2019 is the last chance to buy solar panels for home and get a payback period of 5-8 years!
Written by Andrew Sendy
Updated March 12, 2020
10 minutes read
The total cost of solar panels for homes is currently offset by a 30% federal tax credit, utility-based solar incentives, state tax credits and a net metering law.
Right now most homeowners installing solar panels in the better solar states can get a payback period of 5-8 years on their solar investment. Given solar lasts at least 25 years this means 20 years or more of living without an electric bill. With electricity rates rising constantly this seems like a great deal and a better return than historical returns from property or shares. But the winds of change are blowing and 2019 may be the last chance to make this return from residential solar panels.
How do solar panels for homes work?
Solar panels for residential buildings are different from other types of solar power systems because they are usually going to connect to the local utility grid system.
Installing solar panels for home and connecting to the grid means the utility company controls what equipment must be included with a residential solar power system and the rules about how it can operate. The utility must approve the size of the system, the voltage and current, the solar inverter that you can use and the way the solar inverter must operate when the grid goes down.
Do solar panels for a house keep working when the utility grid fails?
No...The inverter must shut down your solar energy system if the grid goes down so that a linesman working on the lines are not shocked by the solar electricity from your solar panel. This need to shut down often makes solar customers who have paid a hefty solar installation cost upset because it is when the electric grid is down that they would most like to have their solar working as backup power.
Why are solar panels for homes almost always tied to the grid?
The reason that most residential solar power systems installed in the US in 2018 are grid connected is that there are net metering laws in around 35 states. This legislation requires your electric utility to give you credit on your utility bill for each kilowatt-hour (kWh) of excess solar electricity (excess to what your home is using at the time of generation) that feeds back into the grid.
The nature of solar panels installed on homes is that they produce most of their power during the middle of the day when most people are using the least amount of energy because they are at work or school. Because it's not being used, 30%-50% of the energy production from residential solar panels can be fed back to the grid. With 1 for 1 retail net metering, you get a credit of 1 kWh for each 1 kWh of solar energy you export. These credits are used to cover the cost of power you must draw from the grid at night.
Is it worth fitting a solar battery when buying residential solar panels in 2019?
Although the Tesla solar battery has improved both the storage capacity and solar battery cost, solar batteries are still quite expensive. Even after the California solar battery rebates, there is still a significant upfront cost. If there was no net metering law and solar owners were paid little for the excess solar energy they fed into the grid, then solar batteries might be compelling. However, given the existence of net metering in most states, solar batteries are not as attractive as they could be.
In some areas, this is shifting. For instance, the economic case for solar batteries is becoming favorable in California where residential electricity customers are being forced by their utilities to go onto a "time-of-use" electric plans that have expensive peak times and cheap off-peak times. These time of use plans creates a use for batteries for peak load shifting. Peak load shifting is when your solar battery charges during the off-peak period and you use the power from the battery during the expensive peak period.
For most Americans with access to net metering, solar batteries aren’t worth it. Yet. Net metering performs the same economic function as a battery, but there is no upfront cost for net metering as there is when adding a battery to your home solar panels.
What is the difference between residential solar panels and other types of solar panels?
Solar panels for homes are typically higher wattage and have higher voltage compared with solar panels for off-grid applications such as RV’s, caravans, solar pumps, and boats. A typical solar panel for a caravan or boat will be between 80-150 watts whereas an average size residential solar panel in the US in 2018 is between 265 and 365 watts. This is because the electronics used in off-grid or mobile applications such as campers usually operate at 24 or 48 volts and so panels suiting these voltages are needed for these applications.
The reason they operate at these voltages is that most of the off-grid battery chargers and battery inverters are built for these system sizes. Residential solar panels have higher voltages and wattage because the grid connects string inverters that they feed power to have much higher voltage windows ranging from 400 to 600 volts.
How much do solar panels save on homes?
The table below shows the average amount that residential solar panels save on the average home in each state in 2018.
What is the average cost of residential solar panel installations in the US in 2018?
|System size*||Average cost
(before tax credit)
(after tax credit)
|4 kW||$4.29||267 sq/ft||$17,179||$12,025|
|5 kW||$4.14||333 sq/ft||$20,683||$14,478|
|6 kW||$3.94||400 sq/ft||$23,654||$16,558|
|8 kW||$3.70||533 sq/ft||$29,603||$20,722|
|10 kW||$3.47||667 sq/ft||$34,671||$24,270|
|12 kW||$3.39||800 sq/ft||$40,654||$28,458|
|20 kW||$3.18||1,333 sq/ft||$63,501||$44,451|
What are the best brands of residential solar panels for your home?
You can find both expert reviews of the best solar panels for homes in 2019 on our site and also information about how to get the best deal on a system.
What are the most efficient solar panels for homes?
SolarReviews has published an article showing the most efficient solar panels on the market in 2018. What is interesting about this is that the three leaders, SunPower solar panels, LG Solar and Panasonic Solar regarding efficiency are significantly more expensive than the other tier 1 solar panels.
It is important to remember that - all other things being equal - two solar panels of the same wattage (say 300 watts) but different solar panel efficiency should still produce the same amount of power. Both are rated at 300 watts because at standard test conditions this is what they produced. The more efficient solar panels may be slightly smaller, but the output will be the same.
As such, I think some of the other tier 1 solar panels such as Canadian Solar, Trina Solar and others may produce just as much electricity at a cheaper cost.
How do I find the best local solar company to install solar panels for my house?
You can find the best-rated solar companies near you on SolarReviews. SolarReviews publishes over 25,000 reviews of solar companies as well as a significant amount of consumer education information and also current solar panel cost for your city based on live solar offers.