The Real Cost of Solar
The average solar system for a US home costs $15,000 to $30,000 before incentives. After the federal 30% tax credit, the net cost drops to $10,500 to $21,000. That is still a major purchase with a 7 to 12 year payback period in most markets.
Solar Loan Hidden Costs
Solar loans often carry interest rates of 5 to 9.99%. On a $20,000 system with a 12-year loan at 7%, you pay approximately $9,000 in interest over the loan term. This dramatically extends the payback period and can eliminate the financial case for solar.
Some solar loans also include a dealer fee paid directly to the installer, typically 15 to 25% of the loan amount. This fee is rarely disclosed upfront.
Questions to Ask Every Solar Company
- What is the all-in system cost, and what does it include?
- What is the warranty on panels, inverters, and installation labor separately?
- Is my roof suitable, or does it need replacement before installation?
- What is my estimated annual energy production, and how was it calculated?
- What incentives am I eligible for, and who handles the paperwork?
- If I finance, what is the full cost including interest over the loan term?
- How does a lease or PPA affect my home sale?
- What happens if panels underperform the estimate?