What to know about adding solar panels to your home

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Joey Held

As a writer, Joey Held has specialized in business, marketing, sports, music and insurance topics for more than a decade. He's also a podcaster …

Solar power is becoming a more popular form of energy for houses throughout the United States. Though supply chain logistical challenges have slightly slowed adoption, one in every 600 U.S. homeowners is installing solar each quarter.

If solar is something you’ve considered, it’s important to know the ins and outs of how it works. Read on to see why you might want to install solar panels at home, how to add them, the costs of installation and how they can impact your insurance.

How solar panels work

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Solar panels take energy from the sun and turn it into electricity. There are two main technologies that make this happen:

  • Photovoltaics (PV): These panels are the more common ones on rooftops. The sun shines on a solar panel. The panel’s cells absorb photons from sunlight to create an electric field across the solar panels, generating electricity.
  • Concentrating solar power (CSP): This method uses mirrors to reflect and aim sunlight onto receivers. Once the receivers have collected enough solar energy, they convert the energy into heat, which in turn produces electricity. CSP is only used in massive power plants, not residential homes. 

Most early panels were grid-tied systems, which are the cheapest type of solution. However, because they’re tied to the electric grid, if utilities go out, your solar power does, too. To address this, more homes are exploring hybrid solar systems. These setups are connected to the utility grid but also include a solar battery to serve as a backup when the power is down or there’s not enough sunlight.

Benefits of installing solar panels

Solar panels can offer several benefits to you as a homeowner — and to the world at large.

The most obvious benefit is that, by going green and using solar power, you’re reducing your carbon footprint. The National Renewable Energy Laboratory PVWatts Calculator has a solar energy calculator to discover location-specific savings, but the typical home solar PV system could save 1.3 to 1.6 tons of carbon every year. 

Solar panels may save you money in the long run. By buying them, you’re essentially “locking in” your price for electricity. The electric rate tends to grow every year, while solar pricing has gone down. Additionally, there’s a utility program in most states called net metering. Through this program, you can sell excess solar electricity from the day back to your utility company at the same rate of buying electricity at night. 

You can also receive multiple tax breaks by using solar energy, most notably the federal solar tax credit, which, in 2022, provides solar panel owners a tax credit worth 26% of the total cost of installation. Type in your zip code on the DSIRE website to see the different incentives and policies for your home.

Drawbacks to solar panels for home use

While solar power provides plenty of benefits, it’s not a flawless system. Before installing solar panels on your home, consider these potential drawbacks.

Though costs have decreased over the years — and will likely continue to go down — installation and ongoing maintenance of solar panels can be fairly costly.

As the name suggests, solar panels also work best with homes that receive good amounts of sunlight throughout the year. If you live in an area with lots of tree shade or harsh, cloudy winters, you may not generate enough solar energy to comfortably power your house. Even in areas with significant sunlight, you’ll still have to account for about 25% of your energy coming from other sources.

Finally, some of the tax breaks for solar-powered homes no longer exist or may be going away in the future. The federal solar tax credit drops to 22% in 2023 and expires entirely by 2024. Check with your local government to see which ones still apply to you.

How to add solar panels to your roof

Think you might want to try solar panels? Here are the steps to take.  

To start, the Solar Energy Technologies Office has several mapping services that can indicate the viability of solar with your neighborhood and roof. 

Alternatively, explore solar co-ops and Solarize campaigns. Rather than going it alone, you can join together with groups of homeowners to negotiate rates, select the right installer and generate buzz about solar throughout the neighborhood. If more neighbors participate in a solar program, it reduces the overall cost of installation for everyone.

According to the U.S. Office of Energy Efficiency & Renewable Energy, solar panels work best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs may be suitable.

Next, figure out how many solar panels you need. Most homes require about 20-25 solar panels, but that can vary based on the location of your home, personal energy consumption habits, and panel power and efficiency. EnergySage offers a more in-depth guide to determine the total number.

If you decide solar is right for you, you’ll work with a professional that’s certified to install solar panels on your roof. This is not a case of DIY vs. professional; while solar companies are working on more easily attachable panels, they aren’t available to purchase right now. Until they are, use a professional to ensure everything is set up correctly. Much like with comparing insurance, don’t be afraid to shop around for the best quote and financing options for you.    


Cost of adding solar panels

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Per the EnergySage Marketplace, homeowners pay an average of between $17,538 and $23,458 to install solar panels. This factors in the federal solar tax credit you can receive for the installation.

Beyond the panels themselves, you’ll need a few other supplies to keep your panels running smoothly. An inverter turns direct current from the panels into alternating current for use within your home. You may install and maintain a meter to show you how much power you’re using. Cables, wiring gear, and batteries are also a likely cost (and will eventually need to be replaced), and the panels must be cleaned regularly.

While the upfront cost is high, solar panels are a long-term investment. With the savings on energy bills and heating costs, most homeowners will break even after about seven or eight years. Since solar panels last 25 to 30 years, that potentially means decades of discounts on your solar panels.

How adding solar affects your insurance

Most insurance companies will cover your solar panels. Assuming the panels are attached to your home, they’ll fall under the dwelling portion of your homeowners policy, providing coverage to damage (assuming the damage is also covered by your insurance company).

However, if the solar panels are attached to the ground or on another surface that isn’t connected to your home, you may have to purchase additional coverage. In the event your roof gets damaged during installation, your insurance company likely won’t cover those costs, so be sure to only work with licensed and experienced installation crews.

Finally, because solar panels add value to your home, you may see your monthly premiums increase. You might also need to increase the value of your insurance policy to ensure everything is covered in the event of damage.

Going solar isn’t for everyone. But for some homeowners, it’s an attractive option. It could potentially lead to long-term savings and a positive impact on the environment. And that’s bringing joy to the neighborhood.