People always ask why solar panels are so expensive? People should realize that nothing good comes easily.

Why Are Solar Panels So Expensive

Many of the wealthiest investors have had to wait a long time before their investments bore fruit. The same is true for solar panels. There are a lot of equipment costs, labor for installing, and other costs that go into the process to have solar that homeowners don’t always realize.

We will look at why solar panels are so expensive in this Solar Panel Cost Breakdown Guide. Hardware, labor and overhead for solar paneling companies will be considered. In the end, we hope this will help you decide if you can afford to go solar.


Solar Panel Cost Breakdown

Are solar panels expensive compared to other high-tech systems? The first photovoltaic (PV) solar panels were created in 1839 by French physicist Edmond Becquerel. So, solar rooftop systems remain a relatively new technology – developed within the past century.

Sure, generating your own energy is a great homeowners concept, but making your dreams come true could take some planning and a little money. The initial up-front costs for solar are comparable to buying a new car.


Here is a Solar Panel Cost Breakdown by factor percentage:

  • Soft Costs = 49%

  • Hardware Materials = 25%

  • Labor = 8%

  • Structural Mounting = 11%

  • Inverter = 7%

Of course, each of these factors will vary dramatically based on the building, installer and homeowner. There are both local and international causes for higher prices. At times, these factors are pulling solar panel prices in opposite directions.

On the one hand, international trade competition is making the hardware – solar panels and inverters – cheaper. Cheaper solar products have made more home installation projects financially viable.

On the other hand, soft costs will tend to be localized. Local regulations, building permits, rents and tax incentives create local price ranges for solar panel installation.

If you want to make your solar more affordable, then you need to cut costs for each factor. And, we will explain how you can do this.


Construction Soft Costs

We have lumped a number of factors into the construction soft costs category, including overhead, sales & marketing, permitting, profits, renting, purchasing tools and running a fleet of vehicles. Of course, different solar paneling companies will have different expenses to cover.

Construction Soft Costs

Some solar companies will try to bundle manufacturing, installation and maintenance. These are the cases when a 3 x markup is most likely. This could move a solar installation cost into the $15,000 to $30,000 range.


Hardware Materials

There are 1st, 2nd and 3rd generation solar panels. Naturally, the more efficient solar panels will be more expensive.

Chinese Standard Solar Panels

By one estimation, cheap Chinese solar PV panels have led to an 80% price drop. Chinese workers are paid lower wages and there are fewer regulations. This has dramatically lowered standard solar costs, but now the United States Congress is planning on leveling a “feed-in tariff”, which will increase the price.

One solar panel manufacturing technique uses cerium oxide to increase the UV absorbing properties of glass modules. Unfortunately for the solar power industry, cerium oxide is an expensive rare earth mineral, according to Mother Earth News. While China only controls 30% of rare earth minerals, it controls 90% of the market.


The average solar system installation project might include the following labor costs: 3 x workers at $25 per hour for 8 hours = $600 plus tools and transportation expenses for a $1,000 total. Moreover, you might also need to hire electricians to install sub-panels.

Hire Independent Installer

Instead of choosing solar paneling companies offering an all-in-one solution, you might hire your own independent contractor. These independent contractors might charge you about $1.00 per watt for installation compared to $3.50 per watt on average.


Structural Mounting

Many homeowners forget about the 11% cost for structural mounting onto your rooftop or in your yard. The solar rooftop systems require the addition of scaffolding to attach the units to the rooftop at the optimal 30-degree angle.

Generally, a large yard can be used to create the most efficient ground-based solar system. The ground mounting system might require a concrete foundation and solid anchors to keep the unit in place. These ground units can rotate to track the sun as it moves across the sky.

Roof Features

However, the cost of rooftop solar installation will vary dramatically based on your angle, material and condition. For example, a flat roof might require a special 30-degree scaffolding to be added. Solar rooftop systems might also be more difficult to install on tile or slate.

Some solar companies are offering comprehensive roofing and solar services. Ask for a discount to lower the cost of rooftop solar bundled services.



The inverter will provide your home with safe electricity. Safe electricity changes the DC to AC (your home appliances operate on AC). Choosing the cheapest inverter type could save you money.

These are the 3 main types of inverters:

  • Centralized
  • Power Optimizer
  • String

The Centralized Inverter works on the whole system. Of all of these inverter types, this is the cheapest.

The Power Optimizer Inverter can improve performance.

String Inverters offer 3-phase variations and remote monitoring.


Federal 30% Investment Tax Credit

The Federal Government has tried to make it easy for home and business owners to qualify for its 30% Investment Tax Credit (ITC). You simply need to record your costs for solar panels on your tax returns. Fill out the IRS Form 5695 – “Residential Energy Credit” – you can qualify if your solar is used for electricity or heating purposes.

Taking off 30% from your initial costs for solar panels can be a nice incentive. Defraying the up-front costs makes you feel better about your initial investment.


Start Small

You might want to simply start small. Right off the bat, you can lower your energy bill based on net metering solar from your local solar power utility. The solar power utility will subtract the energy generated from your home energy usage based on net metering solar principles.

Eventually, the homeowners concept can upgrade with various solar products by reinvesting your energy savings. The best homeowners concept adds capacity as you go.


Find Special Deals

Find Special Deals

You might also look for special deals. One of the best deals is “Zero Down Solar Installation.” Some solar panel manufacturers and investors have unused equipment and will install it for free. Then, they will allow you to pay for the system over time.

Another option is to look for used solar panels for sale. Find cheap used solar panels for sale and start small. You can always upgrade later.


Becoming Home Solar Power Generator

If you sit down and make a careful assessment of what you are trying to do – becoming a solar power generator – you are in rarefied air. Power home solar means that you can provide electricity to others. That is a very powerful step in increasing your home’s productivity and value.

Remember that your home value will increase with installed solar panels. This could make it stand out if you decide to sell. Your renewable energy investment improves your entire estate.

With power home solar, you can provide the essential energy used to power lights, televisions, washing machines, you name it. In a sense, you should expect to pay more for this valuable power. A century ago, homeowners did not have the ability to generate their own solar power energy. Now, you can.