Homeowner’s Guide to Going Solar (2024)

There are two primary technologies that can harness the sun’s power and turn it into electricity. The first is the one you’re likely most familiar with – photovoltaics, or PV. These are the panels you’ve seen on rooftops or in fields. When the sun shines onto a solar panel, photons from the sunlight are absorbed by the cells in the panel, which creates an electric field across the layers and causes electricity to flow.Learn more about how PV works.

The second technology is concentrating solar power, or CSP. It is used primarily in very large power plants and is not appropriate for residential use. This technology uses mirrors to reflect and concentrate sunlight onto receivers that collect solar energy and convert it to heat, which can then be used to produce electricity.Learn more about how CSP works.

Solar panels are built to work in all climates, but in some cases, rooftops may not be suitable for solar systems due to age or tree cover. If there are trees near your home that create excessive shade on your roof, rooftop panels may not be the most ideal option. The size, shape, and slope of your roof are also important factors to consider. Typically, solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs may be suitable too. You should also consider the age of your roof and how long until it will need replacement.

If a solar professional determines that your roof is not suitable for solar, or you don’t own your home, you can still benefit from solar energy. Community solar allows multiple people to benefit from a single, shared solar array that can be installed on- or off-site. Costs associated with purchasing and installing a solar energy system are divided among all of the participants, who are able to buy into the shared system at a level that best fits their budget.Learn more about community solar.

Those interested in community solar can take advantage of a tool from SETO awardee EnergySage. The company'sCommunity Solar Marketplaceaggregates the many available options in one place and standardizes project information, allowing interested consumers to easily locate and compare multiple community solar projects in their area.

There are a number ofmapping servicesthat have been developed by SETO awardees that will help you determine if your roof is suitable for solar and can even provide you with quotes from pre-screened solar providers in your area. In addition to those resources, an internet search can help you find local companies that install solar panels. Because you will likely have many options to choose from, it’s important to thoroughly read reviews of solar companies to make sure you are selecting the best fit for you and your home.

Solar co-ops andSolarize campaignscan also help you start the process of going solar. These programs work by allowing groups of homeowners to work together to collectively negotiate rates, select an installer, and create additional community interest in solar through a limited-time offer to join the campaign. Ultimately, as the number of residents who participate in the program increase, the cost of the installations will decrease.

The National Renewable Energy Laboratory (NREL) developed a tool calledPVWattsfor this purpose. It estimates the energy production and cost of energy of grid-connected PV energy systems for any address in the world. It allows homeowners, small building owners, installers, and manufacturers to easily develop estimates of the performance of potential PV installations, and can even compare solar’s cost to utility bills. These tools are great for getting started, but make sure to work with a solar installer for a custom estimate of how much power your solar energy system is likely to generate.

For its analyses, NREL uses an average system size of 7.15 kilowatts direct-current with a 3-11 kilowatt range. According to SETO awardee EnergySage, that’s enough power to meet all the energy needs for an average home in Austin, Texas.

The amount of money you can save with solar depends upon how much electricity you consume, the size of your solar energy system, if you choose to buy or lease your system, and how much power it is able to generate given the direction your roof faces and how much sunlight hits it. Your savings also depend on the electricity rates set by your utility and how much the utility will compensate you for the excess solar energy you send back to the grid. Check theNational Utility Rate Databaseto see current electricity rates in your area.

Insome cities around the country, solar is already cost competitive with the electricity sold by your local utility. The cost of going solar hasdropped every year since 2009, a trend researchers expect to continue. Not only are the prices of panels dropping, so are the costs associated with installation, such as permitting and inspection—also known as “soft costs.” All of SETO's funding programs are working toward improving the affordability of solar and making it easier for consumers to choose solar.

It should also be noted that energy efficiency upgrades complement solar energy economically. By usingEnergy Starappliances and other products in your home, you’ll need less solar energy to power your home.

Consumers have different financial options to select from when deciding to go solar. In general, a purchased solar system can be installed at a lower total cost than system installed using a solar loan, lease, or power purchase agreement (PPA).

If you prefer to buy your solar energy system, solar loans can lower the up-front costs of the system. In most cases, monthly loan payments are smaller than a typical energy bill, which will help you save money from the start. Solar loans function the same way as home improvement loans, and some jurisdictions will offer subsidized solar energy loans with below-market interest rates, making solar even more affordable. New homeowners can add solar as part of their mortgage with loans available through theFederal Housing AdministrationandFannie Mae, which allow borrowers to include financing for home improvements in the home’s purchase price. Buying a solar energy system makes you eligible for the Solar Investment Tax Credit, or ITC.In December 2020, Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in 2020-2022, and 22% for systems installed in 2023.The tax credit expires starting in 2024 unless Congress renews it.Learn more about the ITC.

Solar leases and PPAs allow consumers to host solar energy systems that are owned by solar companies and purchase back the electricity generated. Consumers enter into agreements that allow them to have lower electricity bills without monthly loan payments. In many cases, that means putting no money down to go solar. Solar leases entail fixed monthly payments that are calculated using the estimated amount of electricity the system will produce. With a solar PPA, consumers agree to purchase the power generated by the system at a set price per kilowatt-hour of electricity produced. With both of these options, though, you are not entitled to tax benefits since you don’t own the solar energy system.

Navigating the landscape of solar financing can be difficult. The Clean Energy States Alliance released a guide to help homeowners understand their options, explaining the advantages and disadvantages of each.Download the guide.

DOE created the Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics to providean overview of the federal investment tax credit for those interested in residential solar photovoltaics, or PV. It does not constitute professional tax advice or other professional financial guidance. And it should not be used as the only source of information when making purchasing decisions, investment decisions, or tax decisions, or when executing other binding agreements.

DSIREis the most comprehensive source of information on incentives and policies that support renewable energy in the United States. It is operated by the N.C. Clean Energy Technology Center at N.C. State University and was funded by the U.S. Department of Energy. By entering your zip code, DSIRE provides you with a comprehensive list of financial incentives and regulatory policies that apply to your home. Additionally, an experienced local installer should be able to assist you in claiming any state and local incentives, as well as the ITC.

If you want to learn more about state and federal solar policies regarding incentives and tax breaks, the Solar Power in Your Community guidebook (PDF) has a section—Appendix A on page 87—that explains it in detail.

Buying a solar energy system will likely increase your home’s value. Arecent studyfound that solar panels are viewed as upgrades, just like a renovated kitchen or a finished basem*nt, and home buyers across the country have been willing to pay a premium of about $15,000 for a home with an average-sized solar array. Additionally, there is evidence homes with solar panels sell faster than those without. In 2008, California homes with energy efficient features and PV were found to sell faster than homes that consume more energy. Keep in mind, these studies focused on homeowner-owned solar arrays.

When it comes to third-party owned (TPO) systems,data showsthat while they add some complexity to the real estate transaction, the overall impacts in terms of sales price, time on market, agreement transfers, and customer satisfaction are mostly neutral. In some cases, TPO systems can even add value.

ThePV Value®tool is helpful for both home sellers and homebuyers. It calculates the energy production value for a PV system and is compliant with Uniform Standards of Professional Appraisal Practice and has been endorsed by the Appraisal Institute for the income approach method. Make sure your appraiser uses this tool to get the most accurate estimate of your PV system’s value.

Absolutely! All solar panels meet international inspection and testing standards, and a qualified installer will install them to meet local building, fire, and electrical codes. Also, your solar energy system will undergo a thorough inspection from a certified electrician as part of the installation process.

A working PV panel has a strong encapsulant that prevents chemicals from leaching, similar to how defroster elements are sealed in a car windshield. Occasionally, a solar panel may break due to weather or other events. According to the International Energy Agency Photovoltaic Power Systems Technology Collaboration Program, any lead and cadmium exposure from broken solar panels in residential, commercial, and utility-scale systems would be below the acceptable limit set by the U.S. Environmental Protection Agency for soil, air, and groundwater.

Residential Consumer Guide to Solar Power– In an effort to make going solar as effortless and streamlined as possible, the Solar Energy Industries Association developed this guide to inform potential solar customers about the financing options available, contracting terms to be aware of, and other useful tips.

A Homeowner’s Guide to Solar Financing: Leases, Loans and PPAs– This guide from the Clean Energy States Alliance helps homeowners navigate the complex landscape of residential solar system financing. It describes three popular residential solar financing choices and explains the advantages and disadvantages of each, as well as how they compare to a direct cash purchase.

Solar PV Project Financing: Regulatory and Legislative Challenges for Third-Party PPA System Owners– Third-party owned solar arrays allow a developer to build and own a PV system on a customer’s property and sell the power back to the customer. While this can eliminate many of the up-front costs of going solar, third-party electricity sales face regulatory and legislative challenges in some states and jurisdictions. This report details the challenges and explains alternatives.

A Beautiful Day in the Neighborhood: Encouraging Solar Development through Community Association Policies and Processes– This guide, written for association boards of directors and architectural review committees, discusses the advantages of solar energy and examines the elements of state solar rights provisions designed to protect homeowner access to these benefits. It then presents a number of recommendations associations can use to help bring solar to their communities.

Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes– This report from Lawrence Berkeley National Laboratory finds that home buyers are consistently willing to pay premiums of approximately $15,000 for homes that have solar across various states, housing and PV markets, and home types.

SEIA Residential Lease Disclosure Form– This form for solar energy leasing companies will help consumers better understand the terms and costs of their solar leases. The form is also designed to help consumers choose among competitive providers.

Residential Solar-Adopter Income and Demographic Trends – This report from Lawrence Berkeley National Laboratory finds that while solar adoption skews toward high-income households, low- and moderate-income households are also adopting, and that the rooftop solar market is becoming more equitable over time.

Learn more about thesolar office's accomplishments.