Cost of Solar Panels in Indiana: Local Solar Installation Prices (2022)
Here’s a quick look at the estimated cost of solar in Indiana:
- Average Cost Per Watt: $2.68
- Cost of Average System: $18,840*
- Cost of Energy Without Solar: $47,454
- Payback Period: 12 Years**
- Lifetime Savings of Going Solar: $21,994
*Average system size is calculated using data from the Energy Information Administration. This price is after tax credit.
**Payback period is calculated assuming the system is purchased in cash.
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Cost of Solar Panels in Indiana
The typical solar panel system in Indiana needs to be 9.5 kW to cover the average $120 monthly electric bill in the area. At a statewide price per watt of $2.68 — slightly above the national average of $2.66 — that comes out to an average price of $25,460, or $18,840 after you take advantage of the federal solar tax credit.
The cost of solar in Indiana is about average compared to most states, and the high energy usage and high cost of electricity — especially in cities like Indianapolis — make going solar a worthwhile investment for most homeowners.
Solar Panel System Installation Cost in Indiana
The biggest factor to consider when estimating the cost of going solar for your home is the size of the system you’ll need. This is based on a number of factors, including your average energy consumption (measured in kilowatt-hours), the size and energy efficiency of your home, your roof orientation and more. Each additional kilowatt your home requires will add approximately $2,680 to your total.
Below are some standard system sizes in Indiana, along with estimated prices before and after the federal tax credit.
|Size of Solar Panel System||Indiana Solar Panel Cost||Cost After Federal Tax Credit|
Interested in getting a size assessment and a free quote for going solar for your home but not sure where to turn? Check out our review of the best solar companies in Indiana to get started in the right direction.
What Determines the Cost of Solar Panels in Indiana?
As the table above demonstrates, the size of your solar system is the most prominent factor in determining its price, with costs increasing with every additional kilowatt added. However, there are several other factors to keep in mind that can significantly affect your total. We’ll discuss these briefly below.
The equipment you choose for your solar project can swing your price up or down by thousands or even tens of thousands of dollars.
First, you’ll have to consider the array of equipment you want. All home solar systems include solar panels and inverters. Add-on equipment will cost extra but can provide some customization options for your setup. For example, adding solar batteries — like the Tesla Powerwall — or electric vehicle chargers will increase your total cost of going solar.
Additionally, the brand of equipment you choose matters. The cheapest solar panels will always cost significantly less than the most efficient panels, reducing your upfront costs. However, high-efficiency solar equipment can often provide more energy production and could save money in the long run.
Solar equipment and installation is expensive in Indiana, and some homeowners might not be able to pay the average $25,460 up front for a solar panel system. Luckily, solar financing options are available from nearly every installer in Indiana, and third-party companies also offer solar loans.
While financing reduces your initial investment, it will always result in you paying more over time for your solar energy system, cutting into your return on investment. Even low-APR loans will lead to interest accruing on your principal balance. It’s best to include the estimated interest in your cost calculations using a solar calculator to determine your all-in price. A good way to reduce your interest is by paying a larger amount upfront via your down payment.
Solar Installation Company
Finally, the solar installer you choose to complete the conversion process can have an impact on your total. Companies will charge different amounts for their labor, equipment and warranties.
The size of the company you select is something to consider as well, as larger national companies tend to have lower pricing at the expense of customization options and, sometimes, customer service quality. Smaller local companies sometimes provide discounts to undercut the larger corporations, but it really depends on the specific company you’re considering.
Additionally, some companies will typically be more expensive than the competition if they only carry high-quality equipment. For example, a solar panel installation company that exclusively offers Maxeon solar panels from SunPower or Tesla Powerwalls will come with higher costs, although the high-efficiency equipment will often save you money on your utility bills over time.
Indiana Solar Incentives
To help reduce the cost of switching to clean energy, the state government in Indiana and the federal government provide access to solar rebates and tax incentives. Below are the renewable energy incentives available to Hoosier State residents.
|Indiana Solar Incentive||How it Affects the Cost of Solar Panels in Indiana|
|Sales Tax Exemption||Indiana’s laws ensure you don’t pay sales tax on any solar photovoltaic equipment.|
|Property Tax Exemption||Solar panels will raise your property value, but in Indiana, your property taxes will be calculated excluding this added value.|
|Net Metering||Through net metering, your utility company will credit you for any excess energy your system produces. Indiana mandates net metering but doesn’t require providers to value the credits at the full retail rate. (Learn more)|
|Local Solar Rebates & Incentives||Your utility company or municipality may offer solar rebates, credits or other incentives. Be sure to research what’s available in your area.|
|Federal Solar Tax Credit||The federal solar investment tax credit (ITC) is available for all U.S. homeowners and allows those who switch to solar to claim a 26% credit on their federal income taxes. The credit is currently set to reduce to 22% in 2023 and will be eliminated for residential systems in 2024.|
Best Solar Panel Brands and Installed Solar System Costs in 2022
The EcoWatch team evaluated the best solar panels available to see which are the most efficient and affordable in Indiana. The table below lists the most popular and high-quality brands along with relative pricing to help you decide which is right for you.
|Solar Panel Brand||Average Cost Per Watt|
People Also Ask
EcoWatch FAQ: Solar Panel Cost Indiana
The EcoWatch team gets questions daily from Indiana residents about going solar and the benefits they can enjoy. Below are some of the questions we see most frequently, along with our responses.
Yes, absolutely! Going solar is considered a worthwhile investment in Indiana because, provided you buy or finance them, your property value is expected to increase.
A study from Zillow estimates an average return of about 4.1% of your property value. In Indiana, where the average property value is $206,422 at the time of publication, that’s an estimated return of about $8,463.
Unfortunately, this bump in home value is not expected when you lease panels or enter into a power purchase agreement (PPA), making these much less cost-effective options.
It’s almost always a better idea to buy or finance your solar panel system in Indiana if you have the option. Leasing makes going solar more accessible for some homeowners, but it doesn’t come with nearly as many benefits.
For example, your home value will not increase when you lease solar panels, so you’ll be missing out on a bump of about $8,463. You also won’t get the benefit of the federal tax credit when you lease, so that’s another loss of $6,620, on average. In case that’s not enough, leasing will also save the least amount of money over time despite often being the most affordable option upfront.
No, solar panels are not free in Indiana, and the companies that advertise “free panels” don’t actually install free panels. This is a marketing scheme to get you to sign a solar lease or power purchase agreement (PPA), neither of which is usually in your best interest.
Yes, it is possible to eliminate your electricity costs in Indiana by installing a solar panel system, and many residents do exactly that (minus any interconnection fees). However, it is more challenging to do in Indiana than in many other states because of its below-average net metering policy. You’ll need a roof that gets plenty of sunlight, a large enough system, and solar batteries to offset energy usage in most cases in Indiana.
This question is impossible to answer accurately without doing an individual assessment of your home. The solar system size you need is based on your monthly energy consumption, your roof orientation, shading on your property, your home size and efficiency, and much more.
The average system size in Indiana is 9.5 kW, but some homes need only a 5-kW system or smaller. The only way to get a reliable estimate for your solar project is to contact a solar company in the area to develop a custom solar system to meet your needs.