Are solar panels for your home worth it?

Reviewed by Matt Hope

Updated August 30, 2022

Are you looking at your energy bills with concern and wondering if there is a way to cut costs? Many people today are looking to solar panels to provide them with an alternative energy source. Solar energy’s status as a renewable resource makes it particularly attractive as a way to cut down a home’s greenhouse gas emissions.

Solar panels and two workers

Solar panel pros and cons

Aesthetics

In the past, solar panels were off-putting because they were unsightly appendages tacked onto the roof of your home. However, panel manufacturers have begun to discover better ways of incorporating them into the roofline of a home.

Don’t make a snap decision based on the early days of solar panel use—explore the options available today.

Price

When solar panels first became available to North American consumers, they were expensive to purchase and even more costly to install.

However, the price of solar panels has fallen dramatically since 2014—approximately a 70% drop in that time.

Potential savings

The cost savings you’ll realize from solar panels will be long-term savings, not something with an immediate impact.

Your electricity bill will determine what your savings will be. To calculate potential savings, first look at your monthly electricity bill to determine what you pay per kilowatt hour (kWh).

Then, estimate your average energy usage. The average North American home uses approximately 870 kWh per month. Of course, the size of your home, and many other factors, have a major influence on that number. You can always find your actual monthly energy usage on your electricity bill.

Solar panel diagram

Solar panel efficiency continues to make great strides, with many models sporting conversion to electricity rates greater than 20 percent.

To estimate how many solar panels you’ll need for your home, you can use a solar calculator.

Comparing the costs of electricity monthly is only part of the equation, however. You’ll also need to take into account the installation cost of your solar energy system.

Solar panel installation

Costs

Adding a solar power system to your roof can be expensive. After all, you’re paying for the rooftop preparation, the installation, and the electrical system.

The Canada Energy Regulator estimated the cost of a 5 kW residential solar panel installation to be about $15,000 as of 2018. They expect prices to continue dropping, too.

There are many online solar marketplaces to help you compare the price and installation costs for various systems that interest you. You can use this information to determine how long it will take the system to pay for itself.

Home resale considerations

There have been several studies on how solar panels affect home resale values. Findings from one such study indicated that the presence of a solar system boosted resale value by an average of 4.1%.

That’s on top of energy savings accrued from using the system. Altogether, many homeowners stand to gain at least some financial advantage from solar panels, at least in the medium to long term.

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How to get solar panels for your home

How To Get Solar Panels for Your Home

If you are thinking about a solar energy system for your home, buying it isn’t the only option. Consider these three ways of accessing solar energy.

Purchase

If you purchase a solar energy system, the panels and the electricity generated belong to you for the 20- to 30-year lifespan of the system. It’s the most cost-efficient way of making the move to solar energy over the long term. Many jurisdictions have tax credits or rebates available as an incentive to make the move to solar energy, so do your homework before you buy.

Lease

You can avoid a hefty price tag by leasing solar panels for your home. The leasing company will install them at no cost and maintain them, based on a long-term contract. You’ll save money on your monthly bill, but the leasing company owns the panels and will enjoy all applicable tax credits. However, there’s no down payment or major investment involved.

Community solar

If you live in an apartment or a condominium, installing a solar system isn’t an option. However, you can take advantage of community solar power by buying it from a solar farm. You’ll get a discount compared to your current electricity rates, but it won’t provide the large savings the other two options offer.

If you do decide to take the solar route, you can enjoy the knowledge that you’re doing something positive for the planet, not just for your wallet.

Commonly asked questions

Are solar panels recyclable?

About 90% of a solar panel’s mass is recyclable. Solar panels are largely made of materials like copper, aluminum, steel, and glass. These materials can be reused or recycled when the panel reaches the end of its life.

Do solar panels work at night?

Solar panels can’t generate electricity at night. But, there are many ways of storing the energy created during the day to be used at night or on particularly cloudy days.

How do solar panels generate electricity?

Solar panels use photovoltaic technology to generate electricity. Photovoltaic cells convert sunlight into electricity at the atomic level. These cells absorb photons from light and release electrons, which are then captured and used as electrical current.

Want to learn more? Visit our Home Improvement resource centre for tips and inspiration for your next big home improvement project. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.

About the expert: Matt Hope

Matt is a co-founder and the COO of FindEnergy.com, which empowers consumers by providing data about where their energy comes from and the true price of that energy in relation to neighbouring areas. To build FindEnergy.com, Matt spent three years making sense of convoluted energy data that various government agencies collect.

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