Solar Energy is Free, What Causes Solar Panels to be so Expensive?

Last Updated: March 15, 2020

Solar power is a renewable source of energy. Which means it’s much cheaper with time. However, achieving that is not so easy. A lot of calculations and budget goes into getting a solar-powered system. These calculations are usually done by your solar agency. So why is solar panel installment so expensive? The cost might have surprised you, but the fact is less than 30% of the price is going towards the hardware equipment.

Why Sunlight is free but Solar Energy is Expensive?

Yes, Solar energy is free. Utilizing and storing it is not free. If it was that easy to migrate to a green and renewable energy source, everyone would be doing it. There are several issues when it comes to solar energy. The biggest of all is the price tag. Everyone wants smaller electricity bills, but the first-time costs are mostly too high.

Here is a breakdown of solar installation cost according to the EnergySage.

  • Hardware equipment ~ 25%
  • Marketing ~ 20%
  • Overhead ~ 20%
  • Labor ~ 10%
  • Permits & margins ~ 25%

That may have answered why is solar panel installment so expensive, but you might wonder, how is trending then?

Then why are Solar Energy based industries growing so fast?

Solar Energy based industries growing fast

The cost of solar panels has dropped by over 60% since 2009. This played a big catalyst. Combined with benefits like Feed-in tariff schemes, small bills, and fewer maintenance costs are the top reasons for this insane growth in popularity. With more advancement in fields of research and engineering, the prices will drop even further in years to come.

Note: We suggest you do not play the waiting game because prices haven’t dropped as much in this decade. If you install the solar panels now you will save a lot of money, probably more than you will save by waiting.

What can you do?

There are many factors at play when purchasing solar equipment. You can’t control all of these factors but can smart choices, by following our guide. From the given breakdown of the total costs, you can do the following.

  • Save on hardware, inverters, quality of panel and mounting system
    • You might not need the most efficient type of solar panel out there. Find something that is optimum for your budget and saving plan.
    • There are a few types of inverters, you should select the one that fits your specific needs. String inverters connect with each panel individually, while centralized inverters can handle the whole system.
    • Mounting systems aren’t that expensive. After you decide where to put your panels, you can look for specific mounting mechanisms. If you need maximum efficiency, then you’ll require expensive mounting hardware.
  • Save via your Installer by learning about solar energy and saving the time of both you and your installer. United States Department of Energy is a really good public resource to help you with that. We will also suggest that you look around the market to get more quotes to compare. Make sure your installer provides a good warranty.
  • Other savings
    • You should do as much as you can by yourself. This can be easy tasks like clearing out the areas for optimal energy production.
    • Make sure to pick the right spot that is not too complex to install solar panels. This may be out of your hand, but this can reduce the installation costs greatly.

Finally, Is installing solar panels worth it?

Almost all homeowners dream of installing solar panels. That idea quickly starts fading away and no progress is made. That is mostly because of the costly price tags. We certainly recommend installing solar panels now and within a few months, you will have saved a lot. Keep this in your mind that solar panel system prices are reducing, but this may take time to get in effect in your city or area.

Price should not be your only consideration when buying solar panels. Think about this in the long term, this will benefit you a lot. Utility electricity bills and inflation will not affect you as much in the future. You will become more independent, and electricity is a basic necessity of the modern world.


Fossil fuels (oil, gas, and coal) were the base of modern industrial society. Renewable energy such as from the sun and wind are preferred in the 21st century. The demand for clean energy is increasing more than ever. As modern business shifts towards more green sources of energy, prices will ultimately go down.

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