Solar 101: The Basics of Solar Energy

Solar 101: Introducing the basics of solar energy

Let’s start by covering the basics of solar energy. This page will give a brief overview of everything that goes into a solar project ‒ including costs, projected savings/ROI, system design, incentives, and installation. Each section links to additional resources if you want to learn more about a particular topic.

Solar Power: The Basics

The invention of solar panels brought about a way to harness the energy from the sun and convert it into electricity that can power our homes and businesses.

While solar has always had a (well-deserved) reputation for being environmentally friendly, more recent technology advancements have made solar a sound financial decision as well. Homeowners who replace their utility bill with solar power typically pay off their system costs within 7-12 years. Since solar panels are warrantied for 25+ years, going solar can save you (tens of) thousands of dollars in energy bills over the life of your panels.

Solar is rapidly gaining popularity as a way for homeowners to reduce their electric bills and contribute to a greener future. Let’s look at what it takes to go solar.

Beginner's Guide to Going Solar

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System Types

To learn more, read this comparison of the three main types of solar power systems. Here’s a quick summary:

Grid-Tie Solar

Grid-tie homes with solar

The majority of homeowners opt for a grid-tie solar system. If you have access to the utility grid, you can store energy in the grid so you don’t have to buy a local battery bank. This is the most convenient and cost-effective way to go solar.

Browse grid-tie solar kits in our shop.

Grid-Tie + Backup Power

A solar panel kit with a backup power bank

Because grid-tie systems hook into the utility grid’s infrastructure, they’re still vulnerable to power outages. You can add a local battery bank to your system to provide backup power in case of outages.

Browse backup power kits in our shop.

Off-Grid Solar

Off-grid solar panel system

Off-grid solar is designed for remote properties with no access to the utility grid. These are fully self-sufficient systems designed to withstand the rigors of daily use. Since there’s no grid power to fall back on, off-grid systems are typically paired with a gas generator to provide backup power for off-grid properties.

Browse off-grid solar kits in our shop.

Cost of Solar

The cost of solar can vary greatly depending on system type, components, and your approach to installation (DIY vs. hiring a professional installer).

Grid-tie solar equipment ranges from $1.25 to $1.75 per watt, while local installers will typically charge $1 to $1.25 per watt to install your system.

National solar installers charge a premium for full-service design and installation services: you can expect to pay upwards of $4 per watt to go solar with a national installer. (Source: NREL 2021 Solar Industry Update)

Off-grid solar is more expensive due to the addition of batteries (which are the most expensive component of any solar system). Off-grid solar equipment costs range anywhere from $3/watt to $6/watt depending on factors like battery type and storage capacity needed.

Batteries come in a wide range of prices based on battery chemistry, so it’s hard to pin down an accurate estimate. Feel free to browse our off-grid solar kits to benchmark pricing for battery-based systems.

Projected Savings & ROI

The typical grid-tie solar homeowner will break even on their investment less than halfway into the lifecycle of their system. Once you clear the initial payback period (the time it takes to break even on your investment into solar), any future energy savings represent pure profit from your solar panels.

In our solar payback period guide, we explain how to calculate your payback period based on factors unique to you, like local electricity costs and sunlight availability. We’ll also walk you through the calculations to figure out how much money you’ll save on electric bills over the 25+-year life of your panels.

System Design

There are several factors that go into the design of a solar power system. First, you should ask three key questions to see if solar is right for you:

  • Do you own your home?
  • Does your home have a South, West, or East facing roof?
  • Are there trees or other obstructions shading your build space?

Click here to learn how to determine if your home is a good fit for solar.

Next, you’ll need to size out your system based on your energy usage patterns and the amount of sunlight available in your area. The sizing process is different for grid-tie and battery-based systems, so we wrote guides for both:

Finally, you’ll want to pick the right system components that best meet your energy needs. Take a look at our Solar Components 101 page for help evaluating the best solar panels, inverters, and batteries for the job.

Solar System Installation

There are two main approaches to installing your system. You can hire a full-service installer at at a premium price, or save on installation costs by assembling a DIY solar kit yourself.

A DIY solar panel installation

Both approaches have their pros and cons. Hiring an installer removes the burden of managing your solar project, which is great for people who are too busy, not physically capable, or just not interested in taking on a DIY project.

DIY solar panel installation is appealing because it can save a tremendous amount of money on labor costs. The typical American home may pay $6,000-$8,000 in installation costs alone ‒ money that can be pocketed if you install your own system. Opting for a DIY approach can knock 3-5 years off your payback period, allowing you to turn an even greater profit from your investment.

Solar installations typically require at least 2 people and take 2-3 weekends to complete. If you feel comfortable wiring an electrical socket and climbing on your roof, you should have what it takes to install your own system. Our customers who go this route receive a customized installation guide with step-by-step instructions on how to install their system.

Next: Types of solar systems >>

Solar Resource Hub: Table of Contents

Solar Energy Basics

Why Go Solar?

Guide to Going Solar

Cost of Solar

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