Are Solar Panels Worth It?

What to consider before going solar

Before you go solar, think about your home’s energy use, your budget and any rebates or tax credits you can get. Here are some questions to ask yourself.

1. What is my current electric bill?

Solar typically makes financial sense when your monthly electric bill is over $100. If your monthly bill is around $60, it may take over 20 years to break even. But if you pay $200 a month, you could see savings much sooner.

Higher bills = faster payback periods

Your electric bill shows how much energy you use and what you pay for it. Knowing your average energy use is the first step in figuring out if solar can save you money.

For example, William in Nevada said their monthly electric bill was up to $240. “At that point, I'd much rather be paying for some solar panels than straight up paying this electricity bill.” William told us that their bill is only $10 or $15 per month since going solar.

Monthly costs: Solar payments vs. savings

Think of going solar in terms of your monthly costs. Given rising energy costs, financing or leasing solar panels makes sense as long as your monthly payment is less than what you would be paying the utility company anyway.

» RELATED: Electricity cost statistics

2. Is my house a good candidate for solar?

Not all households benefit from solar panels in the same way. Here’s what to think about before you commit:

• How much sunlight do I get? Solar panels need regular exposure to direct sunlight to produce the most energy possible. Some shade from trees or buildings is fine, but heavy shade will cut savings.
• Do I have enough roof space? Small roofs may need more expensive high-efficiency panels to make enough power. High-efficiency panels generate more power per square foot, allowing you to produce the same energy with fewer panels. However, lower-efficiency panels may be more cost-effective if space isn't a concern.
• Which way does my roof face? South-facing roofs work best. North-facing, steep roofs perform the worst. If the only place you can install is a north-facing roof with a 30-degree pitch, your costs could go up by 30% to 40%, according to UC Irvine solar expert Robert Flores. “The overall amount of electricity will be less, and you’ll be investing more for the same amount of production,” he said.
• Are my appliances already energy-efficient? Replacing old appliances before going solar can lower your energy needs. This means you may need fewer panels. “If you reduce your electrical load, it reduces how much solar energy you need,” Flores explained. That means you can install a smaller, cheaper solar system that still meets your energy needs.

3. How much money can I save?

Solar is about saving over time, not making money. How much you save depends on your utility’s electricity rates and how much power your panels make.

Homeowners with mostly electric utilities get the best deal going solar. Julia in California told us: “I have a house with all electric utilities, including the water heater and central HVAC, and an electric car,” she said. “Going solar was a no-brainer for me.”

Another solar customer, Edward in California, wrote in a review: “Going solar allowed me to save a little bit. But it's not a tremendous amount of savings like people think. You're producing excess during the day when it’s sunny and you're just taking it right back at night. Maybe you're saving 150 bucks a month.” Still, saving $150 each month is worth it for many people.

How much can going solar save you?

Your savings with solar depend on how much electricity your system can produce and the cost of electricity in your area. We suggest using Project Sunroof to estimate your household’s solar savings. NREL’s PVWatts Calculator is another good tool to estimate how much electricity a solar panel can produce over a year for your house.

» EXPLORE: Where solar savings go the furthest

Pros and cons of solar panels

Solar panels are a big investment. If you’re on the fence, here are the main advantages and disadvantages of installing solar.

How much do solar panels cost?

Solar panel costs vary based on a range of factors. On the low end, you can install small 3-kilowatt (kW) to 5-kW systems for around $10,000 in some markets. On the high end, we’ve talked to solar customers who spent more than $100,000 going solar.

The table below does not include the cost of a solar battery, which can be $7,000 to $18,000 or more. Solar battery storage is worth considering if you want to store excess power from your panels for later use instead of sending it to the grid.

Average cost of solar panels by system size

What size solar system do I need?

Your average energy use determines what size solar power system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.

To estimate what size system you need, first look up how many kilowatt-hours (kWh) you used last year on your electricity bill.

Divide your yearly kilowatt-hours (kWh) by 1,200 to estimate the kilowatts (kW) you need. For example, the average American household uses 10,791 kilowatt-hours (kWh) per year. That means most U.S. homes need about a 9-kW system to fully offset their energy usage.

Solar tax credits and incentives

The federal solar tax credit lets you lower your income taxes by 30% of your solar installation cost. It’s nonrefundable, so you can only use it up to the amount of taxes you owe that year. If you can’t use the full credit, you can carry the rest forward to future tax years.

Federal tax credit ending soon

President Trump’s “One Big Beautiful Bill,” signed in July of 2025, phases out the federal solar tax credit by Dec. 31, 2025. That means this year is the last opportunity to take advantage of the 30% federal tax credit on solar installations.

The financial case for solar can be made even without the federal solar tax credit. Energy costs are rising faster than inflation in most places. At the same time, solar technology costs have dropped, creating great savings potential.

State, utility and local rebates

Some states and city governments have financial incentives to encourage people to switch to solar. They may not make solar panels free, but they can dramatically reduce the cost of a new solar array installation.

Solar payment and financing options

If you can afford it, buying your solar energy system outright typically provides the highest return on investment. You own the system right away and get any tax credits or incentives.

Loans vs. leases

Taking out a solar loan makes sense for a lot of homeowners. Once you repay the loan, your house basically gets free energy.

Leasing solar panels is another way to get the benefits of solar energy without the high initial cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Similar to leasing, a power purchase agreement (PPA) is another good option if you have limited savings.

Whatever you decide, it’s important to read your contract carefully. Some solar companies put a lien on your house. If you’re not dealing with a reputable company, you could lose your home.

» SOLAR PANELS: Lease vs. buy

Benefits of solar panels

There are two main financial benefits of going solar: reduced monthly electric bills and the potential to earn from net metering credits. It also helps the environment by cutting your carbon footprint, and gives homeowners more overall energy independence.

Financial benefits

• Monthly energy savings: Going solar lets homeowners “lock in the cost of their energy and avoid ever-increasing utility costs,” according to Tim Deters, who works at Green Ridge Solar, a solar company based near Portland, Oregon. With electricity prices increasing around 5% each year, he said, savings add up significantly over time.
• Net metering and SRECs: Net metering lets you send extra electricity to the grid for credit. In some areas, you can also earn Solar Renewable Energy Certificates (SRECs) for each megawatt-hour you produce. This can be extra income, but most people won’t make a lot of money from it.

Better for the environment

Solar energy is a clean way to make power. Once installed, they don’t release greenhouse gases like burning fossil fuels does. They also cut other harmful pollutants like sulfur dioxide. Over 25 to 30 years, solar panels prevent far more pollution than they cause.

For some people, helping the planet is the biggest reason to go solar. “Our primary motivation is sustainability, with a secondary goal of saving some money and avoiding occasional blackouts/brownouts to which our neighborhood has been affected,” Glenn in California told us.

Tim in Florida put it this way: “Your home has ALREADY made its carbon footprint. What better place to put solar than on your home which already exists?”

More energy independence

Solar gives you more control over your power, especially in areas with frequent outages.

“I don’t think people are figuring in the cost of outages,” Ed Hirs, an energy fellow and lecturer at the University of Houston, said. He lives in Houston, where he loses power for at least a week every few years because of a hurricane.

Power outages can be expensive. They can spoil food, disrupt work, and damage comfort and safety. A solar panel system can provide some useful backup, according to Hirs. It keeps your lights on. It keeps your food from spoiling.

“If you’re going to live an average normal life and not have outages and not be in a situation where the price of power off the grid is rising, rising, rising — maybe it will make sense to put panels on for 25 years,” Hirs said.

Expert advice

Hirs thinks everyone who can afford solar panels should be evaluating them against the cost of a home generator. Both are precautionary expenses.

“The tragedy of the situation is if the state and independent system operators (ISOs, RTOs) had been less focused on low prices and more focused on reliability, I don’t think home solar would have grown as much as it has,” Hirs said.

When solar might not be worth it

Solar may not be worth it if your roof has a lot of shade, needs repairs, your bill is under $100 a month or you plan to move soon.

You have roof problems

Solar panels are designed to last 25 to 30 years, so you need your roof to last as long. If you have to replace your roof, do that before you install solar panels. Otherwise, you may have to spend thousands later.

Get your roof inspected, fixed or replaced before going solar.

We often hear from upset solar customers who feel surprised by expensive roof repairs needed after their solar panel installation was complete. For instance, Devin in California found out when a solar company charged them $5,000 to “take the panels down and reinstall them after the roof was replaced.”

Electricity is cheap where you live

If you use little electricity or live where utility rates are low, the potential savings from solar panels are smaller.

Here’s why: Solar panels save money by offsetting what you would have paid your utility. If your bill is already small, the savings will also be small.

Lower savings mean it takes longer to recover the upfront or financed cost of the system. In some cases, the payback period could be 20 years or more, which might exceed the system’s warranty or the time you plan to stay in the home.

You plan to move soon

It takes years for savings to cover the cost of solar panels. If you plan to move in a few years, you might not see much return.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow. But you miss out on some of that $56,065 in average total avoided utility costs over 25 years.

What to watch out for

Some solar customers complain about pushy salespeople and broken promises. Delays, bad utility contracts or faulty equipment are common reasons for frustration.

Unfortunately, some installers just want to make a quick buck and might say anything to close a sale. For example, Mike in Florida told us a sales rep “said there's no upfront cost, which was true. I didn't have to pay any money out of pocket until it was installed. Then I had to pay $70,000, and I had to get a loan for it. So, that was very misleading.”

Real-world examples

Some people end up paying more than expected for electricity. For instance, Jessica in Georgia said a sales rep promised their monthly electric bill would run $10 to $20. “We’ve only had a few bills in that range,” she said. Now, during peak usage months, she has a $156 loan payment on top of a $150 to $170 electric bill. “It's costing me more than before we had solar panels.”

Others have paid for months before the system worked. Derreck in North Carolina. Derreck was upset because he had been paying a large monthly loan for solar panels that were installed late, wired incorrectly and only partially worked. He told us he pays $1,440 per month on the panels and still has a $75 to $1000 light bill each month.

Compare solar companies

The best solar companies have great reviews, clear contracts, reliable equipment and strong warranties.

Bottom line

Your roof could be sitting on thousands of dollars in untapped savings, but only if it's solar-ready. Before you sign any contracts, walk outside. See if your roof gets sun most of the day, has space for panels and won’t need replacement soon.