A step-by-step guide to evaluating, financing, and planning a residential solar panel installation, from roof assessment and system sizing to permits and tax credits.
Last updated:
0 of 32 completed0%
Copied!
Roof Assessment
Check your roof's age and remaining lifespan
Solar panels last 25-30 years. If your roof needs replacement within the next 10 years, do it before installing panels. Removing and reinstalling panels for a roof replacement costs $1,500-$3,000. Asphalt shingle roofs last 20-25 years; metal roofs last 40-70 years.
Determine when the roof was last replaced
Get a roof inspection if it is older than 15 years
Evaluate roof orientation and tilt angle
South-facing roofs produce the most energy in the Northern Hemisphere. East and west-facing roofs produce about 15-20% less. The ideal tilt angle equals your latitude (30-45 degrees for most of the US). Flat roofs work too — installers use tilted racking systems.
Assess shading from trees, buildings, and chimneys
Even partial shade on one panel reduces output for the entire string by 25-80%. Use a solar pathfinder or satellite imagery tool to check shading throughout the day. Trees that will grow taller in 10-20 years should be factored into the assessment.
Verify your roof can support the additional weight
Solar panels add 3-4 pounds per square foot to your roof. Most roofs built to code handle this without reinforcement. Homes with lightweight truss systems or older construction may need a structural engineer's review, which costs $300-$500.
Energy Usage Analysis
Gather 12 months of electricity bills to calculate annual usage
Your annual kWh consumption determines system size. The average US home uses 10,500 kWh per year. Look at the kWh column, not the dollar amount, since rates change seasonally. Most solar calculators need this 12-month total.
Download usage data from your utility's online portal
Calculate total annual kWh consumption
Factor in planned changes that will affect future electricity use
If you plan to buy an electric vehicle (adds 3,000-4,500 kWh per year), install a heat pump (adds 2,000-5,000 kWh), or add a home addition, size your system for future usage, not just current. Adding panels later costs more per watt than installing them all at once.
Determine your target offset percentage
Most homeowners aim to offset 80-100% of their electricity usage. A 100% offset does not always make financial sense if your utility has unfavorable net metering policies. Ask your installer to model different system sizes with corresponding payback periods.
System Sizing and Equipment
Calculate the system size in kilowatts you need
Divide your annual kWh usage by your area's peak sun hours (1,400-1,800 kWh per kW installed, depending on location). A home using 10,500 kWh per year in a sunny climate needs roughly a 6-7 kW system. Panels today produce 370-430 watts each, so that is about 15-18 panels.
Decide between string inverters and microinverters
String inverters cost less ($1,000-$2,000) but a single shaded panel reduces the entire string's output. Microinverters ($150-$200 per panel) let each panel operate independently, producing 5-25% more energy on partially shaded roofs. Microinverters also offer panel-level monitoring.
Evaluate whether battery storage makes sense for your situation
Battery systems cost $10,000-$15,000 installed and store 10-13 kWh of energy. They make financial sense if your utility has time-of-use rates, poor net metering, or frequent outages. Without these factors, batteries add 5-7 years to the payback period.
Compare panel efficiency ratings from different manufacturers
Premium panels achieve 21-23% efficiency while standard panels hit 18-20%. Higher efficiency means fewer panels for the same output — important if roof space is limited. Premium panels cost 10-20% more but come with 25-year performance warranties guaranteeing 90%+ output.
Getting Installer Quotes
Get quotes from at least 3 different installers
Prices for the same system can vary by $3,000-$8,000 between installers. Request itemized quotes showing equipment, labor, permits, and interconnection costs separately. The national average installed cost is $2.50-$3.50 per watt before tax credits.
Research local installers with at least 3 years of experience
Request detailed, itemized proposals from each
Verify installer licensing, insurance, and certifications
Require proof of a state electrical contractor license and $1 million or more in liability insurance. NABCEP (North American Board of Certified Energy Practitioners) certification indicates advanced training. Check online reviews and ask for 3-5 local references.
Compare warranty terms for panels, inverters, and workmanship
Panel warranties should cover 25 years of performance and 12-15 years of product defects. Microinverter warranties typically run 25 years; string inverter warranties run 12-15 years. Workmanship warranties from the installer should cover at least 10 years for roof penetrations and wiring.
Ask each installer about their interconnection and permitting timeline
The time from contract signing to system activation is typically 2-4 months. Permitting takes 2-6 weeks depending on your jurisdiction. Utility interconnection approval adds another 2-4 weeks. Some installers handle all paperwork; others expect you to manage permits yourself.
Financing Options
Compare cash purchase, solar loan, and lease options
Cash purchase gives the best 25-year return (typically $25,000-$50,000 in savings) but requires $15,000-$25,000 upfront. Solar loans offer $0 down with monthly payments often lower than your current electric bill. Leases and PPAs mean you do not own the system and cannot claim tax credits.
Calculate 25-year savings for each financing option
Compare monthly payments to current electricity costs
Claim the 30% federal Investment Tax Credit
The federal ITC reduces your tax liability by 30% of the total system cost, including equipment, labor, and permitting. For a $20,000 system, that is a $6,000 tax credit. You must own the system (not lease) and have enough tax liability to claim it. The credit can be carried forward to future years.
Research state and local solar incentives
Many states offer additional tax credits, rebates, or performance payments on top of the federal ITC. Some states offer $1,000-$5,000 in rebates. SRECs (Solar Renewable Energy Certificates) in certain states add $200-$400 per year in income. Check your state energy office's website.
Permits and Net Metering
Apply for building and electrical permits
Most jurisdictions require both a building permit and an electrical permit for solar installation. Permit costs range from $200-$500 combined. Some cities have streamlined solar permits that approve within 3-5 business days. Your installer typically handles the application.
Check local permit requirements with your building department
Confirm whether your installer handles permit applications
Check HOA rules and submit architectural approval if required
Many states have solar access laws that prevent HOAs from banning panels entirely, but they can regulate placement and aesthetics. Submit your plan to the HOA architectural review board early — approval can take 30-60 days. All-black panels satisfy most HOA design requirements.
Apply for utility interconnection and net metering
Net metering lets you sell excess solar electricity back to the grid at retail rate, spinning your meter backward. Not all utilities offer full retail net metering — some credit at wholesale rates (50-70% less). Apply for interconnection before installation begins, as utility approval can take 2-4 weeks.
Schedule the final inspection and utility meter swap
After installation, the city inspector verifies electrical safety and code compliance. Then the utility installs a bidirectional meter that tracks both consumption and export. Do not turn on the system before passing inspection and receiving the utility's Permission to Operate — running unauthorized can void your interconnection agreement.
Frequently Asked Questions
How much do solar panels cost to install in 2026?
The average residential solar installation costs $15,000-$25,000 before incentives for a 6-10 kW system that covers most of a typical home's electricity usage. After the 30% federal Investment Tax Credit (ITC), the net cost drops to $10,500-$17,500. System prices have declined from $8-$10 per watt in 2010 to $2.50-$3.50 per watt in 2026, and battery storage (adding $10,000-$15,000 for a Tesla Powerwall or equivalent) is becoming increasingly common for backup power and time-of-use rate optimization.
How long does it take for solar panels to pay for themselves?
The average payback period for residential solar is 7-12 years depending on your electricity rate, sun exposure, system size, and local incentive programs. In high-rate states like California, Massachusetts, and Connecticut, payback can occur in 5-7 years, while low-rate states like Louisiana and Kentucky may take 12-15 years. After payback, solar panels generate essentially free electricity for their remaining 15-20 year lifespan (panels carry 25-year performance warranties guaranteeing 80-85% of original output).
Should I buy or lease solar panels?
Buying (with cash or a solar loan) captures the full 30% federal tax credit, builds home equity, and delivers 2-3x the financial return over 25 years compared to leasing. Leasing requires zero upfront cost and transfers maintenance responsibility to the solar company, but you don't own the panels, can't claim the tax credit, and save only 10-30% on electricity versus 50-90% with ownership. Leased solar panels can complicate a home sale since the buyer must qualify to assume the lease or you must buy out the remaining term, which can run $5,000-$15,000.
Do solar panels work on cloudy days or in winter?
Solar panels produce electricity on cloudy days, though output drops to 10-25% of peak capacity depending on cloud thickness. Winter production is lower due to shorter days and lower sun angles, but cold temperatures actually improve panel efficiency — solar cells convert light (not heat) to electricity and perform 10-15% better at 40°F than at 90°F. Annual production in northern states like Minnesota or Massachusetts is roughly 20-30% less than in Arizona or New Mexico, but higher electricity rates in northern states often offset the lower production in financial terms.