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 …

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Ross Martin

Insurance Writer

  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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Susan Meyer

Senior Editorial Manager

  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

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.[1] As of March 2024, over four million U.S. homes sport solar panels on their roofs.[2]

The reasons for undergoing a solar installation project are many:

  • Environmental sustainability

  • Lower electricity bills

  • Increased home value

  • Tax incentives

If installing solar panels 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

solar panels sustainability


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

  • Photovoltaics (PV): These solar energy systems 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 solar power system. However, because they’re tied to the electric grid, if utilities go out, your solar power does, too.

To address this concern, 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 to supply their energy needs.

Benefits of installing solar panels

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

Environmental benefits

The most obvious benefit is that, by going green and using solar power, you’re reducing your carbon footprint and utilizing clean energy. 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.[3] 

Cost savings

Solar panels may save you money in the long run. By buying them, you’re essentially “locking in” your price for electricity and keeping the average cost of your utility bills more stable. 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.[4] 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. This can longterm cover the solar panels cost and keep your energy costs low.

Tax rebates

Another way to recoup the cost of your solar system: You can also receive multiple tax breaks and solar incentives, most notably the solar federal tax credit, which, in 2024, provides solar panel owners a tax credit worth 30% of the total cost of installation. The Department of Energy has said this amount will decrease to 26% for systems installed in 2033 and to 22% for systems installed in 2034. The tax credit expires in 2035, unless it is renewed.[5] Type in your zip code on the DSIRE website to see the different incentives and policies for your home.[6]

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.

Costs of installation

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. There are calculators available to estimate your longterm energy production costs versus local utility costs to see how long it might take to pay off the cost of solar panel installation.

Location matters

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.

Roof space

If you’re opting for rooftop solar, in addition to the location of your home, you also need adequate roof space depending on your system size. You may need to get approval of your solar setup from your HOA. You also may need to cut back trees to make sure enough sunlight is hitting your panels.

How to add solar panels to your roof

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

1. Research viability of your roof

To start, the Solar Energy Technologies Office has several mapping services that can indicate the viability of solar with your neighborhood and roof.[7] 

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.[8]

2. Research installers

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. Sometimes the original installer of the panel will over warranties or ongoing maintenance plans for new systems.

3. Map out your system

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.[9] Your installer can provide a lot of expertise here in terms of racking, location of panels and also things you might want to add on like battery storage. If you have an electric vehicle, you will likely have higher home energy needs.


Cost of adding solar panels

solar energy hero


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.[10]

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.

Will solar panels work on every house?

According to the Department of Energy, a roof with a slope between 15 and 40 degrees works best, and if it faces south, that is ideal. You also need to consider the age of your roof, its size and shape, and the location of trees or other objects that might block sunlight or potentially cause damage. Having a reputable solar company evaluate your home is the best way to learn if your home would work with rooftop solar panels.

There are also options to place panels on detached structures, such as a garage or shed, or even mount them on the ground.  All of these locations will have different insurance implications, however, so be sure to follow up with your insurance company once you officially decide on a location for the panels.  

The best states for solar energy

It shouldn't be a surprise that the states best suited for solar power are those receiving the most sunlight. Homeowners in ArizonaCaliforniaColoradoFloridaNevada and Texas may be able to utilize solar energy more efficiently compared to folks in other locations. However, solar panels are becoming more popular in all 50 states, and some of the highest producers of solar power are states you may not expect, including Massachusetts and New Jersey.

If you're considering investing in a solar energy system, it's worth checking your individual state's regulations and incentives. Benefits of renewable energy can vary greatly by location, so it's worth looking into the details to see what kind of savings and support you can expect from your home state.

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.