Table of Contents:
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Solar saves money if your home has good sun exposure and high electricity usage.
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Incentives like state rebates and net metering help improve ROI.
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Battery storage is required if you want backup power during outages.
Tired of not having control when electricity rates rise or the power goes out? Home solar panels can save you money over the long term, and adding storage can provide backup during outages. We’ll help you decide if it makes sense for you below.
Want to gain independence from utility monopolies? Find solar installers in your area:
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Why more homeowners are going solar in 2025
Many people want to save on utilities over time with solar, but that’s not the only reason. Another big part is taking back control from unexpected rate hikes and outages.
As power outages rise and energy bills climb, home solar systems with battery storage are becoming a smarter, more resilient option. Pairing PV panels with solar battery storage can keep your power on during blackouts while saving money over time.
Grid instability is no longer a rare event
According to data from PowerOutage.us and the U.S. Department of Energy, major power outages have increased in the past decade. This is in part because of extreme weather, aging infrastructure, and rising demand.
With events like Winter Storm Uri and California’s rolling blackouts, many homeowners are looking for clean energy options that don’t go dark when the grid does.
Electricity prices are surging
Utility rates are climbing in nearly every U.S. state, and homeowners are feeling the pinch. From California to Texas, people are reporting bills of $400 to $800 during peak seasons.
Our data also shows Americans used to pay an average of 12.3 cents per kWh in 2017, but 16.6 cents today. With solar, you can basically prepay for your energy use over the next two and a half decades and recuperate your investment in less than half the time.
Incentives make solar power for your home easier
There are incentives for residential solar panels that significantly reduce costs. The federal solar tax credit covers 30% of installation expenses, and many states, cities, and utilities offer additional rebates, tax breaks, or performance-based incentives to boost savings.
Here are a few examples:
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Residential Clean Energy Credit: The IRS provides a tax credit of 30% of the cost of a new renewable home energy system installed between 2022 and 2032.
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State tax credits: States offer credits that can be a flat dollar amount or a percentage of the installation cost. For example, homeowners in Arizona can get up to $1,000 to install a solar system.
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Rebates: States, utilities, and agencies may offer other solar rebates to lower net installation costs. For example, AEP Texas North customers can get a rebate based on their system’s output and available funds.
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Tax savings: A majority of states provide exclusions so your taxes don’t rise after installing solar panels. Many states also exclude solar panels from sales tax.
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Energy Star financing: Special financing can include energy savings in your debt-to-income ratio. This can give you more borrowing potential when purchasing or refinancing an Energy Star home.
How home solar panels compare to grid electricity
Compared to traditional grid electricity, home solar systems offer more cost predictability and long-term savings. Incentives like net metering and tax credits help, though solar can protect against utility rate hikes even without incentives.
While grid power relies on centralized fossil fuel-based generation with variable pricing, residential solar paired with battery storage (like a Tesla Powerwall or Enphase IQ Battery) provides localized, clean energy and grid independence. Solar with storage can reduce energy bills and increase your independence at the same time.
Though solar panels require cost upfront, many homeowners report full ROI within 7 to 10 years.
| Factor | Traditional Grid Power | Home Solar (No Battery) | Home Solar With Battery Backup |
|---|---|---|---|
| Monthly Bill | $147 on average | Save 20% to 100% | Save 20% to 100% |
| Power in Outage | ❌ No | ❌ No | ✅ Yes |
| Price Volatility | ❌ High | ✅ Low (locked-in investment) | ✅ Low |
| Incentives Available | ❌ None | ✅ Federal and state incentives | ✅ Federal and state incentives |
| Carbon Footprint | ❌ High | ✅ Low | ✅ Low |
| Long-Term ROI | ❌ None | ✅ Break-even in 7 to 10 years | ✅ ROI plus outage protection |
Is your home a good fit for solar panels?
You should get solar panels if you own your home and have high electricity costs. Solar panels reduce energy bills, increase home value, and come with strong incentives. This makes them a smart, long-term investment for many homeowners.
Here are a few things to consider:
| Factor | Ideal Scenario for Solar |
|---|---|
| Homeownership | You own your home (renters can subscribe to community solar as an alternative). |
| Location | Your home averages at least four hours of peak sun per day. |
| Roof | You have an angled roof with 15 to 40 degree tilt. Ideally, it faces south and has minimal shade during the day. Metal and asphalt shingle roofs work best. |
| Finances | Paying for a solar system upfront or getting a loan with a good interest rate are the best options. Avoid solar leases. |
| Incentive availability | Tax breaks and state rebates can dramatically reduce the cost of going solar, and some incentives vary by state. |
| Current electricity costs | Switching to solar makes the most sense if you have a high electricity bill. If your monthly bill was $0, how long would it take you to recuperate the cost of a solar system? |
Find out if your home is a good fit for solar below
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How much power can solar panels produce?
Solar panels can produce between 250 and 400 watts each, depending on the brand and conditions. A typical home system generates 6,000 to 10,000 kWh annually, covering most household needs.
You can use the PVWatts calculator to closely estimate the power that a solar system of different sizes can produce at your address. The calculator allows you to select many parameters, like:
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Total system size
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Roof tilt
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Roof direction
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Type of panel (standard, advanced, or thin-film)
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Mount type
You can then see the output by month and year to compare with usage data from your energy bill. While this is just an estimate, it can help show whether an average 7 kW system is enough or if you need something bigger.
How many solar panels power a house?
Our data shows that 13 panels can run a 4 kW system for a small home, while 25 panels can run an 8 kW system for a medium-sized home. How many panels you need depends on your energy usage, home location, and more.
Are solar panels for your home worth it?
If you’re considering solar panels for your home, here’s a clear look at the biggest benefits and what to keep in mind before you buy.
| Pros | Cons |
|---|---|
| ✅ Lower electricity bills with long-term savings | ❌ High upfront cost or financing required |
| ✅ Eligible for net metering in many states | ❌ Not all roofs or locations are ideal for solar |
| ✅ Access to clean, renewable energy | ❌ Solar output depends on sun exposure |
| ✅ May increase home resale value | ❌ Payback period can take 7 to 10+ years depending on location |
| ✅ Backup batteries can keep power on during outages | ❌ Not all installers offer the same quality or service |
Tip: You can overcome most of these cons with the right installer, good financing, and state or utility incentives. Compare solar options in your area below:
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Cost of solar panels for a home
With an average installation cost of $17,823 for a 5 kW system, solar panels aren’t cheap. Costs vary by location, too. Our data shows a 5 kW system ranges from $13,958 in Arizona to $21,082 in Hawaii. However, over a 20-year period, our data shows the average homeowner saves $16,331 after recuperating the installation cost.
Below are some highlights from our solar cost data across the U.S. These figures do not include the 30% federal tax credit.
Lowest home solar panel system prices
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Arizona: $13,958 (7-year payback, $25,064 in savings)
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Texas: $15,215 (7-year payback, $25,715 in savings)
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Florida: $15,254 (8-year payback, $22,651 in savings)
Highest 20-year savings on home solar systems
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Connecticut: $31,935 savings on an $18,267 system (7-year payback)
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Hawaii: $29,477 savings on a $21,082 system (8-year payback)
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Texas: $25,715 savings on a $15,215 system (7-year payback)
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Arizona: $25,064 savings on a $13,958 system (7-year payback)
Fastest solar payback periods
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Connecticut, Arizona, and Texas all reach breakeven in just 7 years
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California and Maryland: About 8 years with $23K to $24K in total savings
Slowest ROI for home solar panels
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New Mexico: $19,212 system with only $4,334 in 20-year savings (16-year payback)
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Colorado, Minnesota, Illinois: 14- to 15-year payback with under $9,000 saved
How much can you really save with solar panels on your home?
It's easy to get caught up in sales pitches claiming “zero electric bills” with solar for your home. In reality, savings depend on a mix of factors unique to your home, finances, and utility market. In many cases, your savings build over time as you pay off the system and energy rates increase. Let’s take a look at a few hypothetical scenarios.
Scenario 1: Balanced ROI with long-term payoff
Let’s say you install a 10kW solar panel system in a sunny state like Arizona. Your upfront cost is $30,000, but after the 30% federal tax credit, you’re down to $21,000. You use about 900 kWh/month, and your system produces about the same.
If utility rates average $0.15/kWh, you’re offsetting about $135/month, or $1,620/year in electricity. That’s a break-even point in around 13 years. Or, shorter if electricity rates rise or state incentives kick in.
Scenario 2: Energy-conscious DIY setup
In this scenario, you purchase and install a 7kW system yourself. You get your cost down to $15,000, or $10,500 after the tax credit. You live in a state with Solar Renewable Energy Certificate (SREC) incentives and sell your excess energy credits each month. Plus, you track your usage to stay under production capacity.
You’re now saving $120/month on utility bills, plus earning $300 to 500 annually in SRECs. Your system pays for itself in 5 to 7 years, with gains growing as utility rates increase.
Scenario 3: A growing family increases energy usage
You size your system based on the past year’s usage (say, 800 kWh/month). But then life happens. More devices, kids get older, and summers get hotter. Your usage grows to 1,100 kWh/month, while your system only offsets 75% to 80% now.
You still save, but not as much as initially projected. Break-even stretches from 7 years to over 10, unless you expand your system or reduce energy consumption.
Scenario 4: Passive gains for a retired homeowner
In this scenario, you finance a $25,000 system with a low-interest 3% loan over 12 years, making $220/month payments. Your utility bill drops from $280/month to nearly zero, so you’re still cash flow positive.
You also receive the $7,500 tax credit, which you invest or use for other home upgrades. Once the loan is paid off, your panels generate essentially free power, building ROI into retirement.
Scenario 5: Run the A/C without worrying about bills
Maybe you're not just thinking in dollars. You want to run your A/C guilt-free, reduce your carbon footprint, and be less reliant on the grid.
Before solar, high summer bills forced you to limit A/C use. Now, your monthly bill drops from $400 to $150, and you enjoy comfort without financial stress. The value of comfort and climate control is hard to quantify, but very real.
What impacts home solar savings?
Savings with solar are not instant or identical for every homeowner. They depend on:
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System cost after incentives
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Electric rate structure and net metering
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Household energy habits and lifestyle
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Local climate and solar production
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Whether you finance, lease, or buy outright
Gain freedom from rising utility rates: find solar installers below.
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How can net metering increase your ROI?
Net metering gives you credit for the excess energy your grid-connected solar panels create. States that have full net metering provide a one-to-one credit for the energy you send. So, if you pay 16 cents per kWh, you get 16 cents for each kWh you provide to the grid. This is called the retail rate.
Net metering can reduce your electricity bill to $0 (besides minimum charges). Even though your home uses energy from the grid at night, your system has produced enough during the day to cover more than you need in that 24-hour period. Most states with net metering allow credits to roll over indefinitely or for the billing year, so you can use credits you earn in the summer for the fall.
Be aware that some states offer variable, avoided-cost, or wholesale rates. These are all lower than the retail rate.
Best ways to pay for home solar panels
The best way to pay for solar panels is with cash. This way, you avoid paying interest and have the quickest payoff period. That said, paying with cash isn't feasible for everybody.
The next best option is to finance the panels with a loan. Calculate how much financing will cost you in the end and use that to figure out your payback period. You can get loans from a bank, credit union, finance company, or even a solar installer.
Some companies also offer solar leasing options, where you make a fixed lease payment but don’t own the panels. We don't recommend this arrangement because the long-term savings are lower and you can’t claim the federal tax credit.
Do solar panels increase your home’s value?
Solar panels could increase the value of your home. For example, a Zillow study showed that homes with solar panels sell for an average of 4.1% more than those without. However, if you wait 20 years after installing solar to sell your home, buyers could see the old system more as a liability than an asset.
ROI on home solar panels varies by state
The payback period can vary greatly by state because of differences in climate and local regulations. Learn more about solar power in your state below.
How do you buy solar panels for your home?
Buying solar panels is simpler than you might think. Here’s how the process works from quote to installation:
1. Compare certified installers: Get multiple quotes from NABCEP-certified pros with good reviews and strong warranties.
2. Choose equipment and financing: Your installer will help you pick the right system and decide whether to pay upfront or finance.
3. Site assessment and design: They’ll visit your home, check your energy use, and design a system that fits your roof and goals.
4. Permits and installation: The company handles permitting, then installs the system, usually in just a few days.
5. Final inspection and connection: Once approved by your local utility, your system goes live, and you start generating clean power.
Top solar brands and installation providers
When choosing home solar panels, it’s important to compare both equipment manufacturers and certified installers. Here are some of the top names:
Popular solar panel brands:
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SunPower: High-efficiency, all-in-one residential systems
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Tesla: Sleek solar roofs and Powerwall batteries
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Q CELLS: Cost-effective, widely used residential panels
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REC: Durable and efficient modules
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Panasonic: Advanced technology and long warranties
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Canadian Solar and JinkoSolar: Global brands offering strong performance at lower costs
Reliable solar installers:
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Sunrun
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Trinity Solar
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Solar Optimum
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Semper Solaris
Depending on your state, you may have access to dozens of local and national installation companies. Compare pricing, warranties, equipment quality, and certifications before you decide.
Watch for red flags. If you're quoted over $40,000 for a standard 5 kW system, that’s far above average. Our data shows most 5 kW residential solar installations range from $13,958 to $21,082.
Get quotes from top-rated solar installers below.
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Bottom line on solar panels for your home
Home solar panels are often worth it and have the potential to save you thousands in electricity bills over time. The deciding factors include how much electricity you need, solar panel costs in your area, average sunlight (diffuse and direct sunlight), and state incentives available to you. If the math looks good to you, it’s a great time to start using clean solar energy for your home.
Home solar can save money and keep your power on
If you follow outage trends on PowerOutage.us, you know grid failures are becoming more common. Solar energy gives homeowners a way to take control: cutting electric bills and, with battery storage, keeping the lights on even when the grid goes down.
Check out our guides for more information:
FAQ about house solar panels
Below are a few frequently asked questions about home solar panels:
Can I run A/C on a solar panel?
Yes, you can run A/C on an efficient home solar panel system. If you want to use solar energy at night, you’ll need a battery backup to power your home with stored energy.
How many solar panels are needed to run a home?
A small home with a 4 kW system needs 13 panels while a mid-sized home with an 8 kW system needs 25 panels. On the high end, a 14 kW system would use 44 panels to power a large home with high electricity needs.
Are residential solar panels worth it?
If your home gets at least four hours of peak sun per day on average, a solar panel system is likely to be worth it. Solar panels pay for themselves in about seven to 10 years on average.
How many solar panels do I need for a 2,000 sq ft home?
If you use 10,000 to 12,000 kWh per year of electricity for a 2,000 sq ft home, you’ll need between 19 and 25 solar panels on average. This assumes your home is a good candidate for efficient solar generation.