Installing Solar On-Site

The cost of installing solar depends on a few factors, including the system size you want to put in, of course. In 2023, the average average solar panel installation ranged “from $17,430 to $23,870 after taking into account the federal solar tax credit,” according to EnergySage, a trusted energy resource that puts out information on these matters.

The good news is that if you’re in New York we have some of the best incentives for solar installation in the country, and an average solar installation in New York costs between $13,388 to $18,112. Those numbers are notably lower than the national ones.

The reality is that solar panel installations are an investment, similar to getting an education, buying a house, or learning a new skill: there is a more notable upfront cost, but over time, the benefits keep compounding.

The amount of time that it takes to earn back the cost of installing solar panels is known as the “payback period”. Estimates for payback periods vary depending on local electricity costs and how much electricity you use, but even by a somewhat conservative estimate, in New York the payback period is about 6.6 to 8.9 years.

After that, the panels you installed effectively earn a profit because you’re no longer paying for electricity. And as electricity rates go up, your payback period becomes shorter and savings greater. (Note that if you continue to be connected to the grid, you’ll continue to pay service charges.)

Once solar panels are installed, maintenance costs are almost zero. After all, it does not require external inputs like fuel to sit there, simply receiving the sun and turning it into clean, free, hyper-localized energy. As your panels collect sunlight and generate power, you save money on your energy bills, and even if you use less power than your panels generate in a single month, you accrue credits to use later, as indicated in the net metering section.

Contrary to popular belief, solar panels work more efficiently in the cold, it is just that there are fewer hours of daylight, the angle of the sun is less direct in the winter, and snow cover can affect efficiency. When there is snow cover, that will reduce panels’ ability to turn sunlight into energy, but just like rain, the snow also has a beneficial effect of cleaning the panels of dirt and pollen.

Depending on what it’s like around the house or building, tree trimming might also be a cost to factor in.

Net metering is an energy accounting mechanism where you get credit for electricity generated by your solar panels. The credits you earn then get applied to your electric bill, reducing how much you have to pay on your future electric bills. 

If your panels generate more electricity than you use, the credits roll over to the next month. Just note that if your credits will keep rolling over unless they go unused for 20 years, when they will expire.

It’s also important to note that every month you will continue to be charged a basic service charge (usually around $15-17) by your utility. This service charge is basically the cost of using the grid infrastructure that moves electricity around—it pays the electric utility to maintain all of the lines and act as your system’s battery, ensuring you have power when the sun doesn’t shine and when your system isn’t providing all the power you need.

Off-site solar is an option available to anyone—renters, anyone with a tight budget, people who live in large buildings, and those who have homes that don’t have ideal, sunny places to mount panels. As may be obvious, off-site solar programs are those that give you a claim to the energy produced at a location that you don’t own or live in.

This option is sometimes referred to as “community solar”, including by local companies. This terminology can be confusing because the option below, solar energy subscriptions, also are referred to with the same term. The Department of Energy defines community solar to include programs that allow residents to subscribe to or own panels at an off-site location.

Off-site solar is an important option in the toolkit, because, “[a]ccording to analysis by the National Renewable Energy Laboratory, nearly 50% of households and businesses are unable to host rooftop solar systems,” reads the above-linked DOE page (emphasis added). “This may be because they don’t own their homes, have roof conditions that do not support a rooftop photovoltaic (PV) system due to shading, roof size, or other factors, or due to the upfront costs of installing home PV.”

Off-site solar works by giving residents like you credit for panels located elsewhere, but likely still in the community. As the sun shines onto off-site panels, electrons begin to move and generate electricity that feeds into the grid. Net metering—described above—then gives you credit for the electricity that your panels generate, reducing your energy bill.

If you want to have a stake in renewable energy but don’t own a house or simply don’t want to purchase solar panels, off-site solar is an option you and almost half the country can tap into!

To find local options for purchasing or contracting with solar farms for off-site solar panels, you can check out Smart Energy Choices page on it, or you can visit NYSERDA’s pages as well.

If this option is still a bigger commitment than what your budget and capacity can allow, then there is another, more affordable off-site option you can consider: Solar Energy Subscriptions.