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Why Solar Panels are Expensive

By: Eric Huesca, SEO Content Writer

January 16, 2023

Solar panels have become incredibly popular in recent times. They convert sunlight into electricity and provide clean energy. Homeowners and businesses can install solar panels to supplement their electricity needs or generate power in a remote locations. What makes solar panels worth investing in is the fact that they are good for the environment.

By switching to solar power, you get to reduce your carbon footprint and create solar panel installation jobs. You can easily install solar panels on your roof to live more sustainably. 

Solar panels on the roof face the backyard.

More and more people are opting for solar panels as they decrease your dependence on the power grid and help you save money in the long run. However, home solar panel costs might seem high at first. But you will come to realize that the cost is justified.


When it comes to the cost of solar panels, you need to know that various materials have to be used and most of these materials tend to be expensive in order to ensure longevity and integrity. Besides, there are around 60 to 72 silicon cells in solar panels. There are electrons within the silicon which move around at an atomic level when sunlight hits them.

Moreover, the silicon has to be adapted to the manufacturing process for improving the available electrons. There is also a need to bond boron and phosphorus to the opposing layers of silicon. The boron ensures a positive charge, while the phosphorus adds additional electrons. These components prime the electrical field so that the panels deliver an effective flow of electrons when sunlight hits the panels. Apart from silicon cells, an encapsulant material, tempered glass, an aluminum frame, a back sheet, and a junction box are required. The panels also need to be refined to improve durability and efficiency.

Even though silicon might be an abundant element and is found in clay, sand, rocks, and water, it can be rather expensive, especially since it is required in great quantity. In order for silicon to be purified, it has to be heated at 1,410° C. The molten silicon creates cylindrical crystals which are extracted to make single crystals.

Now, solar panels can either be polycrystalline or monocrystalline. Unlike monocrystalline solar panel cells which rely on a single silicon crystal, polycrystalline solar panel cells are derived from a blend which makes them less efficient. Modern solar cells use various components in addition to a solar cell. The silicon has to be cut into thin sheets that resemble the width of the paper and a coating is applied for improving sunlight absorption and minimizing reflection. Then, metal conductors are added for facilitating the flow of electrons and are visible as small gridlines. Each cell has phosphorus (negative) and boron (positive) for charging the silicon wafer and instigating the flow of electricity. A Plexiglas sheet is also added for protecting the cells in each panel. There is also an aluminum frame for holding the solar panels together.

It is also worth mentioning that there are different requirements that have to be met for solar panels to be accredited. The fact is that the solar panel industry is heavily regulated. This means that solar panel manufacturers also have to test the solar panels they produce. As the testing procedure can be quite rigorous, it increases the cost of the final product.


The cost of solar panel installation can be rather high due to the amount of work and expertise needed to get the solar panels installed. There are many overhead costs that installers have to bear including labor, paying rent for their office, maintaining their service vehicles, and obtaining insurance. Hence, the overall cost would increase significantly if you add the cost of installation to the cost of the solar panels. To put things into perspective, a typical installation would require a team of at least three laborers who would work around 8 hours to complete the job. Besides, the solar panel installer’s salary is around $43,000 a year on average. Moreover, you would have to factor in the cost of tools used and other equipment. This is why you will need to spend a few thousand dollars on the installation.


Although having solar panels reduces your reliance on the grid once you have installed them on your property, you also need to be prepared to spend money on their maintenance. After all, you have to spend money on maintenance and cleaning if you want them to continue working and saving you money on your energy costs. You should know that there are various factors that have to be considered when determining the overall costs of solar panel maintenance.

As more and more people have chosen to go solar, it has become easier than ever before to get an idea about solar panel maintenance. Most homeowners who have installed solar panels recommend proper cleaning at least two times a year. Otherwise, dust and dirt would gather, and the rain would be unable to wash it away. Besides, your solar panels would take a harder hit if they are installed in a location that experiences infrequent rainfall. However, you should keep in mind that the maintenance and cleaning of solar panels are relatively cheap. There are plenty of professionals out there who provide outstanding service. It is vital that you also get your solar panels inspected by an expert at least once a year. It would ensure that your solar panels have no problems at all.

Moreover, the size and number of solar panels on your property as well as whether the panels are tilted or flat and their location would also influence the overall cost of solar panel maintenance. If you live in an arid and dry region, you will have to spend more on maintenance and inspection. Also, it is possible that the solar panels might require repairs from professionals upon inspection. This is why it is crucial that you look after them. But you should not take on the actual repair as it is something that only an expert would be able to handle. Furthermore, it is vital that you keep an eye on the solar panels to ensure that there is no debris blocking sunlight and preventing them from working at their full potential. Expect to spend over $600 for cleaning and maintenance.

Lowering the Cost of the Solar Panels

If you are on a tight budget or are just looking to lower the cost of solar power, you will be delighted to know that there are various options available. You might have even spoken to a solar panel salesman about how to get a discount on solar panels.

As a homeowner, it is important that you take advantage of the government program for solar panels. The federal residential solar energy credit allows you to deduct a specific amount of tax you pay to the government.  However, you must ensure that the installation of the solar panel system is completed within the same tax year. If the solar panel system was installed in 2021, you would be eligible for a tax credit of 26%. Fortunately, Congress extended the credit and raised it to 30% in August 2022 for installations that are completed between 2022 to 2032. The credit would decrease to 26% for installations that are done in 2023. Then, it will be further reduced to 22% for systems installed in 2034. Congress may not renew the tax credit in 2035 which is why it is best that you cash in on the incentive now.

It is worth mentioning that there is no maximum amount you can claim. In order to be eligible, you have to meet the following requirements.

  • The solar panel system needs to be installed before December 31, 2034.
  • The location of the system should be in the United States.
  • You must either have purchased the solar panel system or financed it through credit. However, you would not be eligible if you decide to lease the system or pay a solar company for purchasing the electricity the system generates.
  • The solar panel system has to be either used for the first time or be new as the credit is only permitted for the original installation.

A great thing about the residential solar energy credit is that it enables you to claim various expenses as mentioned below.

  • The cost of the solar panels.
  • Contractor labor costs for the original installation or onsite preparation including developer fees, inspection fees, and permitting fees.
  • Solar panel equipment such as mounting equipment, inverters, and even the wiring.
  • Energy storage devices with a capacity rating of 3 kWh (Kilowatt-Hours). You must check the latest energy storage device requirements.

Sales tax paid on the expenses incurred for the installation of the solar panels.

In addition to the residential solar energy credit, you might be able to claim a state tax credit as well depending on the state you live in. It will help reduce the cost of installing solar panels. It is a good idea to look up your state laws or consult with a solar panel company to ensure that you do not miss out on a state tax credit.

For those of you who do not have the cash reserves to make an upfront investment and install solar panels, it might be better to lease solar panels. But you should know that leasing solar panels would mean that you would be unable to claim ownership over them. Instead, a third party will own the equipment. The fact is that leasing is different from buying solar panels or opting for a payment plan such as taking out a loan. If you decide to lease solar panels, you would no longer be eligible for incentives and rebates. As you will not have ownership over the system, you will not be qualified for any government rebate.

Furthermore, the property might be harder to sell if you decide to lease solar panels. Even though solar panels help add value to a property, a property that has leased solar panels will prove to be a complicated real estate transaction. It is possible that the new owner might not be interested in the solar panels, or the lease originator would not agree to the sale of the property. Therefore, you would only end up spending more money just to break the contract. Besides, the incentives offered by the government might just be enough for you to be able to purchase solar panels for your property.

To make sure that you have detailed insights into how you can lower the cost of solar panels, you should consider speaking with a solar panel consultant. 

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