Solar 101: The Basics of Solar Energy
Let’s start by covering the solar power basics. We’re going to give you a brief overview of solar panels 101 and everything that goes into a solar project — including costs, projected savings/ROI, system design, incentives, and installation.
And if you want to get past solar 101 and learn more, you’ll find additional resources linked in each section.
The Solar Power 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 bills 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 power 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.
Your Guide to Going Solar
This free solar 101 eBook covers everything you need to know about going solar. It’s practically a beginner’s guide to going solar that will show you how to design your system, calculate your solar payback period, and expertly navigate the permitting and installation process.
Different Solar System Types
In general, there are three different solar system types. Which one would be suitable for your home or business depends on several factors. To gain more insights and make an educated decision, check this comparison of solar system types.
Grid-Tie Solar System
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.
Grid-Tie + Backup
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.
Off-Grid Solar 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.
Solar 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?
Follow this guide 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. If you don’t know where to start, check our comprehensive Solar Components 101 guide 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 a premium price, or save on installation costs by assembling a DIY solar kit yourself.
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.
On the other hand, 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.
Cost of Solar Panels
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.
According to NREL, 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.
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.
Solar Panel 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.