Why is my solar panel system more expensive than my neighbor's?

It probably doesn't surprise you to learn that solar costs vary by state, but what other factors make a solar panel system more or less expensive? If you're comparing quotes with your neighbors and notice a big difference in cost, it's probably due to one of five main reasons:

Takeaway: larger solar panel systems are typically more expensive but have a lower $/watt thanks to the economies of scale.

When an installer designs a solar panel system, they typically propose a system large enough to generate all your electricity needs because that's how you'll save the most money. But everyone's electricity needs are different, as are their rooftops; if your proposed solar panel system is larger than your neighbor's installed, it'll likely cost more money. That doesn't necessarily mean more solar panels: system size is about the capacity to produce electricity, determined by a system's kilowatts (kW).

While you may be paying more overall for a larger system, you may notice that the larger the system, the lower the cost per watt ($/W). Why? When it comes to paying for solar, there are certain fixed costs you need to pay, like permitting or interconnection fees. As your solar panel system becomes larger and larger, those fixed costs represent a much smaller fraction of the overall cost, leading to a generally lower $/watt rating.

Takeaway: higher-quality equipment is more expensive to install, but in some cases, the added cost can mean more savings over time.

Like other electric appliances, there's a variety of quality with solar equipment. Higher efficiency, higher wattage panels are typically more expensive than panels with lower efficiencies and wattages. You'll likely have to pay more upfront if you install premium equipment.

However, there are many instances where that added cost is well worth it. For example, if you don't have a ton of space for an installation, installing higher-efficiency equipment can help maximize the electricity production of your solar panel system (and, therefore, your electricity bill savings over time). Higher efficiency equipment can also be worth it if you're considering buying an electric vehicle or some other electricity-hungry appliances and want to leave space available to expand your solar panel system down the line.

In this article, you can read more about whether high-efficiency equipment is worth the added cost.

Takeaway: installations that require additional components (ground mounts, carports, etc.) are often more expensive than a rooftop solar panel system.

Alternative installation types–ground mounts, carports, etc.–are becoming increasingly popular. While there are certain advantages to these types of installations, they often cost more than traditional rooftop solar due to additional components, complicated wiring, or added labor required to complete the installation. Don't be too surprised if your ground mount system costs more money than your neighbor's rooftop installation.

Takeaway: if you have a complicated roof structure or plan on installing solar arrays on multiple roof planes, you may have to pay more for labor.

If your roof has multiple levels, an unusual angle, obstructions like dormers or vents, or is made up of more complex roofing material like slate or cedar, installing your system may require more time to handle these added complications. Installers will charge extra for this, and the additional effort will increase your overall cost.

Takeaway: some installation companies charge more for their services than others because of their overhead costs. Ultimately, you want to make sure you choose a reputable installation company that you trust.

It certainly won't surprise you to hear that solar installers, like other contractors, charge differently for their services. If you notice a significant price difference between what you and your neighbor are being charged for solar, and it's not because of any of the factors listed above, it's likely because of the installation company and what they charge for labor. That doesn't mean the added cost isn't worth it: cheaper doesn't mean better, and, ultimately, you want to move forward with a reputable installer you feel comfortable with.

Look at this article to learn about the other factors to consider when choosing an installer.

If you compare price notes with your neighbor, it's likely because you want to ensure you pay a fair price to go solar. However, solar pricing can be very dependent on property specifics and your preferences or needs, so in addition to comparing pricing with a neighbor, we recommend obtaining multiple quotes for your property to compare. When you sign up on the EnergySage Marketplace, you can receive up to seven custom quotes to compare side-by-side in a standardized format. Evaluating pricing, equipment, and financing from different local installers will allow you to go solar confidently.