Solar Panel Installation: Cost Breakdown - Your Comprehensive Guide

August 25, 2023

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Are you looking for a solar panel installation cost breakdown? While solar panels offer excellent benefits for any property, it’s good to know your expected installation costs. This allows you to budget for installation or know if you need to consider a loan.

A solar panel installation cost breakdown includes:

  • The panels themselves
  • The racking system
  • Solar inverters
  • Other solar features
  • Labor and installation
  • Permits
  • Extra design and engineering
  • Add-ons

To find out more about each of these components, keep reading! Also, remember that solar panel installation costs vary according to area and fluctuate often. In many cases, solar panels are getting more affordable every year!

Lastly, a solar panel installation contractor can also explain your expected costs. They will usually base a quote on your property’s size, your energy needs, and budget. They can also help you understand your expected cost savings with a solar installation.

solar panel installation cost breakdown

Solar Panel Installation Cost Breakdown Details

The cost of solar panels depends on their various components. Additionally, you might not need certain add-ons for your array to work effectively.  Check out a quick solar panel installation cost breakdown:

  • Solar panels - $2.50 to $3.50 per watt, depending on efficiency and capacity
  • Inverters - $1000 to $1500 for a central inverter
  • Racking and mounting - $2000 to $4000, depending on type and complexity
  • Labor and installation - $5000 to $10000, major cost factor, typically includes system design, permitting, and physical installation
  • Other solar components - $500 to $2000 depending on the amount needed; Costs for wiring, conduit, switches, etc
  • Permits and inspections - Can range from $1000 to $2500, especially for large commercial installs
  • Design and engineering - $500 to $2000 for consultation fees
  • Additional equipment:
    • Battery storage - $5000 to $10000
    • Monitoring systems - $500 to $2000
    • Warranties - $100 to $500

Total cost - Residential solar installation often ranges from $15,000 to $25,000 before incentives but varies by system size, location, and components needed.

In summary, the main costs are solar panels, labor, racking, inverters, and any additional equipment. Permits, design, engineering, and other components make up smaller portions. Getting a professional estimate is recommended for cost specifics.

Solar Panels (Modules)

The solar panels themselves make up a significant portion of the cost. The price varies depending on the brand, efficiency, and capacity of the panels. Higher-efficiency panels tend to cost more but can produce more electricity in the same amount of space.

Solar panel output is typically measured in watts. You might pay $2.50 to $3.50 per watt for your solar panels. This price varies according to the panel’s quality and expected lifespan.


Solar inverters convert the direct current (DC) electricity generated by the solar panels into the alternating current (AC) electricity used in your home. Inverters can be central (one for the entire system) or microinverters (one for each panel).

Microinverters tend to be more expensive but offer advantages like individual panel performance monitoring. In most cases, you can expect to pay $1000 to $1500 for a central inverter.

Mounting and Racking

Mounting and racking systems are the hardware used to install solar panels securely on your roof or ground. Their cost can vary based on the type of mounting system used and the complexity of the installation. For example, contractors often have more difficulty working on steep roofs. In turn, racking systems for these roofs are often more expensive.

Additionally, you can choose between a few mounting and racking systems for your property. Fixed systems stay in one place and are typically the least expensive. Adjustable, as the name implies, allows you to change the panel tilt. This allows you to adjust them on cloudy days or as the sun moves across the sky.

Tracking systems move automatically according to the sun’s position. These are typically the most expensive but also mean the highest energy output. They also mean not having to manually adjust the panels when needed!

Labor and Installation

Professional installation is a significant portion of your solar panel installation cost breakdown. This includes labor for designing the system and obtaining necessary permits. These are done before your contractor physically installs the panels and connects the system.

Also, your labor costs go up if you include specialty features on your system. For instance, special mounts can add to your labor costs. Your contractor also needs added time to install batteries, if you decide on a solar battery storage system.

Other Solar Features

Other solar features, sometimes called Balance of System components, are additional materials needed for a functioning solar system. These components include wiring, electrical conduit, switches, breakers, and the like. These all connect solar panels to your home's electrical system. Their overall cost depends on how many you need, quality of wiring, and so on.

Permits and Inspection Fees

Installing solar panels typically includes obtaining permits and scheduling needed inspections. Permit costs can vary depending on your location and the complexity of the installation. In some areas, there are limits to these permit fees, usually $1000 to $2500 for large commercial projects.

Design and Engineering

Most solar installation companies need to design a solar panel system specific to your property. In some cases, they might also consult with an engineer. For example, an engineer can ensure that a large-scale solar system is safe, efficient, and compliant with local regulations. They might also need to ensure an older structure or one with a steep roof is safe for solar installation.

Additional Equipment

Depending on your solar goals, you might need additional equipment for your solar array. This includes items such as battery storage systems or specialized monitors. You might also want to purchase an extended warranty for your solar panels.

a solar installation contractor

Why Are Solar Panels Expensive to Install?

After looking at your solar panel installation cost breakdown, you might wonder why solar panels are expensive to install. These costs cover the technology itself, the panel installation, and other expenses such as permits. Check out some of those costs in greater detail:

  • The solar panel technology and materials used in manufacturing is often costly. High-quality photovoltaic (PV) cells, which convert sunlight into electricity, are one of the most expensive aspects of solar installation.
  • Also, note that the design, permitting, and installation of solar panels all require skilled labor. A solar installation contractor needs expertise in electrical systems, roofing, and structural considerations. These labor costs vary based on location and complexity of the installation.
  • Specialized mounting and racking systems are also costly for solar panel installation. These components ensure the panels are secure and positioned to maximize sunlight exposure. Lastly, inverters can also add significant cost to your solar array.

How Long Does It Take for Solar Panels to Pay for Themselves?

The time it takes for solar panels to pay for themselves, or the "payback period," varies widely. You would need to consider the cost of the solar system, local electricity rates, available incentives, and your energy consumption.

On average, the payback period for residential solar panels is often around 5 to 10 years. However, it can be shorter or longer depending on the specific circumstances. For instance, higher upfront costs, such as installation costs, will generally mean a longer payback period.

Also, the amount of electricity your household uses directly affects how much money you can save with solar panels. The higher your energy consumption, the more you stand to save on your electricity bills. Additionally, your electricity costs are a crucial factor. If electricity rates are high, your savings from generating your own solar energy will be greater, shortening the payback period.

Government incentives, such as federal tax credits or state rebates, can significantly reduce the upfront cost of solar panels. These incentives can help shorten the payback period. If your utility offers net metering, excess electricity generated by your solar panels can be fed back into the grid. In turn, you can potentially earn credits that further reduce your electricity costs.

A Word From Our Solar Installation Crew

Go Solar Florida State is happy to provide this general solar panel installation cost breakdown. Hopefully you found it useful! Also, you can call our Florida solar panel installation contractors when you’re ready for a FREE price quote. We’re happy to answer your questions and get your property started on clean, green solar power.


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