Key Takeaways

  • A typical residential solar system (6 kW) today costs about $15,000–$18,000 before incentives; after the 30% federal solar tax credit, net cost is roughly $10,500–$12,600.
  • Typical production is 7,200–9,000 kWh/year for a 6 kW system; at $0.18/kWh that yields $1,300–$1,620 in annual bill reductions. Typical payback: about 6.5–9.7 years depending on location and export rules.

What You Need to Know

  • System cost and incentives: Current installed prices average roughly $2.50–$3.00 per watt; the federal Investment Tax Credit (ITC) for residential solar is 30% (current federal policy). State and local rebates vary and can reduce upfront cost further.
  • Production and household coverage: Solar output depends on local sun hours. As a rule of thumb, expect about 1,200–1,500 kWh per kW per year. That means a 6 kW array commonly produces 7,200–9,000 kWh annually—often 60–100% of a typical U.S. household’s 7,000–12,000 kWh/year use depending on size and efficiency.
  • Export value (selling excess to the grid): Export compensation varies widely. Some utilities still offer full retail net metering (roughly your retail rate, e.g., $0.18/kWh). Others credit exported power at a much lower rate—commonly $0.02–$0.06/kWh (wholesale or avoided-cost rates). The export rate is the single biggest policy factor that changes the economics of additional panels.
  • Batteries and self-consumption: Adding a battery can increase the share of solar you consume onsite from perhaps 40–60% up to 70–90%, but battery systems typically add $10,000–$15,000 installed. Batteries shorten grid dependence and provide resilience but extend payback time unless time-of-use rates or poor export credits make self-use much more valuable.

How to Save Money

  1. Right-size your system: Oversizing to export a lot only pays if you have strong export credits. For utilities with low export rates, size to cover 60–80% of annual use so most solar energy is self-consumed.
  2. Claim the 30% ITC: The federal tax credit typically reduces your net installed cost by 30%—for a $15,000 system that’s a $4,500 reduction to $10,500 net. Check eligibility and local incentives to lower cost further.
  3. Use time-of-use (TOU) strategies: Shift high-usage activities (laundry, EV charging) to midday while panels produce. This increases self-consumption and multiplies savings when export credits are low.
  4. Compare export policies: Before buying, get the utility’s export buy-back rate in writing. If export credits are below $0.06/kWh, plan to add a modest battery or reduce array size to improve ROI.
  5. Shop multiple installers and warranties: Panels typically last 25–30 years with 0.5–0.8% annual degradation. Look for 10–25 year product/performance warranties. Compare quotes and ask for modeled annual production numbers.
  6. Monitor and maintain: Cleaning and simple checks cost around $100–$300/year but protect production. Use monitoring to catch underperformance early.

Bottom Line

Increasing your home’s solar share reduces your electricity bill proportionally, but the dollar value depends on whether exported surplus is paid at full retail value or a low wholesale rate. With current market figures, a typical 6 kW system can save about $1,300–$1,620 per year and often pays back in roughly 6.5–9.7 years after the 30% federal tax credit. If your utility offers low export compensation, prioritize self-consumption (right-sizing, TOU shifting, or batteries) to protect returns. If incentives or retail net metering are strong where you live, installing now usually delivers faster payback; if export rates are dropping and incentives are uncertain locally, get quotes and consider modest sizing or waiting for better state/local programs. These numbers are median estimates based on current market figures; get a local site assessment to model your exact production and payback.