Solar panels for home: Cost, savings, and making the right decision
Last edited
Author
Andrew Blok
Electrification and Solar Writer and Editor
Editor
Ryan Barnett
SVP, Policy & New Market Development
Odds are you’ve noticed your energy bills climbing up. Maybe you’re looking to join the millions of homeowners who already have solar panels on their roof as a result.
Solar panels can cut thousands of dollars from electricity bills over their lifetime, but not always. How’s that work? Here’s how solar can benefit your home, and how to know when they’ll be a good fit.
See how much you can save by going solar with Palmetto
How solar panels work
Solar panels convert light from the sun into electricity. Materials within the solar panel, known as semiconductors, generate an electric current when exposed to sunlight.
- Photovoltaic cells in the solar panels absorb energy from sunlight.
- The sun’s energy causes electrons to move around in the cells, creating direct current electricity.
- Wires capture that DC electricity from the surrounding cells and move it out of the solar panel.
How much of the solar energy is turned into electricity is determined by the solar panel’s efficiency. Most home solar panels have efficiency ratings over 20 percent.
An inverter modifies the electricity so it can be used by your home and the grid. Electricity moves through the electrical panel and is distributed through your home.
Any electricity you don’t use is either stored in a battery or fed back into the electric grid.
How can solar panels save you money?
How much money solar panels can save you comes down to the specifics of your home, your electricity bill, and local policy. Here’s how solar panels save.
Avoiding utility electricity: Solar panels reduce the amount of electricity you need to buy from your utility.
Bill credits: Electricity you send to the grid can earn you credits through a net metering or net billing policy.
SRECs: In some states, especially in the northeast, solar panels generate solar renewable energy certificates whenever they generate one megawatt-hour of electricity. SRECs can be sold in statewide marketplaces.
Property values: Research shows homes with purchased solar panels generally increase in value.
See how much you can save by going solar with Palmetto
How much do solar panels cost?
The cost of solar panels depends on lots of factors: the system’s, your roof’s complexity, local labor and permitting costs, whether you include a battery, and more.
The best way to nail down pricing at your home is to get a few quotes from reputable sources.
Using estimates from Palmetto installations in the second half of 2025, you can see that savings vary by location.
| State | System size (kW) | Avg. cost of purchase and installation | Avg. price per watt | Avg. estimated monthly savings | Avg. estimated 25-year savings | Avg. Payback period |
|---|---|---|---|---|---|---|
| Arizona | 8.50 | $23,173.00 | $2.73 | $123 | $65,463 | 11.1 |
| California | 6.72 | $19,414.00 | $2.89 | $240 | $105,292 | 6.2 |
| Colorado | 6.40 | $19,117.00 | $2.99 | $128 | $56,197 | 10.7 |
| Connecticut | 9.43 | $27,968.00 | $2.97 | $288 | $126,141 | 7.3 |
| Florida | 10.13 | $27,332.00 | $2.70 | $184 | $80,925 | 10.6 |
| Georgia | 8.93 | $24,814.00 | $2.78 | $103 | $45,416 | 15.8 |
| Illinois | 9.84 | $28,095.00 | $2.86 | $136 | $59,764 | 14 |
| Indiana | 8.51 | $25,475.00 | $2.99 | $126 | $55,151 | 13.8 |
| Kansas | 7.70 | $23,280.00 | $3.02 | $125 | $54,898 | 12.9 |
| Kentucky | 8.51 | $25,475.00 | $2.99 | $104 | $45,857 | 16.1 |
| Maine | 8.50 | $27,148.00 | $3.19 | $223 | $97,675 | 9 |
| Maryland | 9.32 | $26,731.00 | $2.87 | $193 | $84,633 | 10 |
| Massachusetts | 8.54 | $23,715.00 | $2.78 | $273 | $119,805 | 6.6 |
| Michigan | 6.38 | $20,340.00 | $3.19 | $123 | $54,190 | 11.6 |
| New Hampshire | 8.18 | $25,807.00 | $3.15 | $151 | $66,158 | 12 |
| New Jersey | 9.78 | $27,938.00 | $2.86 | $206 | $90,560 | 9.8 |
| New Mexico | 5.95 | $16,951.00 | $2.85 | $127 | $55,737 | 9.7 |
| New York | 8.50 | $20,448.00 | $2.41 | $222 | $97,553 | 7 |
| North Carolina | 8.19 | $22,970.00 | $2.80 | $137 | $60,191 | 11.8 |
| Ohio | 8.19 | $23,379.00 | $2.85 | $130 | $57,246 | 12.5 |
| Oklahoma | 8.20 | $23,815.00 | $2.90 | $89 | $39,199 | 17.2 |
| Oregon | 8.51 | $25,475.00 | $2.99 | $116 | $51,089 | 14.7 |
| Pennsylvania | 7.79 | $21,996.00 | $2.82 | $156 | $68,655 | 10.2 |
| Rhode Island | 7.29 | $23,641.00 | $3.24 | $222 | $97,227 | 8 |
| South Carolina | 7.29 | $17,211.00 | $2.36 | $99 | $43,669 | 12.1 |
| Texas | 9.72 | $27,296.00 | $2.81 | $179 | $78,676 | 10.9 |
| Vermont | 8.51 | $25,475.00 | $2.99 | $173 | $75,864 | 10.6 |
| Virginia | 9.72 | $26,810.00 | $2.76 | $160 | $70,113 | 11.8 |
| Wisconsin | 8.51 | $25,475.00 | $2.99 | $162 | $71,214 | 11.2 |
(Average savings estimates and payback periods are based on real Palmetto installations purchased with cash and loans in the second half of 2025, but do not necessarily reflect the value you would see. Reach out for a personalized savings estimate. Visit individual state pages for methodology and assumptions.)
Paying for solar panels
The most common ways of going solar are paying in cash, getting a loan, and leasing.
Cash: Paying for your panels upfront is the most straightforward since you own the panels outright and avoid paying loan fees and interest.
Loans: Loans let you work toward owning your system with more manageable monthly payments, but interest and fees mean you might have lower lifetime savings.
Lease: Leases and power purchase agreements are two similar ways to go solar without actually buying the system. Under a lease you pay a monthly fee for the panels on your roof, which can reduce your electric bill with the electricity they generate. A power purchase agreement is similar, but you pay for the electricity the solar panels generate.
The Palmetto Energy Plan lets you go solar and skip the upfront cost for predictable monthly payments with options to buy out your system starting in year five.
| Cash | Loan | Lease or PPA | |
|---|---|---|---|
| Upfront payment | Total upfront | Down payment | None |
| Payment schedule | Payment due on system activation | Monthly loan payments | Monthly lease payments |
| Installation included? | Yes | Yes | Yes |
| Maintenance included? | No | No | Yes |
| Length of term | N/A | 5-25 years | 25 years |
| Who owns the solar panels? | You | You | Leasing company |
Solar panel incentives
In some locations, state and local tax credits or rebates are still assisting people who want to buy their panels. Some states offer exemptions from sales and property tax for solar panels, too.
Solar panel leases — which allow you to go solar with no money down — still benefit from federal tax credits. While the credit goes to the leasing company that owns the panels, it can indirectly benefit you by reducing your monthly payment.
See how much you can save by going solar with Palmetto
Do you need a battery?
Homeowners are increasingly installing batteries with their solar panels. Adding a battery costs more, but provides additional benefits, like backup power or, in some cases, additional savings. In 2025, the amount of solar storage installed at homes increased by over 50%, according to the Solar Energy Industries Association.
Depending on the capacity of the installed battery and the electricity demand of the house, batteries can keep at least parts of a home powered up through an outage. In 2024 (the most recent data available), the average American utility customer experienced 11 hours without power, according to the US Energy Information Administration. South Carolinians experienced 53 hours of outages on average, thanks to hurricanes.
In places with weaker net metering policies, battery storage can be a way to avoid even more utility electricity and increase your savings. After California shifted to NEM 3.0, a net billing policy with smaller credits for electricity sent to the grid, 60% of solar installations had batteries, up from 10% before the shift.
Battery leases, like solar leases, swap the upfront cost of purchasing and installing a battery for predictable monthly payments that cover the cost of the battery, installation, and maintenance. Learn more about battery leases with Palmetto.
See what solar can do for you:
Solar panel maintenance
Solar panels can be low maintenance equipment, though you might want to clean your solar panels from time to time. When something does go wrong, it’s best left to a professional, as amateur tinkering can void warranties or create fire risks.
Review your warranties and know who is responsible for repairs. Some companies offer post-installation protection and maintenance plans with extended warranties, proactive monitoring, and speedier service, depending on your level. With a solar lease, maintenance and service is included.
How does net metering work?
Net metering and net billing are two ways utilities compensate you for the solar electricity you send to the grid. You won’t use every electron you generate (and you might not even be home when your panels generate the most). Net metering and net billing generate valuable bill credits from the electricity you don’t use and share with your neighbors.
Under 1-to-1 net metering, any electricity you send to the grid offsets the cost of the same amount of electricity you draw from the grid. If you send 200 kilowatt-hours of electricity to the grid in a month and use 100 kilowatt-hours from the grid, you’d earn a bill credit that would offset 100 kilowatt-hours of future consumption.
Net billing works the same way, but credits are worth less.
Still, each system can be a key source of savings.
Still curious about how all this applies to your home and your electricity bills? Learn more about your home solar options from Palmetto, or get a free savings estimate based on your home and bills today.
See what solar can do for you:
Frequently asked questions
How do I start planning for a home solar power system?
Start by reviewing your electricity bills. If you’re feeling the squeeze of high electricity bills, like a lot of people right now, solar could be able to help. Learning about what solar panels can realistically offer and gathering your questions for the solar installer you’ll eventually work with can go a long way to avoiding a bad solar deal.
How long do solar panels last?
Solar panels typically come with 25-year warranties that guarantee a certain level of performance at that point. Solar panels get less efficient over time but still produce electricity after 25 years.
How much do residential solar panel systems typically cost?
The exact solar panel cost and long-term savings of your system varies depending on several factors, but purchasing in cash can easily cost $20,000, though many systems save more than they cost over their lifetime. Solar leases cost $0 up front. Instead you make monthly payments over the lifetime of your lease; often 25 years.
How long does it take to install a residential solar power system?
The actual solar panel installation will only take a few days of work on average, but getting to that stage can take weeks, and sometimes months. Much of that time is spent designing the system and getting the necessary permits and approvals from your local government and your utility.
Do solar panels require maintenance?
Solar panels typically require very little maintenance. Most solar panel manufacturers include solar warranties of up to 25 years. A solar panel maintenance plan may also cover labor costs for any needed repairs.
Can I install solar panels myself?
In limited cases you may be able to install solar panels yourself. If your panels are going to connect to the grid, you may not be legally allowed. Residential solar systems typically require permits and other paperwork, not to mention technical electrical work, that are best left to professionals.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
