How Much Do Solar Panels Cost?
Solar panel installation costs depend on several factors —including system size and financing. But homeowners can reduce their overall investment costs through available incentives and programs.
Between various financing options and incentives, a home solar system is within reach for most homeowners.
Check out NYSERDA’s Residential Interest Rates map to see if you’re automatically eligible for lower interest financing based on location.
Schedule a CallA New Way to Save on Solar System Costs
Although the Residential Solar Investment Tax Credit has ended, a new option offers similar savings for qualifying projects beginning construction by July 4, 2026.
Through a lease-to-own solar program available via our partnership with Greentech Renewables, your home solar project can benefit from federal tax credit savings comparable to 30% of system costs — without the headache of delayed rebates or refunds.
What that means for you:
- Lower project costs
- Predictable monthly payments
- Long-term ownership of your system
This program launches soon and is available for qualifying projects that begin construction by July 4, 2026.
Financial Options for Solar Panels
Here are the ways you can save on solar panels:
NYS TAX CREDIT
New York State will provide a 25% income tax credit up to $5,000 that can be used until fulfilled. Excess credit may be carried forward for five years.
For more information on how to claim your incentive, read our article.
NYSERDA
New York State’s Energy Research and Development Authority (NYSERDA) will provide a cash incentive currently paying $0.20 per watt for residential projects, and $0.25 per watt for small commercial projects under 750kW in size.
Incentives vary for projects 200kW and larger. Call us today to find out more if you have a larger than 200kW project. Incentives will reduce periodically, as funding is committed and are subject to change.
For more information, visit NYSERDA’s NY-Sun Solar Program page.
Purchase Outright
This is by far the most attractive return on investment, especially if you borrow to finance the system. Generally, the savings generated will be much larger than the cost of the money borrowed.
Purchasing a system qualifies customers for all rebates, tax credits, and revenue from Solar Renewable Energy Credit (SREC) sales, and significantly increases the property value of your home.
Loans
CIR works with a variety of lenders for bridge loans for your residential tax credits, and with other financial institutions for the net cost of your project. We are able to offer low-interest loans, some with longer terms, to make payments less than what you’re currently paying for your electric bill.
Please contact us today for a more specific breakdown.
Power Purchase Agreement (PPA)
A Power Purchase Agreement (PPA) is a contract between you and a third-party company that owns, operates, and monitors solar equipment. PPAs are ideal when you can’t utilize federal and state tax incentives. Common projects include churches, schools, and municipal buildings.
PPAs offer long-term savings with little to no upfront cost, including system monitoring, maintenance, and a low, fixed energy cost. They protect against inflation and rising electric rates while providing a production guarantee.
Rural Energy for America Program
Renewable Energy & Energy Efficiency Funds can be used for purchasing, installing, and constructing renewable energy systems, like solar generation. The USDA offers loans covering up to 75% of eligible project costs and grants for up to 25%, with terms between $2,500 and $500,000.
Applicants must cover 75% of costs if only applying for a grant or 25% if applying for a loan or loan and grant combo. Projects over $200,000 need a technical report, and energy efficiency projects require an energy audit or assessment.
MACRS Accelerated Depreciation
Qualifying solar energy equipment can be recovered over five years. When claiming an Investment Tax Credit (ITC) grant, the depreciable basis must be reduced by half the value of the 30% ITC, allowing an 85% deduction of the tax basis.
Depreciation is the loss of value over time from usage. Business owners can deduct this “loss in value” from taxable income when used for business purposes. Demonstrating that solar power is for business use can significantly reduce your taxable income.
Low to Moderate Income
Affordable Solar, part of the NY-Sun initiative, targets low-to-moderate income (LMI) households. Eligible participants receive double the current NYSERDA incentive, capped at 6 kW.
Income guidelines vary by county, qualifying those below 80% of the area or state median income. An electricity efficiency assessment is required to identify necessary lighting or heating/cooling upgrades before installing the solar system.
How Long Does it Take to Break Even on Solar Panel Investment?
The amount of time it takes for your solar-generated energy savings to match the expense of installing solar panels is entirely dependent on a variety of factors, such as how you finance your solar installation, available financial incentives, and how large your system is. Most systems break even in about 7-10 years and are warranted for at least 25 years.
Here’s an example to help you calculate your solar payback period using current financial incentives:
Combined Costs
First, we’ll determine your combined costs. you’ll need to know the gross cost of your solar panel system.
Let’s assume the gross cost of your solar system is $20,000. Now, we need to understand the upfront incentives available to you, including the state solar tax credit and local rebates or incentives. Given that the ITC is currently set at 30%, with a $20,000 solar system, you’ll be eligible for $6,000. Now, let’s also assume you can take advantage of an additional $900 in local rebates – this brings your upfront incentives to $6,900 and your combined costs to just $13,100
Gross cost ($20,000) – upfront incentives ($6,900) = combined costs ($13,100)
Annual Benefits
To calculate your annual benefits, you’ll need to know how much you’re saving each year on electricity costs.
Let’s assume your monthly electricity bill is about $100 – annually, that amounts to $1,200 in avoided electricity costs assuming your system covers 100% of your electricity needs. You’ll also need to know how much you’ll receive from other incentives each year, like SRECs. In our example, we’ll assume you’re earning $500 annually from selling SRECs – this means you’ll receive $1,700 in annual benefits.
Avoided annual electricity costs ($1,200) – annual incentives ($500) = annual benefits ($1,700)
Final Calculation
Now, to calculate your solar payback period, you just need to divide your combined costs by your annual benefits!
Combined costs ($13,100) / annual benefits ($1,700) = solar payback period (8.1 years)
In our example, your payback period would be 8.1 years – pretty close to the 8.7 year average on EnergySage!
Customer Reviews
What Our Clients Think
“Darren and his CIR team did a fantastic job on our smaller 3kW project. We saved money on our electric bill in the first month and our ROI is under 7 years. Installed in 2018 it is quietly saving every month. We have several months where we only pay for the mandatory connection and distribution fees. The key to a successful project with quick payback is conservation. Darren will walk you through all the details.”
“The installation process was great. The workers were very nice and respectful of my property. With solar panels, my electric bill is less than $18 a month even during the summer with air conditioning. The entire process was painless.”
FAQ
Looking for Solar Financing Answers?
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Is Solar Worth It in NY?
Yes! Solar Panels are an incredible investment. They raise the value of your home and save money on your utility bills, which can return great dividen
Need more answers? Contact us today.
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What Will My Electric Bill Look Like After Getting Solar Panels?
You’ll still receive an electricity bill each month from your utility company as long as you’re connected to the grid, even if your total amount due may be zero.
Need more answers? Contact us today.
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How Much Money Does Solar Save Each Month?
Total savings will depend on current energy costs and how much energy you consume in a given month, which may vary seasonally as you use more or less air conditioning, lighting, and so on. Here’s an example: The average U.S. household uses 893 kWh each month. The national average cost of electricity in November 2021 was 14.12 cents per kWh. Assuming your system covers 100% of your electricity needs, in this scenario you’d save an average of $126 each month on avoided electricity costs.
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Can I Get Solar Panels for Free?
Maybe! Check this resource.
Learn More About Saving Money with Solar Panels
Are you looking for more information about financing your solar system? Check out our helpful resources below.
