for installation
  • Additional solar equipment, like inverters, wiring, etc.
  • Energy storage devices, including solar batteries
  • Sales taxes paid for eligible solar installation expenses (in states that do not have sales tax exemptions)

Note that the federal tax credit is available for all homeowners who purchase a system, whether they buy it outright or finance it with a solar loan, but it is not available to those who lease solar panels.

Frequently Asked Questions: Solar Tax Exemptions

Are solar panels exempt from sales tax?

In states that have a solar sales tax exemption, yes, the purchase of solar panels is shielded from sales tax. Currently, at least 25 states offer a solar sales tax exemption.

Is solar sales tax exempt in Texas?

No, Texas solar incentives do not currently include a sales tax exemption.

Is solar exempt from property taxes?

Currently, there are 36 states that offer solar property tax incentives. Take a look at the chart included above to find out whether your state offers a solar property tax exemption. Some municipalities may have local property tax abatements as well, so property owners considering going solar should check government websites for additional information about incentives and rebates.

Are solar roofs tax deductible?

Your solar roof shingles can be claimed via the federal solar investment tax credit, allowing you to deduct 26% of your total clean energy system costs.

Do solar panels decrease property taxes?

Solar projects usually increase residential property values, which in some states may actually mean an increase in property taxes. However, in the 36 states that offer a solar property tax exemption, an increase in home values does not result in an increase in property taxes.

IEN organizers wrote "Expect Us" on the statue of Andrew Jackson in front of the White House on Oct. 11, 2021. Indigenous Environmental Network

By Jake Johnson

On the heels of President Joe Biden's proclamation formally marking Indigenous Peoples' Day, a coalition of Indigenous and environmental leaders on Sunday delivered a blunt message to the White House: "We don't need performative proclamations, our communities are dying."

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Cost of Solar Panels in 2022: What to Expect

How much do solar panels cost? Let's take a look.

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Elenathewise / iStock / Getty Images

Switching to solar power is a proven method for reducing your environmental footprint, energy burden and reliance on traditional utility companies. However, even though the cost of solar has dropped 80% in the last decade, the upfront cost of solar panels is still significant. When selecting the best solar company for your home installation, price is one of the largest factors.

But what is the average cost to install a solar energy system? What are some of the factors that can impact pricing? How much would it cost me, specifically? In this article, we'll answer questions like these with the goal of helping you make a fully informed, responsible decision about a solar energy investment for your home or business.

If you're looking to work with a solar installer, we recommend getting quotes from a variety of providers. Use this tool to get matched up with local solar companies in your area, or fill out the form below.

What Determines the Cost of Solar Panels?

There are a few key factors that lead to variation in solar system installation costs. Understanding these can help you decide whether solar panels are worth it for your home. Let's take a look at them in more detail.

1. System Size Needs

The size of your residential solar system will depend primarily on your energy needs. You can roughly estimate how many solar panels you'll need based on past utility bills, your available roof space and the amount of sunlight in your area, but to get an accurate system size, you'll need a consultation with a local solar installer.

Your installer will evaluate your home energy needs based on irradiance maps, energy bills, satellite imagery of your roof, your utility company and more. It can then recommend a custom solar panel system size to accommodate your energy needs. The larger the system, the more expensive it will be.

2. Type of Solar Panels and Other Equipment Costs

There are three basic types of solar panels, two of which are commonly used residentially: monocrystalline and polycrystalline panels. Monocrystalline panels tend to be more energy-efficient, which can lead to greater savings in the long run, but they're also a bit pricier on the front end.

That being said, solar panel efficiency is the name of the game for most homeowners who aim to install a system on their roof, as they'll likely have less space to work with than commercial solar projects or ground-mounted solar panel systems will.

Other components you may need to purchase include inverters, wiring, charge controllers, mounts, solar batteries and more. Consider how much backup power is a priority for your home – backup batteries will add some costs on the front end, but additional safety and savings on the back.

3. Geographic Location

Another factor that can have a big impact on solar pricing? Where you live. Unsurprisingly, solar installation tends to be most cost-effective in parts of the country that get a lot of sun exposure, and therefore more energy to convert into electricity. This basically means that solar panels will operate more efficiently and, in many cases, means that you'll need fewer panels overall to power your home.

Those who live in states like California, Florida and Arizona — or really any areas of the Sun Belt or Southwest — will likely get the most out of their home solar power systems. Other factors like the direction of your home and how much shade your house gets will also impact your home's sun exposure, and therefore the efficiency of your system. Also, keep in mind that the further your company is from your home, the more expensive the overall installation will be.

4. Solar Incentives

Both state and federal governments have established incentive programs to encourage homeowners to buy solar panels. There is currently a 26% federal solar tax credit, called an Investment Tax Credit (ITC), available for homeowners who install residential solar panels between 2020 and 2022. It is scheduled to reduce to 22% in 2023 and may not be extended thereafter.

Your solar system cost will also depend on the net metering policy of your local utility company. Most utilities vary in their buyback rates and feed-in tariffs, but policies can have a big effect on the overall value from your solar system and your solar payback period. Be sure to ask your solar installation company about how cooperative your utility provider is with solar energy installations.

Some states offer better solar incentives, rebates and solar tax exemptions than others, and most solar panel installers should help you identify and apply for the programs in your area. However, it's still a good idea to familiarize yourself with the local incentives that might be available to you.

5. Additional Factors of Solar Panel Installation Cost

There are plenty of other factors that can impact solar panel installation costs. These include (but are not limited to):

  • The availability of solar panels in your area
  • Your current electricity bill
  • The current cost of shipping
  • The number of providers competing for your business
  • Supply chain issues
  • Local electricity rates

The bottom line? You can learn the most by shopping around. Get a few different proposals from local companies, evaluate what services you might be interested in and ask about sales or specials. Familiarize yourself with the best brands of affordable solar panels if budget is your priority.

How Much Do Solar Panels Cost to Install?

To answer this question, let's take a look at the basic price range for solar panel installations. According to a recent report from the Solar Energy Industries Association, in the first quarter of 2021, the national average cost of a residential solar system was $2.94 per watt. To put this in perspective, this means that after the federal tax credit is applied, a 5-kW system would cost $10,878 and a 10-kW system would cost $21,756. An average residential solar system would sit somewhere between those figures.

The exact price you'll pay for solar panels will depend on a number of factors and is best found by getting free quotes from local solar companies near you.

Next, you might rightly wonder: What exactly am I paying for? The solar panels themselves usually make up just about a quarter of the total system cost. Remaining expenses include labor costs, solar maintenance and additional parts and equipment (such as inverters, racking, wiring, electric vehicle chargers or batteries).

Cost of Solar Panels by State

One of the broadest ways to gauge the overall cost of solar is by looking at the average price of solar panels by state. Our statewide average prices are calculated using market research and data from top brands. These prices can help convey a better understanding of what solar might cost in your area:

Average Cost of Solar By State

Average Cost of Solar Per Watt

Average Cost of a 5kW System After Tax Credit

Alabama

$2.45

$9,065

Alaska

$2.41

$8,917

Arizona

$2.61

$9,657

Arkansas

$2.54

$9,386

California

$2.73

$10,101

Colorado

$2.69

$9,965

Connecticut

$2.80

$10,360

Delaware

$2.58

$9,546

Washington, DC

$3.16

$11,704

Florida

$2.53

$9,361

Georgia

$2.55

$9,423

Hawaii

$2.67

$9,879

Idaho

$2.60

$9,608

Illinois

$2.73

$10,113

Indiana

$2.68

$9,916

Iowa

$2.77

$10,237

Kansas

$2.59

$9,571

Kentucky

$2.34

$8,658

Louisiana

$2.57

$9,521

Maine

$2.83

$10,483

Maryland

$2.77

$10,261

Massachusetts

$2.94

$10,878

Michigan

$2.81

$10,409

Minnesota

$2.84

$10,508

Mississippi

$2.64

$9,768

Missouri

$2.59

$9,583

Montana

$2.54

$9,386

Nebraska

$2.83

$10,471

Nevada

$2.52

$9,324

New Hampshire

$2.91

$10,767

New Jersey

$2.77

$10,249

New Mexico

$2.68

$9,904

New York

$2.95

$10,927

North Carolina

$2.54

$9,398

North Dakota

$2.42

$8,954

Ohio

$2.56

$9,460

Oklahoma

$2.62

$9,694

Oregon

$2.60

$9,632

Pennsylvania

$2.55

$9,447

Rhode Island

$2.84

$10,508

South Carolina

$2.72

$10,076

South Dakota

$2.39

$8,843

Tennessee

$2.49

$9,213

Texas

$2.69

$9,953

Utah

$2.68

$9,904

Vermont

$2.87

$10,619

Virginia

$2.75

$10,163

Washington

$2.69

$9,965

West Virginia

$2.64

$9,768

Wisconsin

$2.60

$9,620

Wyoming

$2.57

$9,509

Keep in mind that 5kW is a baseline size and near the smaller end of most solar panel installations. Use this figure as a minimum.

How to Pay For a Solar Panel Installation

Different solar installers may offer different financing plans, allowing you some flexibility. With that said, there are three standard options for paying for your solar energy system:

  1. Purchase your solar energy system outright (that is, pay in cash).
  2. Take out a solar loan to purchase the system, then pay it back with interest.
  3. Lease your solar system; you will pay less month to month but won't actually own the system yourself.

Our solar financing guide breaks down each of these options to help you make the decision that best fits your needs.

Cost of Solar Panel Maintenance

In general, solar systems are designed to run smoothly for decades without requiring much maintenance or upkeep. However, even the best systems require routine solar panel cleaning and checkups as grime, dirt and debris can accumulate over the solar cells.

Any sizable costs associated with malfunctioning panels should be covered by your panels' warranty, but it's not a bad idea to factor in the costs of a simple few cleanings and occasional maintenance.

How to Find the Lowest-Cost Solar Panels

Again, the best way to assess the cost of solar is to get a quote from a certified installer near you. In addition to receiving an installation price, you can learn your estimated 25-year energy costs, how compatible your home is for solar and even compare quotes to find the best offer. The simple process of getting quotes from multiple providers can save you thousands in the long run. You can use this tool to receive free quotes from local solar providers, or fill out the form below to get started.

Make the Best Choice About Solar Energy

Solar energy is not right for every homeowner, nor for every home. With that said, many homeowners will find that the total cost of solar is more than offset by long-term, recurring energy savings that provide a sizable return on investment. Make sure you factor in cost, energy needs, tax incentives, home value and more as you seek to make a fully informed decision about whether to make the switch to renewable energy with solar.

FAQ: Cost of Solar Panels

As you continue to weigh the pros and cons of solar energy, it's natural to have a few questions. The best way to resolve these is to set up a solar consultation with a local expert, but in the meantime, here are a few general answers to some of the most common solar inquiries.

How will solar energy impact my property values?

Your solar energy system is an asset just like any other, and when installed on your home, solar increases your property value accordingly. In fact, the U.S. Department of Energy has reported buyers are willing to pay an average premium of about $15,000 for a home with a solar panel system.

With that said, you are only going to see your property values go up if you own your solar system outright, as opposed to leasing it. The cost of electricity in your area as well as the net metering policy of your local utility will also impact the overall value of your solar energy system.

Which is better, buying or leasing my solar system?

It all depends on your motivation for going solar. If you want to maximize long-term savings and increase the value of your home, then purchasing your solar system is best. However, if you just want a low-maintenance way to reduce monthly energy costs and practice environmental stewardship, then a solar lease might be a better option.

Also, note that leasing can be a good option for those who might plan on selling their home in the short term. Leasing panels does not make you eligible for the solar tax credit.

How long will my solar energy system last?

Solar systems are designed to be exceptionally durable. With just the most basic upkeep, most solar energy systems should continue to work and produce power for anywhere from 25 to 35 years. Standard warranties for panels typically last around 25 years.

Karsten Neumeister is a writer and renewable energy specialist with a background in writing and the humanities. Before joining EcoWatch, Karsten worked in the energy sector of New Orleans, focusing on renewable energy policy and technology. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.

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Permafrost is thawing across the Arctic, releasing microbes and organic materials that have been trapped in the frozen ground for thousands of years. NOAA / Wikimedia Commons

By Jessie Creamean and Thomas Hill

The Research Brief is a short take about interesting academic work.

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sl-f / iStock / Getty Images

Before installing a residential solar system, you may stop to wonder: Do solar panels increase home value? It turns out, the answer is a resounding yes.

In this article, we'll go over how much solar panels can increase the value of your home, as well as how that increased value affects property taxes and whether buyers are really looking for homes with solar energy systems. With this knowledge, you can make an informed decision about whether solar panels are a good investment for your home.

How Much Do Solar Panels Increase Home Value?

Many homeowners, buyers, and appraisers know that the installation of solar panels and solar batteries can increase a property's market value. In fact, one study confirmed that solar installations increase a home's resale value by up to $5,911 for each kilowatt of solar panels installed, and another estimated an increase of 4.1% of the home's value.

Where do these figures come from, exactly? To begin with, consider a Zillow study, which notes that homes with solar installations tend to sell for about 4.1% more than homes without. Of course, this is an average. Some locations show a higher value-add (5.4% for New York City), and some show lower (2.7% for Riverside, California). An older study from Lawrence Berkeley National Laboratory reveals an increase in resale value of approximately $5,911 for each kilowatt of solar power that's installed.

So, how much do solar panels increase home value? Let's take a look at some averages:

Home Solar System Size Amount Solar Panels
Increase Home Value*
4 kW $23,644
6 kW $35,466
8 kW $47,288
10 kW $59,110

*Figures based on study by Lawrence Berkeley National Laboratory.

It's worth noting that these amounts are roughly in line with the total cost of a solar panel system, which may be just the incentive you need to finally take the plunge into solar power. To get connected with a solar installer in your area and receive a free quote, you can fill out the form below.

Factors That Influence the Value-Add of Solar Panels

While these simple calculations can give you a ballpark, there are a number of factors that influence the value-add of solar panels. Some of the most prominent include:

  • Geographic location: Different communities experience different electrical costs (and higher electrical costs result in greater value from your solar panels). Additionally, geography can influence the amount of sun exposure you get, as well as the social benefits of installing solar power.
  • Local solar installation prices: Another geographic factor is the cost of getting a new system in your area. If a buyer would save money by purchasing a home with a system already installed, it will make your home that much more valuable.
  • System output: As you can see from the chart above, a larger system with more energy generation will provide more added value.
  • System age: If you have an older solar system, you'll need to account for depreciation. Older systems won't add that much value to your home when you sell it, as there's a higher chance the buyer will need to do repairs or replace parts sooner.
  • System replacement value: Along the same lines as system age, how expensive or difficult parts of your system would be to replace affects the added value of the system overall.

Are Buyers Looking for Homes with Solar Panels?

Another question to consider when figuring how much solar panels would increase your home value is just how enticing a solar system is to buyers in your community. This is something that will vary by geography, and specifically by local solar literacy. Simply put, buyers won't be as willing to invest in a solar system if they don't really understand how solar panels work or how they can benefit from them.

With that said, there's some data that shows homeowners to be pretty open to energy efficiency features, for the most part. For example, more than 80% of homebuyers say that energy efficiency is a priority, according to the Zillow Group Consumer Housing Trends Report.

Some earlier data from the National Renewable Energy Laboratory shows that homes with solar panels sell 20% faster and for 17% more than those without. (Granted, this information is about 15 years old; there's now greater supply and greater demand for homes with solar panels, but these data points should be promising nonetheless.)

How Do Solar Panels Affect Property Taxes?

Of course, when your property values go up, that usually means that your property taxes increase as well. The good news is that many states offer exemptions, meaning that when you install a solar system, your property taxes do not go up, even if your property value rises.

Here's a rundown of property tax exemptions by state:

Solar Property Tax Exemption States*
100% exempt Arizona, Colorado, Connecticut, District of Columbia, Florida,
Indiana, Kansas, Louisiana, Maryland, Michigan, Minnesota,
Missouri, New Jersey, New Mexico, Oregon, Rhode Island,
Texas, Vermont, Wisconsin
Local exemptions Alaska, Hawaii, New Hampshire, Ohio, Virginia
100% exempt for 20 years Massachusetts
100% exempt for 10 years Montana
100% exempt for 5 years Iowa, New York, North Dakota
100% exempt until 2025 California
80% exempt North Carolina
System-based exemption Illinois, Nebraska, Tennessee
Tax exemption of $50,000 or 70%
of total property value
South Dakota
No exemption Alabama, Arkansas, Delaware, Georgia, Idaho, Kentucky,
Maine, Mississippi, Nevada, Oklahoma, Pennsylvania,
South Carolina, Utah, Washington, West Virginia, Wyoming

*Accurate as of date of publication.

Do Solar Panels Make Sense for Your Home?

As you weigh the pros and cons of solar energy, it makes sense to consider the overall impact on your property value. You'll also want to take into account factors including:

  • How much you spend on utility bills each month: If you live in an area that has high average electricity rates, you'll get a better return on your solar energy investment.
  • How much sunlight your home gets throughout the year: Some homes are better positioned for solar panel installation than others. If your home is situated at an optimal angle for harnessing the sun's energy, it makes more sense to go solar.
  • Financial incentives available to you: All American homeowners are eligible for the federal solar tax credit, but many states and municipalities have added rebates, low-interest loans and other financial incentives for their own residents as well.

For many homeowners, the question of whether to buy solar panels comes down to cost. If you want to see how much solar panel installation would cost for your home, you can get a free, no-obligation quote from a top solar company in your area by filling out the form below.

FAQ: Do Solar Panels Increase Home Value?

Do solar panels hurt the resale value of your home?

Generally speaking, the opposite is true; installing a home solar array actually increases the resale value of a home, particularly if you have a high-efficiency system that helps lower monthly energy bills.

Solar literacy in your local community is an important factor here, but for most homeowners, the answer to this question will be a resounding no. Multiple studies have shown that buyers are looking for more energy-efficient homes to reduce their carbon footprints and help save on electricity bills.

Do bigger solar installations present a better value-add than smaller systems?

Bigger solar installations may present a better value-add than smaller systems. However, in many cases, it's not the number of panels that matters so much as the power output. A smaller system, assembled with the most efficient solar panels can be just as impactful as a larger, lower-efficiency system.

The aesthetics of the system may also be a factor, with many buyers actually preferring smaller, less conspicuous systems.

How much value does solar add to the home?

A few studies have shown that solar installations increase a home's resale value by up to $6,000 for each kilowatt of solar panels installed, or by about 4.1% of the home's value. However, this can vary quite a bit from one geographic location to the next, even for comparable homes with similar solar panel systems.

Do you really save money with solar panels?

While the initial investment may be steep, solar panels can definitely help to significantly reduce or even eliminate your monthly electric bills. These ongoing energy savings are a nice addition to the elevation in property values.

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Solar Energy Pros and Cons: Is Going Solar Right for You?

Weighing the pros and cons of solar can help you make the best decision for your home.

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Lourdes Balduque / Moment / Getty Images

The solar boom is underway; the best solar companies are becoming household names, and the benefits of solar energy are taking the spotlight from oil, coal and gas. However, with so much literature to sort through these days, it can be tough to gauge the real solar energy pros and cons — especially since they're so dependent on the customer.

Though a sound investment, solar is a significant one, and we want our readers to fully understand the advantages and disadvantages of solar energy before making a purchase. Of course, using the sun as a renewable energy source can reduce your household's monthly electric bills and minimize your carbon footprint. However, there are some factors that make solar a little less valuable for some than others.

We'll go over the full pros and cons of solar energy in this article, but for many homeowners, the decision to go solar comes down to cost. To see how much solar panels would cost for your home, you can get a free quote from an installer near your by using this tool or filling out the form below.

Pros and Cons of Solar Energy: What You Need to Know

By installing a home solar system, you can use photovoltaic solar cells to capture and convert the sun's clean energy into electricity that can power your home or business. This can partially or completely offset the energy you'd typically purchase from your utility company.

While the advantages of solar energy are well advertised, there are also some drawbacks our readers should be aware of. Consider the following pros and cons of solar energy to help you decide if solar panels are worth it for your home.

Benefits of Solar Energy

Let's begin with the fun part — the biggest advantages of solar energy.

1) You can significantly reduce or even eliminate your household electric bills.

One of the most significant benefits of solar energy is also the most obvious: by generating your own energy, you can partially or completely offset the electricity you purchase from your utility. The average solar system lasts for two to three decades, which means most residents enjoy at least a decade or two of free energy after paying off their system with their energy savings and tax credit.

2) Going solar can reduce your carbon emissions.

The clean and natural energy harnessed by your solar system offsets the energy you'd typically purchase from local utilities. For the most part, local utilities carry a large impact stemming from the generation, transportation and distribution of electricity to your community. By using solar panels to generate your own electricity, you offset a portion of the greenhouse gases associated with fossil fuels, lowering your community's overall environmental impact.

3) Investing in a solar power system can increase the value of your home.

Homes with solar are becoming considerably more appealing, and installing the best solar panels can raise an estate's resale value by a decent amount. Note that this helps offset one of the primary cons of solar energy, which is the steep startup cost of solar panels — but more on that later.

4) Going solar can make you eligible for rebates and tax incentives.

Over the past couple of decades, the federal government has implemented numerous plans to incentivize solar energy, including solar tax credits and rebates. Many state governments have followed suit, particularly those where sun exposure is most consistent. Thanks to this, there are some significant ways to recoup part of your solar investment almost immediately. Again, this can help offset the initial cost of your solar panel system, allowing you to generate savings even before those utility reductions begin to stack up.

5) Solar + storage provides reliable backup power.

A solar battery storage system can provide backup power for homes in areas prone to power outages, which seem to be growing each year with the extreme weather brought on by climate change. With a backup battery like a Tesla Powerwall, you can keep your essential appliances powered during a prolonged outage. Even in mild weather, backup batteries let you store and use more of your solar energy, generating more savings.

Disadvantages of Solar Energy

Unfortunately, there are benefits of solar that won't prove effective for all homes. A few of the most notable disadvantages around solar include:

1) Not every roof can accommodate a solar system.

Solar panel installation requires you to have a certain kind of roof. If you have an older home, especially one with slate or cedar tiles on the roof, then you may not be able to buy solar panels for your personal use. Additionally, homes with skylights and other rooftop features may not have the surface area needed for solar panels.

If you don't have a lot of space or you're unsure about your home's solar capability, contact a local solar installer near you for a consultation. Most top solar companies will send out a representative free of charge.

Keep in mind that you can also install a ground-mounted solar panel system if you don't have a suitable roof.

2) Solar energy can be very location-dependent.

You can have a roof that's ideal for solar panel installation and still not be a good candidate for solar energy. Why? Because to take full advantage of solar power, you need to live in a place that gets consistent daily sun exposure. So, if you live in a part of the country that tends to be pretty cloudy, you may not produce the amount of energy necessary to justify your investment. Also, if your roof is partly shaded by trees or by neighboring homes, you may not get the best mileage from a solar energy system.

Location goes beyond just the amount of sunlight you receive, however. Some readers may live within the jurisdiction of a utility company without a favorable net metering policy. In the most unfortunate cases, utilities will charge hefty interconnection fees that can outweigh the savings solar provides.

3) Solar savings tend to correspond with energy bills.

The higher your electricity bills, the more energy you'll be able to offset with solar. But the inverse is also true: if you live somewhere with low utility costs, then the savings from switching to solar energy are going to be more modest. In other words, there are some parts of the country where the financial advantages of solar energy are going to be pronounced, and other places where those financial advantages are going to be nominal. It all depends on the cost of electricity where you live, and how much of it you use.

4) The upfront cost of going solar can be significant.

After adding up panels, labor, inverters and more, the average solar system investment ranges from $10,000 to $20,000. The specific number will vary according to the size of your home, if you need energy storage technology, your household energy use and the type of solar panels you choose. For example, if you make your own DIY solar panels, you'll cut down on installation fees, or if you want to get the most efficient solar panels, they'll cost significantly more.

There are plenty of ways to offset the cost of solar, including tax incentives, utility savings, increased home value and financing options. Still, there's no getting around it: Making the switch to solar is a significant investment.

5) Solar is getting more expensive with supply chain issues.

Worldwide supply chain issues have squeezed the costs of solar materials, shipping and labor. As a result, investing in solar in 2022 is proving a touch costlier than in years past. Still, solar technology itself continues to improve in efficiency and value while declining in price. We wouldn't recommend waiting to install a system, however, as the federal solar tax credit will be reduced in 2023 and will phase out altogether in 2024.

Weighing Solar Energy Pros and Cons

So, do the advantages of solar energy outweigh the disadvantages? Unfortunately, there's no easy answer here, as different homeowners may experience different levels of value when they make the jump to solar.

Before investing in a system, make sure you do your due diligence. Consider local sun exposure, the size and direction of your roof, local tax incentives and your own household energy expenses. Also, think about whether you want (or need) a solar battery.

Getting quotes from a few solar providers can give you more details about how much a new system will cost you. By weighing the pros and cons of solar energy for your home, you can make the best decision possible.

To get connected with a solar installer near you for a free consultation, you can use this tool or fill out the form below.

FAQ: Solar Energy Pros and Cons

When is solar energy a bad choice?

We aren't naive enough to claim that solar is always a good choice. For homeowners with low energy costs, shady roofs or insufficient space, the cost of solar can outweigh its benefits. Your location is important, too — not just in terms of sunshine, but also the financial incentives available to you. Check your local net metering policy and statewide and local incentives to see if you can save money on solar.

What are three disadvantages of solar energy?

The three biggest disadvantages to solar energy include:

  • The long-term nature of the investment: Life happens. Things change. Unfortunately, transferring solar loans or leases over to new homes or homeowners can be tricky. Some solar companies charge to have the panels relocated, and not all new homeowners will accept the solar lease or loan should you wish to transfer it.
  • Not every roof can accommodate a solar system: Small roofs, roofs with obstructions or roofs made with alternative materials can have trouble accommodating solar panels.
  • The cost of solar: Purchasing 25 years' worth of electricity upfront can make a lot of customers uncomfortable — and we understand why! The upfront cost of solar won't be feasible for all homeowners. Luckily, solar leases, flexible loan plans and incentives are making solar accessible to a wider range of home and business owners.

What are the advantages of solar?

Solar panels provide a reliable, low-maintenance way to avoid the carbon dioxide emissions associated with conventional energy generation. In addition to the environmental benefits, solar typically provides a great deal of energy savings for customers weighed down by rising utility costs. When properly designed and installed, solar is one of the best and most sustainable investments you can make.

Karsten Neumeister is a writer and renewable energy specialist with a background in writing and the humanities. Before joining EcoWatch, Karsten worked in the energy sector of New Orleans, focusing on renewable energy policy and technology. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.
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There are financial incentives available that make it easier for homeowners to invest in solar energy systems, including a number of solar tax exemptions at the state and local levels. These solar tax exemptions can vary by location and may include relief from sales taxes, property taxes and more.

In this article, we'll discuss which tax exemptions are available to homeowners who invest in renewable energy systems in each state, as well as the federal solar tax credit. Read on to learn more, or fill out the form below to get a free, no-obligation quote from a solar installer near you to see how much can save on a solar panel system.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

Solar Sales Tax Exemptions

Solar sales tax exemptions are a common financial incentive designated by state governments. According to the Solar Energy Industries Association, there are currently 25 states that offer a solar sales tax exemption.

What does this mean, exactly? Most states levy a tax on consumer purchases, which can range from 2.9% to 9.5%. With a solar sales tax exemption, these taxes are waived on purchases of solar panels, solar batteries and other forms of solar equipment. Naturally, this can reduce the total purchasing cost considerably, making a solar investment a bit more affordable.

For example, if your state has a sales tax of 6% and you purchase a solar panel system for $16,000, you'll end up paying $16,960 in total. If your state has a solar sales tax exemption, however, you'll only pay $16,000.

Solar Property Tax Exemptions

The Solar Energy Industries Association notes that 36 states currently offer a property tax exemption for homeowners who install residential solar systems.

Here's what this means: A solar panel installation typically results in a significant increase in your property values. (On average, homeowners see a solar-related property value increase of about 4.1%.) In states that have renewable energy property tax exemptions, homeowners whose property values rise are protected from a comparable increase in property taxes. In other words, the worth of the home goes up, but homeowners do not have to pay anything more come tax time.

Solar Tax Exemptions: State By State Breakdown

Different states have different laws when it comes to sales and property tax exemptions for solar installations. To learn about the tax incentives available in your area, check the table below:

State Solar Property Tax Exemption* Solar Sales Tax Exemption*
Alabama No exemption No exemption
Alaska Local exemptions No sales tax
Arizona 100% exempt 100% exempt
Arkansas No exemption No exemption
California 100% exempt until 1/2/2025 No exemption
Colorado 100% exempt 100% exempt
Connecticut 100% exempt 100% exempt
Delaware No exemption No state sales tax
Florida 100% exempt 100% exempt
Georgia No exemption No exemption
Hawaii 100% NHL only No exemption
Idaho No exemption No exemption
Illinois Special assessment No exemption
Indiana 100% exempt No exemption
Iowa 100% exempt for 5 years 100% exempt
Kansas 100% exempt No exemption
Kentucky No exemption No exemption
Louisiana 100% exempt No exemption
Maine No exemption No exemption
Maryland 100% exempt 100% exempt
Massachusetts 100% exempt for 20 years 100% exempt
Michigan 100% exempt No exemption
Minnesota 100% exempt 100% exempt
Mississippi No exemption No exemption
Missouri 100% exempt No exemption
Montana 100% exempt for 10 years No state sales tax
Nebraska Exemptions only for systems over 100 kW No exemption
Nevada Exemptions only for certain systems over 10 MW No exemption
New Hampshire Local exemptions No state sales tax
New Jersey 100% exempt 100% exempt
New Mexico 100% exempt 100% exempt
New York 100% exempt for 5 years 100% exempt
North Carolina 80% exempt No exemption
North Dakota 100% exempt for 5 years No exemption
Ohio Exemptions in Cincinnati and Cleveland 100% exempt
Oklahoma No exemption No exemption
Oregon 100% exempt No state sales tax
Pennsylvania No exemption No exemption
Rhode Island 100% exempt 100% exempt
South Carolina No exemption No exemption
South Dakota Exemption of either $50,000
or 70% of total property value
No exemption
Tennessee Tax value no more than 12.5% of installed cost 100% exempt
Texas 100% exempt No exemption
Utah No exemption Exemptions only for systems
over 2 MW
Vermont 100% exempt 100% exempt
Virginia Local exemptions No exemption
Washington No exemption Exemptions only for systems
up to 10 kW
Washington DC 100% exempt No exemption
West Virginia No exemption No exemption
Wisconsin 100% exempt 100% exempt
Wyoming No exemption No exemption

*Accurate as of time of publication.

Federal Solar Tax Incentives

In addition to these state-specific incentives, there is also a federal tax incentive that is available to all Americans who invest in solar power. The solar investment tax credit (ITC) is currently valued at 26% of the total solar installation cost, meaning homeowners can essentially deduce 26% of that up-front cost.

This tax credit covers:

  • The cost of solar panels
  • Labor costs for installation
  • Additional solar equipment, like inverters, wiring, etc.
  • Energy storage devices, including solar batteries
  • Sales taxes paid for eligible solar installation expenses (in states that do not have sales tax exemptions)

Note that the federal tax credit is available for all homeowners who purchase a system, whether they buy it outright or finance it with a solar loan, but it is not available to those who lease solar panels.

Frequently Asked Questions: Solar Tax Exemptions

Are solar panels exempt from sales tax?

In states that have a solar sales tax exemption, yes, the purchase of solar panels is shielded from sales tax. Currently, at least 25 states offer a solar sales tax exemption.

Is solar sales tax exempt in Texas?

No, Texas solar incentives do not currently include a sales tax exemption.

Is solar exempt from property taxes?

Currently, there are 36 states that offer solar property tax incentives. Take a look at the chart included above to find out whether your state offers a solar property tax exemption. Some municipalities may have local property tax abatements as well, so property owners considering going solar should check government websites for additional information about incentives and rebates.

Are solar roofs tax deductible?

Your solar roof shingles can be claimed via the federal solar investment tax credit, allowing you to deduct 26% of your total clean energy system costs.

Do solar panels decrease property taxes?

Solar projects usually increase residential property values, which in some states may actually mean an increase in property taxes. However, in the 36 states that offer a solar property tax exemption, an increase in home values does not result in an increase in property taxes.