The Cost Of Solar Panels In Virginia - Is It Worth It In 2024?

Solar Energy Installation Price - 2024 Update for Virginia

"How much does solar energy cost?" It’s the top question we hear from every business leader, farmer, and homeowner considering a solar installation.

Below, we’ll break down the factors that influence installation costs for Virginia residents, the incentives available to help lower those costs, and the most effective ways to finance your solar investment.

How Much Do Solar Panels Actually Cost in Virginia?

The cost of installing solar panels in Virginia will vary depending on several factors like the system size, type of installation, installation location, the selected equipment, and utility interconnection costs.

Solar Panel Costs for Homeowners

Virginia homeowners looking to invest in solar energy can anticipate a cost of $2 to $3 per watt when opting to partner with a reputable installation company. A homeowner with an average monthly electric bill of $120 per month can expect to invest around $33,710 upfront, with a net cost of $23,597 after factoring in the 30% federal tax credit.

Average Cost by Solar System Size

System Size

Cost Before Incentives

Tax Credit

Cost After Tax Incentives

Year One Electric Savings

Year One SREC Income

10 kW

$33,710

$10,113

$23,597

$1,375

$381

15 kW

$44,495

$13,349

$31,146

$2,063

$572

20 kW

$55,280

$16,584

$38,696

$2,750

$763

System Size

Cost Before Incentives

Tax Savings

Cost After Tax Savings

Year One Electric Savings

Year One SREC Income

50 kW

$136,700

$73,254

$63,446

$5,000

$1,906

100 kW

$229,300

$122,876

$106,424

$10,000

$3,813

200 kW

$416,300

$223,085

$193,215

$20,000

$7,625

1. The Type of Solar Panel

When considering a solar panel installation, it's essential to understand that not all solar panels are created equal. Different types of solar panels have varying efficiencies, lifespans, and costs. In this section, we'll compare the costs and characteristics of monocrystalline, bifacial, and thin-film solar panels. We'll also examine the emerging technology of solar shingles and how they compare to traditional solar panels.

Monocrystalline Solar Panels

Monocrystalline solar panels are the most efficient and durable option on the market. Made from single-crystal silicon, they allow electrons to move more freely, leading to higher efficiency. Because of their superior performance and long lifespan, monocrystalline panels usually come at a higher price compared to other types of solar panels.

Bifacial Solar Panels

Bifacial solar panels are built to capture sunlight on both the front and back, boosting their total energy output. With transparent or semi-transparent back sheets and dual glass layers, these panels can absorb extra reflected and diffused light from the surroundings, increasing their efficiency.

Thin-Film Solar Panels

Thin-film solar panels are composed of materials like cadmium telluride, amorphous silicon, and copper indium gallium selenide. Their lightweight and flexible design makes them well-suited for specific applications. However, they tend to be less efficient and have a shorter lifespan than traditional crystalline panels.

Solar Shingles vs. Solar Panels

Solar shingles offer a modern alternative to traditional solar panels, designed to integrate smoothly with your roof while serving as both roofing material and a source of clean energy. Though they provide a sleek, visually appealing solution, they typically come at a higher price than standard solar panels.

Tesla’s Solar Roof is another option in the solar shingle market, but it tends to be significantly more expensive than other solar shingles and traditional solar panels.

2. The Type of Installation

There are three primary methods for installing solar panels: roof mounts, ground mounts, and carports.

Roof mounts are the most typical and are attached directly to your existing roof structure. They tend to be more affordable than ground mounts or carports due to lower labor costs and fewer materials needed. Solar can be installed on various roof types, including metal, shingle, and flat roofs, each requiring different installation methods. Shingle roofs need a special flashing piece to secure the panel racking, while attachments attach directly to the seam of a standing seam metal roof. For flat roofs, panels are installed using a ballast mount, held in place by concrete blocks and sometimes anchored directly to the rafters below.

Ground mounts and carports are ideal alternatives for homes or businesses without suitable roofs for solar panels. These systems can often be placed in areas that receive optimal sunlight, maximizing energy production.

However, ground mounts and carports typically cost more than roof mounts due to the extra labor and structural components required. In some cases, though, a well-positioned ground mount system can require fewer panels, potentially balancing out the higher upfront costs.

3. The Type of Equipment

Solar Panels: Where the Power Comes From

When choosing solar panels, two key factors to consider are power density and color. Power density refers to the amount of electricity a solar panel can generate relative to its size. For example, panels of the same size might produce anywhere from 400 to 600 watts, depending on their power density. Typically, the higher the power density, the higher the cost per watt.

Color is another consideration. Standard solar panels usually feature blue cells, a white back sheet, and a silver frame. Panels with black frames, black back sheets, or black cells tend to have a sleeker appearance but come with a higher price tag.

Solar Inverters: The Brains Behind Your System

There are three main types of solar inverters: String Inverters, Microinverters, and String Inverters with Power Optimizers.

String Inverters connect groups of solar panels in a series, making them the most cost-effective option.
Microinverters are installed on each individual panel, offering advantages in system performance but at a higher cost.
Power Optimizers combine the benefits of string inverters and microinverters. They improve system efficiency but are more expensive than string inverters, but they are typically less expensive than microinverters.

4. Additional Cost Factors

Your Energy Consumption

Our goal is to design a solar panel system that offsets as much of your electricity usage as possible while maximizing your return on investment. The higher your electricity bill, the more solar panels, inverters, and equipment will be needed to meet your energy demands efficiently.

The Amount of Shading on Your Solar Panels

The amount of shade a system encounters directly affects the placement and number of solar panels, as well as the type of inverter used.

For areas with significant shading, additional panels and microinverters may be needed to meet energy requirements. On the other hand, a system installed in full sunlight can achieve the same energy output with fewer panels and string inverters.

Your Local Weather Patterns

Weather patterns vary by region. Some areas get more sunlight, while others experience more snowfall. Our systems are tailored using local weather data, which influences the system size and required equipment.

Utility Costs

The Utility Interconnection Cost

Connecting a solar system to the power grid is known as interconnection. Each local utility has its own set of specific requirements that must be adhered to. These requirements can influence the type of meter you need or whether transformer upgrades are necessary.

The cost of interconnection varies for each project. It depends on factors such as the existing amount of solar power in your area, the age and condition of the equipment on your line, and the size of your solar panel system.

The Distance from the Solar Panels to the Interconnection Point

Because the electricity generated by the solar system needs to be delivered to the utility meter, the greater the distance between the solar panels and the interconnection point with the utility, the higher the installation costs will be. This is due to the need for conduit installation or trenching, as well as the requirement for larger wire sizes over longer distances.

Can You Lower the Costs with Financial Incentives, Tax Credits, or Rebates?

There are several solar incentives available for Virginia businesses and homeowners.

The 30% federal tax credit and Solar Renewable Energy Credits (SRECs) are the main two incentives for homeowners. The federal tax credit can be used to offset owed taxes—this is money saved in year one.

SRECs are a lesser-known benefit available for homeowners and businesses. They pay you for the kilowatt-hours produced by your system. For every 1,000 kWh produced by your solar panels, you’ll receive 1 SREC. In May 2024, VA SRECs were selling for $35. This price can greatly fluctuate depending on market conditions.

The incentives are a little sweeter for businesses and farms.

The Federal Solar Tax Credit: This credit offsets your owed taxes. For most, the credit will be 30%. However, if your business qualifies, additional 10% adders could increase the credit to over 40%. There are also slightly different rules for systems larger than 1 MW AC Power. These projects will start with a 6% tax credit with the opportunity to increase to 70%. Learn more about the commercial tax credit.
Accelerated Depreciation is also available for commercial solar. In 2024, you can take 60% of the depreciation in year one. The remainder will follow the five-year MACRS schedule. The accelerated will continue to drop by 20% each year until it reaches 0%.
SRECs are also available for commercial solar systems.
USDA REAP Grant is available for farmers and qualifying rural businesses.

Are Solar Panels Worth the Cost - ROI & Payback Periods

Solar panel systems pay for themselves through immediate tax savings and long-term energy savings. With the tax credit available for use in the initial year to reduce your federal tax liabilities and accelerated depreciation benefits for businesses, a substantial portion of the solar panel investment’s returns are front-loaded.

Virginia homeowners can expect an average payback period of 16 years on their solar panels, with an ROI of 9.55%.*

Businesses in Virginia that choose to invest in solar panels can expect to recoup their initial investment in around 6 years, with a solid 20% return on investment.*

Solar panels are expected to have a lifespan of over 30 years, backed by production and workmanship warranties of 25 or 30 years. This means homeowners can enjoy over a decade of free electricity, while businesses can benefit for more than two decades.

Ultimately, you must weigh the expected lifespan against your tax savings, projected energy savings, and environmental impact to determine if a solar panel system is the right investment for you. While solar may be a valuable investment for many Virginia residents, it’s not right for everyone.

*The average ROI and payback periods were calculated based on actual data from our 2023 installations.

Frequently Asked Questions

What financing options are available for solar in Virginia?

We believe that for most homeowners and businesses, purchasing the system outright with cash or a loan offers the best return on investment. This approach allows the system owner to take advantage of all tax incentives and SREC income, though it does require securing the funds to cover the initial cost.

Leases and Power Purchase Agreements (PPAs) are available for those who prefer to install solar without a significant upfront expense. However, this option means you won't benefit from the tax incentives and SRECs. The advantages include a low initial cost and the responsibility of maintenance falls on the system owner.

What maintenance costs are associated with solar panels?

If your system is installed correctly, there should be minimal maintenance costs. The inverters are the most common components of a system that encounter issues, and an occasional panel cleaning may be required if installed in dirty environments.

Can I add more solar panels later if my energy needs increase?

Certainly, system expansion is feasible. Nevertheless, installing a larger system from the beginning is generally more economical. There are numerous fixed costs associated with a project that do not change with the size of the system. Additionally, some equipment, such as inverters, may require upgrades if they cannot manage the increased wattage from the new panels.

If you plan to increase your electricity usage down the road, it is important to discuss this with your solar company. They may be able to design the initial system with that in mind.

Is it cheaper to install solar panels on a roof or the ground?

Ground mounts will generally be more costly. They require extra work and materials for the support structure. However, they can be placed in the best position for maximum efficiency and are a great option for people who don't have a suitable roof or would rather not have panels on their roof.

How do solar panel warranties affect cost and value?

Typically, warranties do add to the product's price. Nevertheless, the reassurance they provide often justifies the extra expense.

Is DIY Solar Installations Worth The Cost Savings?

Yes, installing a solar panel system yourself will be cheaper upfront. However, there are several cons to DIY installations.

Most product warranties are only valid when installed by an approved installation professional.
Building permits and utility agreements can be difficult to navigate if you do not have experience.
Working with electricity is dangerous. Leave it to the trained professionals with proper safety equipment and tools.