Why Are Solar Panels So Expensive?

Solar panels are so expensive because they are made of expensive raw materials like high-grade Silicon and lithium. These materials are required in large amounts along with the expensive installers and protection equipment to make them safe and reliable to use. Their price is also immensely affected by size, brand, location, roof type etc.

The cost of solar power depends upon many factors, and it can vary from one home type to another. The best quality, efficient solar panels are costly because their production is challenging. Similarly, the cost of solar panels would vary for larger homes than for small households.

We have included all the factors that affect the solar panel costs and residential solar installations and a few important tips that help you save money.

Cost Breakdown of Solar Panels

The modern concept of generating your power is undoubtedly appealing, but one must be prepared to spend if he wants to fulfill his desire. The total cost or high upfront costs of solar are almost equal to buying a new car.

The cost breakdown of solar panels includes the cost for manufacture; soft costs include a major portion of the solar price. Structural mounting, using Dc inverters, and last but not least, Installers can cost the rest of the price of solar.

These factors will vary from building to building. The costs of a solar installer also affect the total price of solar. Solar panels are also expensive because of various international and local causes. They can go in the same direction to increase the cost or pull in opposite directions, thus affecting the average cost of solar.

Manufacturing Cost of Solar Panels

Many expensive products are required for manufacturing solar. The first and foremost thing that is needed for solar cell manufacturing is silicon. Silicon is widely available, and it has to be treated in various ways to make it usable in solar panels. The treatment of Silicon is done through high technology-based equipment.

Not only Silicon but inverter is another significant component of solar panel systems. Along with this, lithium batteries are required in case one wants off-grid access to the power generated. These batteries are rare and very expensive, so one of the factors for a high price.

The other materials like copper cable and other metal and glass components also have a good unignorable impact on raising the price. So the solar panel production has a huge share in the price of solar installation. Similarly, when the trading of panels and inverters is made cheaper, or the solar products are made more affordable, it will make the solar installation much more financially lower.

Soft Costs

The soft costs tend to be more localized, being lumped with several factors like local regulations, cost category, building permits, overhead sales and marketing, taxes, renting, profits and purchasing tools. The transport charges are unavoidable. Moreover, different solar panel manufacturers have additional soft costs to cover.

Some solar paneling companies also lump this cost with installation and maintenance. However, some factors can cause the price decrease and will be discussed in the following sections.


Labor costs are almost 8% of the total cost of panels. One must seek the right solar installers to get the job done. This can be a bit pricy, but you can save a few bucks if you hire a local and independent installer. Along with installers, you will require electricians to install and connect the sub- panels.

Not Hiring Local and Independent Installer

Our advice is to go for an independent installer rather than a solar paneling company. These independent contractors can cost you 2X less than the solar installing companies that can promise you an all-in-one solution. Moreover, this will save you money and provide a quality solar energy system without any issues. You have to choose a viable installer, and this will profit you in all manners.

Cost of Structural Mounting

Structural mounting also plays a vital role in installation costs. Almost 11% of the net cost of a solar inverter depends on structural mounting. The solar panel installations on the rooftop require more scaffolding than those on the ground.

Attaching the grid to the roof is more difficult than attaching it to the ground, so it can charge you extra if you choose the location to be rooftop. Usually, the grids that are attached to the rooftop are at an optimal 30-degree angle. This helps the panel to gather enough sunlight.

In general, a large yard would be very effective to create the most efficient ground-based solar system. The mounting will require a solid and concrete foundation for a ground-based solar system to anchor the unit. These ground units are rotatable for tracking the sun.

Rooftop Solar System

As mentioned above, rooftop solar installation is a bit pricy. It also varies with many factors like the optimal angle, the material of the roof, and the condition of the roof. Roof shape also has an impact on this. If the rooftop is flat, it can require a 30-degree optimal angle. If it’s inclined, then the optimal angles can vary.

If the roof is made of tile or slate, then the solar installation would be difficult to cost more. Some solar companies have very comprehensive roofing and solar services. You can get a discount for the cost of rooftop solar bundled services on some companies.

Solar Energy Inverter

Solar energy is renewable energy and is the best way to power residential systems. The inverters will increase safe energy production. You can select the inverter based on the type of your appliances. Most of the household appliances operate at AC. So you will require to convert the DC into AC for safe energy needs.

The type of solar panel you select can immensely vary the rooftop solar panels’ worth. So try to choose a good quality cheap converter because it will not make the panels so expensive but will reduce the annual electricity cost.

Types of inverter

There are three main types of inverters Centralized, Optimizer and string. Out of these three types, the centralized inverter is the lowest in price, and it provides power to the complete system. If you want to improve the power optimizers, then a power optimizer type inverter would be great. They are slightly more expensive than centralized inverters. Similarly, string inverters are costly, and they will render the three-phase variations in the system.

How Can You Lower The Cost of Your Solar Power Installation?

Now that you know why solar panels are so expensive, you can take a few steps to reduce the cost of a solar energy system. Even if you do not exclude the feed-in tariff, you can take some steps to make the solar power system more financially viable. So through this, the consumers can reduce the annual bill of their residential solar power system.

1-Use Federal 30% Investment Tax Credit

It would help if you took good advantage of the federal investment tax credit. It offers for the new solar installations to receive up to 30% of your investment back. This incentive applies to anyone who pays taxes.

As the solar industry comes with a very high initial cost, but there are some ways by which you can cash in the solar incentive. According to this incentive, if you record all your expenses for solar electricity on the tax returns, the Federal Government will qualify for its 30% Investment Tax Credit. Thus making annual savings for home and business owners.

This 30% is very useful for making the solar panel array not sting your wallet. This will make up for your initial investment. This is a huge help for saving initial costs for the solar panel system. This solar federal tax credit is made to incentivize solar companies and lowering the upfront costs so that more solar is available at a Levelized cost.

2-Search for Locat State and Utility Incentives:

Now you don’t have to worry about why solar panels are so expensive because you will get a 26% to 30% credit for each solar panel installation. Apart from federal incentives, there are many state incentives for solar energy systems.

For any local solar panel installation and utility, various incentives are available to reduce solar prices. They can get worth up to thousands of dollars per solar panel system.

3-Find Comparative Deals

In order to reduce the solar system cost, you can look for cheap solar companies to install solar panels. Solar installers can offer many different deals with different solar system prices. You can look for websites that compare the solar panel costs for you.

There are deals that allow you to install the solar cells for free, and then you can pay them over time. You have to search for such valuable deals for installing solar panels and lowering your electric bills and energy costs.

The payback period can be decided according to the tax credits. You can also look for a used solar system in order to provide power and electricity to your house and when the payback period starts you can buy a new one.

In short, net metering and tax credits are best to reduce your electric bill.

4-Start Small

Solar energy production uses the same technology as in the solar cell to convert solar energy into electricity. Based on how much energy savings and net metering you require, you can develop your own installation for producing electricity on a small scale. You can always upgrade afterward.

First, you should start the process on a small scale, and after the payback period has begun, you can upgrade your renewable energy system. The federal tax credit would help you to reduce the final bill of electricity. So start small and then expand afterward.

Solar Energy is so Cheap. Then Why Are Solar Panels So Expensive?

The most important factor for the high price of solar panels is their production equipment. Almost 25% of the charges are for its expensive equipment. The soft costs and its expensive installers make up most of the portion of its price.

Does the Installation Company Affect the Price?

Solar power companies offer many attractive deals incentives to reduce the final price of installation. This can have a positive effect on residential solar power systems. So check for different companies but keep in mind that quality comes with a price.

So check the reviews about the company as the reviews give the idea of the company’s quality. Other than company reviews, you can go for a solar panel calculator for solar reviews

How Much Does it Cost to Maintain a Residential Solar System?

The components can get damaged or wear out with time. Their regular inspections help protect power sources. The companies for solar will cover the warranty claims as their sole responsibility.

The solar company will cost you $250 per year to maintain the rooftop with 10 rooftop solar panels. For a home with 30 rooftop solar panels, it would charge between $450 to $750. A family with more than 30 solar panels needs between $750 to $1000.

Many users clean their own panels to reduce costs to maintain optimal system performance. But you can go for periodic professional cleaner over time.

Is it Expensive to Make Solar Panels?

Solar panel manufacturing requires a lot of investment in production and other materials. The equipment for manufacturing is very costly, and raw materials are very expensive. Similarly, it is not a one-person job, and you will require to spend on the team, so it is pretty expensive to make solar panels.


In short, solar is a good solution, but its installation can be a bit exertive on the budget. However, you can get credit through federal and local tax incentives. It is a good investment and by pinning a few tips to save money and by hiring independent installers for solar you can reduce the final bill for solar.

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