Author: Wholesale Solar

Wholesale Solar of Mt. Shasta, CA, is an employee-owned company specializing in the design and distribution of custom solar systems and components. Since launching in 2002, Wholesale Solar has helped thousands of DIY homeowners achieve lower power bills and energy independence. Learn more at
Tilt & Azimuth Angle: Finding the Optimal Angle to Mount Your Solar Panels

Tilt & Azimuth Angle: Finding the Optimal Angle to Mount Your Solar Panels

Jeremy Allen
Jeremy Allen, Senior Sales Tech at Wholesale Solar​

Welcome to another entry in our ongoing Solar 101 series. Today we’re going to explain how to mount your solar panels to get the most energy from them.

Let’s start with two key terms: elevation angle and azimuth angle (commonly shortened to “angle” and “azimuth” for brevity).

  • Elevation Angle: The vertical tilt of your panels.
  • Azimuth Angle: The horizontal orientation of your panels (in relation to the equator, in this case).

Solar panels work best when they face directly into the sun. But that task is complicated by the fact that the sun moves across the sky throughout the day. It also changes angle in the sky as the seasons change.

So when you build a solar system, the question is: what’s the best angle to mount your solar panels to get the most output?

Some people will want to set it at one angle and forget it, while others like to go hands-on with their system and make adjustments to optimize output.

You can also buy a tracker, which automatically follows the sun’s position in the sky to squeeze the most output from your panels. But trackers are rarely the most cost-effective option. It’s almost always cheaper to buy a few more panels instead of investing in a tracker.

Optimal Azimuth (Horizontal Angle) For Solar Panels

For best results, your solar panels should face toward the equator. If you live in the Northern Hemisphere, face them south. If you live in the Southern Hemisphere, face them north.

(Since we’re an American company, the following example assumes you’ll point your system to the south.)

Specifically, you should point your panels toward true south as opposed to the reading on your compass, which is magnetic south.

Many people are surprised to learn that their compass isn’t completely accurate. That happens because magnetic forces in the Earth’s core pull the compass needle away from true north or true south. Depending on your location, the compass reading can be inaccurate by as much as 25°!

The difference between magnetic north (the reading on your compass) and true north is known as magnetic declination. This is a measurement of how many degrees you need to compensate from your compass reading to find true north.

Magnetic Declination values in the United States

A positive number represents eastern declination, meaning true north is east of your compass reading. A negative number represents western declination, meaning true north is west of your compass reading.

So how do you calculate the ideal azimuth for your panels?

First, find your magnetic declination from one of the many charts online, or from a tool like’s calculator.

Adjust the facing of your panels by the magnetic declination value in your location. The direction you adjust the panels depends on where you live:

In the Northern Hemisphere:

  • If your magnetic declination is east (positive), rotate your panels east.
  • If your magnetic declination is west (negative), rotate your panels west.

In the Southern Hemisphere:

  • If your magnetic declination is east (positive), rotate your panels west.
  • If your magnetic declination is west (negative), rotate your panels east.

Two examples to demonstrate the difference:

If you live in San Diego, California, your magnetic declination is about 11° east. Since San Diego is in the Northern Hemisphere, start by finding magnetic south, then adjust 11° to the east.

In contrast: Cochran, Chile also has a magnetic declination of around 11° east. But since you are in the Southern Hemisphere, you want to point your panels north instead. So you would actually make an adjustment 11° to the west to find the ideal azimuth.

By performing these adjustments, you will face your panels directly at the equator, maximizing their exposure to sunlight (and by extension, the amount of solar power you generate).

Finding the Optimal Tilt For Your Solar Panels

The other half of the equation is finding the vertical angle, or tilt, of your solar panels.

You have a couple options here: pick one angle and leave it alone, or adjust the tilt a few times per year to optimize seasonal production.

Depending on your preference, here’s our advice.

Optimal Tilt Angle (No Adjustments)

If you never want to bother with adjusting your panels, set them at a tilt angle that is equal to your latitude.

To use the above example again, San Diego is located at a latitude of 32.7157° N. You’d be just fine if you set your panels at around 33° and left them untouched.

One wrinkle to consider is changing the tilt slightly to favor summertime or wintertime output. If you spend more money in the summer running the A/C, you might want to optimize for summer production. On the other hand, if you end up blasting the heat during harsh winters, you can set your panels to favor winter production.

This matters more for off-grid systems, since you store your own power. If you are grid-tied, you most likely want to optimize for summer production, since the utility company will typically give you a credit for any over-production. You will produce more in the summer, and you can collect on this credit in the winter months.

To optimize overall production year-round, tilt your panels at your latitude.

To lean toward more production in the summer, tilt your panels at your latitude minus 10-15°.

To lean toward more production in the winter, tilt your panels at your latitude plus 10-15°.

Seasonal Adjustments to Optimal Tilt Angle

If you have an adjustable mount and don’t mind tilting your panels manually, you can change the angle a few times a year to get a bit more production from your array.

We should note that this isn’t a particularly common choice. Most of our customers simply give themselves a 5-10% cushion in production when sizing their system so they never need to make adjustments.

The main exception is in heavy snow areas. If snow will accumulate on your panels, pole mounts make a lot a sense. You can adjust them to a steeper tilt angle in the winter, which not only improves output, but also sheds snow from the face of the panels.

If you are able to adjust the angle of your solar panels a few times per year, here is the adjustment schedule we recommend:

  • Spring: Tilt the panels to your latitude.
  • Summer: Tilt the panels to your latitude minus 15°.
  • Fall: Tilt the panels to your latitude.
  • Winter: Tilt the panels to your latitude plus 15°.

These are general guidelines, but you may get better results by customizing your adjustment schedule based on your location. For more info, read through, an old-but-still-excellent reference that explains (in great detail) how to tilt your panels to maximize their production.

A Note About Trackers

Trackers automatically adjust your system so that your panels always face directly at the sun. The concept is to squeeze as much production as possible out of your panels.

While the idea sounds great in theory, trackers rarely make sense in residential systems. Tracking equipment costs $600-$1000 per panel, and you could expect that investment to net you 60 to 90 watts of extra production out of a 300W panel.

Alternatively, if you need more output, you can simply add another 300W panel for around $160. If you have the space, it’s far cheaper to add more panels.

The math changes for commercial systems, but in general, most people don’t need trackers. Read the full explanation here.

In the end, you don’t really need to be concerned about fine-tuning your system unless you’re in danger of running out of space to build it. Trackers are often too expensive, and frankly, adjusting panels is going to feel like a chore unless you really enjoy the hands-on DIY approach.

If you have plenty of space, we recommend giving yourself a cushion by adding a few extra panels. The convenience is well worth it.

For more information, check out our free solar racking guide.

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Should You Buy a Solar Tracker? (No, Probably Not)

Should You Buy a Solar Tracker? (No, Probably Not)

Ian Shurtleff, Senior Sales Tech at Wholesale Solar​

Solar trackers are a special kind of solar mount that automatically follow the position of the sun in the sky.

The purpose of trackers is to maximize the output from your solar panels. Trackers automatically adjust your panels so they always face directly at the sun and get the most possible exposure year-round.

It sounds like a great idea. Who doesn’t want to get the most efficiency out of their panels?

But when people call us up asking if they should buy a solar tracker with their system, we almost always tell them the same thing: no, it’s not worth it.

Why? Because the value proposition starts to crumble when you do some basic math on system parts.

Trackers made sense 10 years ago when panels cost way more than they do now. This NREL report puts panels at $3.57 per watt in 2008, which works out to just over $800 for a 225W panel.

At that cost, it made more sense to pay extra for a tracker to maximize the value of each panel. But the cost of solar has consistently fallen 6-8% per year, and now the opposite is true. If you need more energy, it’s cheaper to buy more panels instead.

Let’s compare both options.

You can buy hardware for a standard fixed ground mount for about $80 per panel. A ground mount for a six-panel system will cost about $480 in materials.

Or, you could buy a tracker for $600-$1000 per panel…

If you put six 305W panels on a tracker, the rated output on your system is 1830W. You might pay $3600 to build it on an inexpensive tracker.

Trackers squeeze another 20-30% production out of your system, so you end up paying $3120 (the tracker cost minus ground mount cost) for an extra few hundred watts of production.

If you really need that extra output, what makes more sense: buying an extra panel for 250 bucks, or buying a tracker for 3 grand?

If space isn’t a concern, it is almost always cheaper to buy a couple more panels than overpay for a high-tech mount. In addition, trackers have moving parts, which translates to more frequent maintenance – making them less reliable than fixed arrays.

And that’s why we rarely sell trackers…the idea is great and the technology is interesting, but it doesn’t come close to making sense from a cost perspective.

Related: The most common racking types are fixed roof and ground mounts. Read our comparison of roof mounts vs. ground mounts to see which makes sense for your system.

The Exceptions: When Solar Trackers Make Sense

Trackers don’t save you any money. But they do save space.

The only time we ever recommend trackers is when you are working with space restrictions and you absolutely must maximize your production from a compact array.

This scenario usually comes into play in commercial and remote industrial projects.

On one hand, you have projects like this setup powering telecom equipment on the top of a mountain. There’s no room to build a larger mount, and they would have had difficulty digging footings in the rock.

Since they needed extra output but didn’t have room for more panels, a tracker made sense for them in this scenario. It enables them to power an industrial outpost within the constraints of their project.

Another scenario where trackers make sense is large-scale commercial installations.

At scale, the math changes. 20-30% of a 3 kW system isn’t a ton of power, but 20-30% of a 100MW commercial installation is quite a lot of additional power.

There are other considerations which make trackers more appealing in commercial and utility systems as well.

One: the cost of land. Trackers allow for more dense PV installations, which means you can fit more energy output into a smaller array. That reduces the amount of real estate needed for the system.

Two: the cost of installation. Large-scale systems cost a lot to install. Trackers are more scalable to install in commercial systems because they require less labor to connect fewer modules and inverters. Those costs add up, and the savings on labor eventually offset the extra money invested in trackers.

Wrapping Up

So do you need a solar tracker?

Commercial trackers sometimes make sense when you’ve run out of room to add panels to your system. But that’s about the only time we advocate for them.

If you’re building a residential system, you don’t need one. If you have space, just buy more panels and save yourself some money.

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Solar Panel Cost Guide | Your Complete Guide to the Cost of Solar in 2018

Solar Panel Cost Guide | Your Complete Guide to the Cost of Solar in 2018

Courtney Johnston, Purchasing Manager at Wholesale Solar
COURTNEY JOHNSTON, Purchasing Manager at Wholesale Solar​

Editor’s note: This article was updated on 11/7/18. Solar panel prices change on a regular basis. Check our solar panels page for current pricing.

Welcome to our comprehensive solar panel cost guide, updated for 2018! Our goal with this article is to answer the first question many people have when they start their research: how much does it cost to go solar?

First, we’ll go over the factors that affect solar panel prices. Then we’ll look at individual panel prices, complete system prices, and historical pricing trends to see how the cost of solar might change in the future.

  1. How Much Do Solar Panels Cost in 2018?
  2. Complete System Pricing (Grid-Tied)
  3. Complete System Pricing (Off-Grid)
  4. Solar Panel Installation Costs
  5. Factors Affecting Solar Panel Cost
  6. Historical Pricing Trends

How Much Do Solar Panels Cost in 2018?

Let’s get right to the good stuff. Here’s how much our most popular solar panels cost in 2018.

For the sake of comparison, we will start with the standard 60-cell or 72-cell panels that we use by default in our system packages. These are the “full-sized” panels you are going to use when you build a complete system for your home or office.

ManufacturerPrice (as of 10/30/18)Output (watts)Cost per wattMaterialMade in...
Mission Solar$219305W$0.72Mono PERCAmerica
Mission Solar$245360W$0.68Mono PERCAmerica

And here’s the picture for small panels with more limited use cases. These are the ones you’ll use on your RV/boat, industrial worksites, and other remote applications.

ManufacturerPrice (as of 10/30/18)Output (watts)Cost per wattMaterialMade in...
Solarland (Industrial Rated)$337.13150W$2.25PolyChina
Sunpower (flexible)$253100W$2.53FlexibleFrance

These panels are more expensive because they are produced in smaller quantities. They may also have extra features, like the flexibility of the Sunpower panels, or the heavy-duty Solarland panels which are certified for industrial use.

In summary: “standard” solar panels cost anywhere from 70 cents to over $1.50 per watt, depending on their output, quality, and where they are manufactured. When you look at more specialized panels that are manufactured in lower quantities, the price climbs up above $2/watt.

Not sure how many panels you need to power your home? Read this: “How Many Solar Panels Do I Need?”

Solar System Costs (Grid-Tied)

Panels only represent about half of the total cost of your system. Other parts like inverters and racking also contribute a significant piece of the pie.

Let’s look at prices for complete grid-tie system packages. This chart shows the costs to buy all of the equipment for your system, but it doesn’t include costs like shipping or installation. (We’ll look at the total installed costs later in this article.)

The prices in this table come from real grid-tied systems featured on our site (prices current as of 11/7/18).

Not sure what size system you need? Grab a copy of your electric bill and look for your kilowatt hour (kWh) usage. Then input that info into our solar cost calculator, which will tell you what size system you need to cover your monthly usage.

System SizeCost Per WattCost (before tax credit)Cost (after tax credit)Monthly Output
2.88 kW$1.61$4,635$3,245398 kWh
3.6 kW$1.50$5,390$3,773498 kWh
4.32 kW$1.49$6,427$4,499598 kWh
5.4 kW$1.40$7,563$5,294747 kWh
5.76 kW$1.42$8,205$5,744797 kWh
7.2 kW$1.38$9,944$6,961996 kWh
8.64 kW$1.31$11,358$7,9511195 kWh
10.8 kW$1.32
$14,308$10,0161494 kWh
11.52 kW$1.31$15,065$10,5461594 kWh
12.96 kW$1.29$16,754$11,7281793 kWh
14.4 kW$1.34$19,255$13,4791992 kWh
18 kW$1.29$23,290$16,3032490 kWh
21.6 kW$1.30$28,041$19,6292988 kWh
28.8 kW$1.27$36,636$25,6463984 kWh

Solar System Costs (Off-Grid)

Off-grid systems cost a lot more because you need to add batteries to store the energy you generate. Batteries are a significant expense. We estimate you might spend $8,000 to $13,000 to power a 5 kW system for the first 10 years of ownership.

The chart below shows the cost to purchase an off-grid system with an appropriately sized battery bank. While lithium batteries are much more expensive up front, the cost of ownership levels out in the long run because they last 2-3 times longer than lead-acid batteries.

We have paired the system with our least expensive battery bank – in most cases, a set of appropriately-sized Crown flooded lead-acid batteries.

Take a look at our comparison of lead-acid vs. lithium batteries to see the math on battery costs for off-grid systems.

System SizeCost Per WattCost (before tax credit)Cost (after tax credit)Daily Output (summer)Daily Output (winter)
1.22 kW$6.41$7,818$5,4735.49 kWh2.74 kWh
1.83 kW$4.79$8,759$6,1328.23 kWh4.12 kWh
2.74 kW$3.52$9,638$6,74712.35 kWh6.18 kWh
3.66 kW$3.23$11,820$8,27416.47 kWh8.23 kWh
4.57 kW$2.77$12,673$8,87120.59 kWh10.29 kWh
5.49 kW$3.13$17,196$12,03824.7 kWh12.35 kWh
7.32 kW$3.75$27,430$19,20132.94 kWh16.47 kWh
9.15 kW$3.18$29,136$20,39541.17 kWh20.59 kWh
10.98 kW$2.81$30,842$21,58949.41 kWh24.7 kWh
13.72 kW$2.82$38,727$27,10961.76 kWh30.88 kWh
16.47 kW$2.51$41286$28,90074.11 kWh37.06 kWh

Solar Panel Installation Costs

In addition to equipment costs, you’ll need to figure out a way to install your system. One option is to have a local contractor install it for you. In these cases, they may charge you anywhere from 75 cents to $1.50 per watt for the installation. $1/watt is a good benchmark to estimate installation costs.

If you want to figure out your “all-in” cost of going solar, pick a system above and find the wattage. 1 KW = 1000 watts, so for example, a 7.8KW system is 7800 watts. At $1/watt, a contractor might charge you an additional $7,800 to install your system.

There are several factors that influence how much your installation will cost, the main one being the availability of qualified contractors in your area. To learn more about installation costs, check out our article: “How to Find a Solar Installer You Can Trust.”

The other option is a do-it-yourself installation. It turns out this is easier than it sounds – it’s a matter of bolting the racking together and fitting the panels in place. Even without DIY experience, many of our customers can get their system built in a weekend and save thousands on installation costs.

Factors That Affect Solar Panel Prices

1. Technology advancements.

The first computer, the Harvard Mark I, filled an entire room and took more than 15 seconds to complete one division problem. Now, we can buy powerful computers that fit in our pockets for just a couple hundred dollars.

I bring this up because solar panels are following the same growth trajectory. Thanks to rapid technological advancements, panel prices have consistently dropped 6-8% per year.

For example, in 2012 you could buy an Astronergy 235W panel for $275. Today, you can buy a 280W Astronergy panel for $155.

We’ll look at historical pricing trends later in this article, but this is the main factor that dictates how much solar panels cost. Advancements in technology have made panels much more affordable, and future developments will shave prices even further.

2. Market Forces (Tariffs, Subsidies, etc.)

While prices have trended steadily downward over the past few decades, we’ve also hit a few “bumps in the road” in the form of tariffs, regulations and other political influence on the solar industry.

For example, recent tariffs on materials like aluminum and steel, as well as products specific to the solar industry, caused a temporary uptick in prices earlier this year.

However, these tend to be blips on the radar rather than lasting changes. The long-term trend shows that solar panel prices are consistently falling.

3. Panel Material

There are two main types of panels: monocrystalline and polycrystalline, or mono and poly for short. Mono panels have traditionally been more efficient than poly panels.

However, new variations on panel technology (including PERC and half-cut cells) have made the distinctions less clear-cut. Today, you can find poly panels equipped with newer technology which are comparable in efficiency to traditional mono panels.

In the end, your best bet is to check the spec sheet for an efficiency rating, then go with whatever panel gives you the best bang for your buck. Take a look at our article on the best solar panels of 2018 for a side-by-side comparison.

4. American vs. Imported

American-made goods cost more to manufacture, mainly due to the high cost of labor. Solar panels are no exception: American panels cost more than those imported from places like China or Germany.

Companies like SolarWorld USA and Mission Solar make their panels in America, while Astronergy panels are a bit cheaper because they import from their manufacturing plants overseas.

5. Wattage

As technology improves and panels get more efficient, the wattage on each panel goes up. The physical size of the panel doesn’t change (most are 60 or 72 cells), but the efficiency means you can squeeze more production from each cell.

When I put solar on my home, I held out until Astronergy upgraded from 305W to their new line of 310W panels. That was in 2014. Now, the successor to that line of panels is sized at 335W. In four years, technological advancements allowed them to squeeze an extra 25 watts of output into the same physical form factor.

As you compare panels, the best metric to go by is cost-per-watt. As long as you have enough room on your property to build your system, don’t worry too much about size or wattage for individual panels. Just focus on how much you pay per watt of output for your entire system.

6. Supply & Demand

The last big factor is supply and demand.

60 and 72-cell panels cost less because they are widely used and manufacturers can sell them by the container. The economies of scale drive the manufacturing price down, which makes the cost-per-watt on these panels much lower.

On the other hand, specialty panels (like flexible/industrial panels or those with very low wattage) get produced in small quantities. The smaller manufacturing run means higher production costs get passed on to the consumer.

Historical Solar System Pricing Data (Since 1998)

Lastly, here’s some context on the historical price of solar power systems over the past 20 years. This chart shows the average cost to install a residential solar power system for every year dating back to 1998.

This data has been stitched together from reports by SEIA and NREL.

YearCost-per-watt (systems)

If you’re just starting to research the solar landscape, hopefully this data is a good starting point to help you figure out how much it costs to go solar. For more personalized advice, grab a copy of your electric bill and head to our solar cost calculator, which can tell you what size system you need based on your energy usage patterns.

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Install of the Month – October 2018

Install of the Month – October 2018

October’s Install of the Month feature comes with a little bonus: video! This month’s winner Ryder M was kind enough to give us a quick tour of the 4.2 kW grid-tied system he built out in Petaluma, CA. Take a look:

Ryder started to consider solar because it “felt like the right thing to do,” and the financial incentives were enough to get him to take the leap. With local electricity rates a good 30% above the national average, Ryder’s system is sized to knock $988 off his electric bill on a yearly basis.

After taking the value of the federal tax credit into account, he’s looking at a 7-8 year payback period to recoup the up-front cost of his system. Since his panels are warrantied for 25 years, he’s got plenty of time to profit from his investment into solar.

Ryder had some past DIY experience remodeling his home, so he was more than comfortable hooking up his system himself. In spite of some complications during the inspection, he completed the build in one day and said it was one of the easiest (and most rewarding) DIY projects he has worked on to date.

With local electricity rates a good 30% above the national average, Ryder’s system is sized to knock $988 off his electric bill on a yearly basis.

Here’s what Ryder had to say about his project:

What type of solar system did you install?


What was your primary reason for adding solar to your home?

It felt like the right thing to do to as well as financially beneficial.

Did you have any previous DIY experience?

I’ve done a few DIY projects with varying degrees of success, kitchen and bathroom remodel as well as an addition that was a bit more involved. Installing this solar system was one of the easiest (& most rewarding) projects.

What was the most difficult part of the installation?

When installing the roof racks, I used a high powered stud finder to locate the roof joists, however, the accuracy through the composite shingles was not as accurate as I’d hoped. I had much better results using the bottom of my fist to tap and listen/feel for the joist.

Not sure if this should be shared…I did have some difficulty with the SMA rapid shutdown device, and although I’m certain it was wired correctly, it did not start working properly until it had gone through a hard reset (removed power completely and then brought power to it). The main challenge was my inspector, who was certain that the SMA Sunny Boy 5.0 was made of plastic and therefore my metal conduit was not properly grounded. I lobbied and lost so I had to put ring grounding nuts on the conduit penetrations.

How many helpers did you have?

I had one helper which was more than enough.

Did you hire a contractor?

No, I did not hire a contractor.

Were there any unforeseen additional parts or tools you needed?

A chalk line was helpful in installing the IronRidge mounting system.

How long was the full installation process?

One day and the system was up and running offsetting 100% of my power usage.

How did it feel to get your solar project finished?

I was extremely happy with the installation process. Wholesale Solar made the permitting and installation process easy by being there to answer any questions I had.

Who else did you consider before choosing Wholesale Solar?

I considered using Tesla, however, I really liked the package designs from Wholesale Solar and feeling like I was part of the process.

What was your total cost to install solar?

I installed a 4.2KW system for less than $12,000.

How much did you save on your taxes?


Components in Ryder’s custom system:

Ryder's Solar Breakdown:

  • System Cost: $12,000
  • Yearly System Output: 6,338 kWh per year
  • Total time to install: 1 day
  • Federal Tax Incentive: Qualifies for $4,000 U.S. Federal Tax Credit
  • Utility Rates: 15.59 cents/kWh

It’s Your Turn

Thinking about making the switch to solar? Download our Getting Started Guide for a crash course on how to buy a solar energy system that covers your needs.

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Lead-Acid vs Lithium Batteries: Which Are Best For Solar?

Lead-Acid vs Lithium Batteries: Which Are Best For Solar?

Todd Evris, Senior Sales Tech @ Wholesale Solar
TODD EVRIS, Senior Sales Tech at Wholesale Solar​

Welcome to our Solar 101 series! This article goes over a choice you’ll need to make if you buy a battery-based solar system, either to move off the grid or to add energy storage to your grid-connected home.

Specifically, we’re going to look at lead-acid vs. lithium-ion batteries — the two main battery types used for solar. Here’s the summary:

Lead-acid is a tried-and-true technology that costs less, but requires regular maintenance and doesn’t last as long.

Lithium is a premium battery technology with a longer lifespan and higher efficiency, but you’ll pay more money for the boost in performance.

Let’s go over the pros and cons of each option in more detail, and explain why you might choose one over the other for your system.

Lead-acid vs. Lithium Solar Batteries: The Basics

When you build a solar system, you have three main battery options:

Flooded Lead-Acid (FLA)

The distinguishing feature of FLA batteries is that the plates are submerged in water. These must be checked regularly and refilled every 1-3 months to keep them working properly.

Falling behind on upkeep can shorten the life of the batteries and void the warranty. FLA batteries also need to be installed in a ventilated enclosure to allow battery gases to escape.

Sealed Lead-Acid (SLA)

SLA batteries come in two types, AGM (Absorbent Glass Mat) and Gel, which have many similar properties. They require little to no maintenance and are spill-proof.

The key difference in AGM vs. gel batteries is that gel batteries tend to have lower charge rates and output. Gel batteries generally can’t handle as much charge current, which means they take longer to recharge and output less power.


The best lithium battery chemistry for solar applications is Lithium Iron Phosphate, shorted to LiFePO4 or LFP batteries. This new technology lasts longer and can be put through deeper cycles. They also require no maintenance or venting, unlike lead-acid batteries.

Lithium batteries cost more up front, but the extra efficiency means you can potentially spend less per kilowatt-hour of capacity over the lifespan of the battery.

Lead-acid vs. Lithium Batteries: Pricing Breakdown

Let’s look at how much it would cost to build a battery bank with all three options.

We’re not just interested in the up-front cost, but also the cost of ownership over the life of the system. As an example, we’ll look at how much the batteries would cost to power this 5.13 kW off-grid system, which we sell for $12,899 at the time of publication.

In an off-grid environment, you want to look at the estimated cycle life since you are cycling your batteries on a daily basis. This system would produce an estimated 23.08 kWh per day in the summer and 11.54 kWh per day in the winter.

Here’s how much it would cost to buy batteries for that system over the first 10 years. We are comparing the following battery banks:

Lead-Acid vs. Lithium Batteries: Cost Breakdown

A Few Notes About This Chart

We are estimating that the lead-acid batteries will be replaced 3 times over a 10 year period, the lifespan of 1 lithium battery. This comparison is based on the length of the warranty offered by the manufacturers.

We’ve done our best to give an apples-to-apples comparison of these batteries based on their printed specs. However, in real-world applications, factors like discharge depth, temperature, charging source, overall system design, and your willingness to perform regular maintenance will affect the true performance of your batteries.

5 Key Differences Between Lead-acid and Lithium Batteries

1. Cycle life

When you discharge a battery (use it to power your appliances), then charge it back up with your panels, that is referred to as one charge cycle. We measure the lifespan of batteries not in terms of years, but rather how many cycles they can handle before they expire.

Think of it like putting mileage on a car. When you evaluate the condition of a used car, mileage matters a lot more than the year it was produced.

Same goes for batteries and the number of times they’ve been cycled. A sealed lead-acid battery at a vacation home may go through 100 cycles in 4 years, whereas the same battery might go through 300+ cycles in one year at a full-time residence. The one that has gone through 100 cycles is in much better shape.

Cycle life is also a function of depth of discharge (how much capacity you use before recharging a battery). Deeper discharges put more stress on the battery, which shortens its cycle life.

2. Depth of Discharge

Discharge depth refers to how much overall capacity is used before recharging the battery. For example, if you use a quarter of your battery’s capacity, the depth of discharge would be 25%.

Batteries don’t discharge fully when you use them. Instead, they have a recommended depth of discharge: how much can be used before they should be refilled.

Lead-acid batteries should only be run to 50% depth of discharge. Beyond that point, you risk negatively affecting their lifespan.

In contrast, lithium batteries can handle deep discharges of 80% or more. This essentially means they feature a higher usable capacity.

3. Efficiency

Lithium batteries are more efficient. This means that more of your solar power is stored and used.

As an example, lead acid batteries are only 80-85% efficient depending on the model and condition. That means if you have 1,000 watts of solar coming into the batteries, there are only 800-850 watts available after the charging and discharging process.

Lithium batteries are more than 95% efficient. In the same example, you’d have over 950 watts of power available.

Higher efficiency means your batteries charge faster. Depending on the configuration of your system, it could also mean you buying fewer solar panels, less battery capacity and a smaller backup generator.

4. Charge Rate

With higher efficiency also comes a faster rate of charge for lithium batteries. They can handle a higher amperage from the charger, which means they can be refilled much faster than lead-acid.

We express charge rate as a fraction, such as C/5, where C = the capacity of the battery in amp hours (Ah). So a 430 Ah battery charging at a rate of C/5 would receive 86 charging amps (430/5).

Lead-acid batteries are limited in how much charge current they can handle, mainly because they will overheat if you charge them too quickly. In addition, the charge rate gets significantly slower as you approach full capacity.

Lead acid batteries can charge around C/5 during the bulk phase (up to 85% capacity). After that, the battery charger automatically slows down to top off the batteries. This means lead acid batteries take longer to charge, in some cases more than 2x as long as a Lithium alternative.

5. Energy Density

The lead-acid batteries featured in the comparison above both weigh around 125 pounds. The lithium battery checks in at 192 pounds.

Most installers can handle the extra weight, but DIYers might find the lithium batteries more challenging to install. It’s wise to enlist some help lifting and moving them into place.

But that comes with a tradeoff: the energy density of lithium batteries is much higher than lead-acid, meaning they fit more storage capacity into less space.

As you can see in the example, it takes two lithium batteries to power a 5.13 kW system, but you’d need 8 lead-acid batteries to do the same job. When you take the size of the entire battery bank into account, lithium weighs less than half as much.

This can be a real benefit if you need to get creative with how you mount your battery bank. If you are hanging an enclosure on the wall or hiding it in a closet, the improved energy density helps your lithium battery bank fit into tighter spaces.

Lithium vs. Lead-Acid: Which Should You Choose?

Lithium and lead-acid grade out at comparable prices over the life of ownership, but lithium is a much steeper investment up front. We wouldn’t recommend it unless you use your system on a daily basis.

Here are the battery types we’d recommend for a variety of applications:

Full-Time Off-Grid Residence

Flooded Lead-Acid or Lithium.

If you live off the grid full-time, your best bet is FLA (if you don’t mind regular maintenance) or the premium Lithium option for heavy use.

Off-Grid Cabin / Vacation Home

Sealed Lead-Acid.

If you own something like a hunting cabin or a vacation home, you’ll only be there a few times a year. That means you won’t be able to keep up with the maintenance required of FLA batteries.

Spend a bit extra on SLA instead. They’re zero-maintenance, so they won’t die if they sit idle for a few months.

Battery Backup System

Sealed Lead-Acid.

Let’s say you are building a system with battery backup for emergency power outages. Ideally, you will only use those batteries once a year (a few times if you live in an area with an unreliable power grid). They won’t see enough use for you to invest into lithium, and you don’t want to perform maintenance on FLA batteries you use once a year.

Go with SLA, which (again) don’t require upkeep.

Remote Industrial Use

Sealed lead-acid or lithium.

The decision-making process is pretty much the same here. Lithium could be worth it to power an industrial site that sees heavy use. If you are powering basic monitoring equipment at a remote outpost, SLA will get the job done cheaper, and you still won’t have to worry about maintenance visits.

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Pros and Cons of Solar Power

Pros and Cons of Solar Power

Derk @ Wholesale Solar
Derk Shelly, Solar Tech at Wholesale Solar

We’re huge advocates for solar energy, but we recognize it isn’t the right solution for everyone. While solar is sustainable and ultimately cheaper than utility power in the long run, it also requires a significant up-front investment and doesn’t work for every property / roof type.

The ultimate question is whether the advantages of solar power outweigh the disadvantages. In this article, we’ll present the pros and cons of solar energy so that you can decide if going solar makes sense for you.

Advantages of Solar Power

  • Energy independence
  • Eliminate electric bill
  • Profitable investment
  • Strong government incentives
  • Sustainable
  • Low maintenance
  • Improves property value

Disadvantages of Solar Power

  • Expensive up front
  • Takes up space
  • Energy storage is expensive
  • Not right for every property
  • Makes less sense if you rent

Advantages of Solar Energy

1. Energy independence

Traditionally, most people depend on the utility company to supply them with power. When the grid goes down, going without power for an extended period of time can be a helpless feeling.

If you own a solar system with energy storage, you can keep generating power during emergencies. That peace of mind is invaluable if you live in a place with an unreliable power grid, or are regularly threatened by severe weather conditions like tornadoes and hurricanes.

Utility power also restricts people who want to live off the grid, like a remote hunting cabin. Solar can generate energy where it would be too expensive to run power lines.

It’s liberating to have complete control over where and how you produce energy. And with electricity costs rising, it also feels great to lock in a fixed rate for your electricity over the next few decades.

2. Eliminate your electric bill

Who doesn’t love one less bill coming out of their paycheck? With a properly sized system, you can drastically reduce or completely eliminate your electric bill.

Even if you extend your payback period by taking out a loan to finance your project, you still enjoy reduced electricity costs from the moment you flip the switch on your PV system.

This is the most exciting part of solar for many people: bringing the system online and watching their power bill disappear.

3. (Grid-tied) solar is a profitable investment

If you buy a grid-tie system (the type of system you build if you have access to power lines), you can expect your investment into solar to turn a profit in the long run.

Assuming the national average for cost of electricity, it would take about 6.08 years to recoup your investment into a $10,000 system. Beyond that point, you start to generate a profit from your system.

In fact, over the 25-year life of the solar panel warranty, we estimate you would earn $31,031 on energy bills after clearing the initial payback period.

4. Lucrative government incentives

The investment into solar becomes even more appealing when you take government incentives into account. State and federal programs are in place to encourage people to invest in renewable energy. Claiming these can put a ton of cash back in your pocket.

The main incentive is the 30% federal tax credit for going solar. Under this program, you are eligible to receive 30% of the total installed cost of your system as a tax credit at the end of the year.

This credit is a dollar-for-dollar reduction of your tax liability. Every dollar in credit is a dollar less that you pay in taxes at the end of the year. So if you buy a $10,000 system and receive a $3,000 credit, you will owe $3,000 less in taxes at the end of the year.

While the federal tax credit is the largest solar incentive, don’t skip out on local incentives, either. Depending on where you live, certain jurisdictions offer local incentives that can be claimed in addition to the federal credit.

5. Sustainability

A sustainable energy source is one that we can use without depleting the source of power. Oil and gas are not sustainable, because we consume those resources as we use them.

In contrast, solar is sustainable because the source of energy (sunlight) is constantly replenished. We can use solar energy without worrying about whether we will deplete the Earth’s natural resources for future generations.

6. Low maintenance

Solar systems don’t have a lot of moving parts. As a result, they rarely break down or require maintenance to keep them running optimally.

Panels are warrantied to last 25 years, but many have a much longer lifespan. (See our article “How Long Do Solar Panels Last?” for a study on the true lifespan of panels.) You rarely, if ever, need to fix or replace panels.

It’s common to replace your inverter at least once over the life of your system, as inverters are typically warrantied for 10-15 years. But that’s about the only scheduled maintenance you will encounter for grid-tied systems.

Off-grid systems are a bit more complex because they must include batteries, which often require routine maintenance. Specifically, flooded lead-acid batteries (the cheapest option available) must be checked and refilled with water regularly to keep them functioning properly.

However, building a grid-tied system eliminates the need for batteries, so most people will rarely need to check in on their system for maintenance or replacements.

7. Improves property value

Studies of the real estate market have proven that homes equipped with a solar power system sell for more than their non-solar counterparts.

In fact, the Lawrence Berkeley National Library conducted research that shows that solar homes fetch an extra $14,329 on average, a 3.74% increase over non-solar homes.

It’s no question that solar power systems substantially increase property value. Home buyers see solar as a major selling point, and they’re willing to pay a premium to move into a solar-powered home.

Disadvantages of Solar Energy

1. It’s expensive to get started

Solar is expensive – at least up front. To build a system that would power the average American home (which uses 897 kWh of electricity every month), you might pay $8,000-$10,000 depending on the products you choose.

That doesn’t include the cost of shipping or installation.

Of course, you’re paying for at least 25 years of energy production up front. In the long term, you break even on the investment and start to make money, but that doesn’t change the fact that not everyone has thousands of dollars in their pocket to get their solar dreams off the ground.

The up-front cost is the main barrier to going solar. Financing options are available, and the payback period is quite favorable even when you take interest into account. However, not everyone wants to be on the hook for loan payments.

2. It takes up a lot of space

Standard solar panels measure 39” wide by either 66” to 72” tall (for 60-cell and 72-cell panels, respectively).

To offset the national average of 897 kWh of electricity per month, you’d need at least 24 panels. In an 8×3 configuration, that system will be 26 feet wide by 44 feet tall. That’s going to take up a lot of room on your roof or in your yard.

Most people opt for a roof mount because it takes advantage of space that would otherwise go unused. If you need to design around odd angles and obstructions, you can always split the panels into sub-arrays, like our customer Luis did when he built his system:

Wholesale Solar customer Luis split his system into sub-arrays to work around the shape of his roof. We featured it as our Install of the Month in September 2018.

3. Energy storage is expensive.

Batteries are the single most expensive component to a solar power system. Not all systems require batteries, but they become mandatory when you go off the grid. They are also required if you need to supply backup power to your grid-tied property.

(Grid-tied systems don’t automatically provide backup power during outages. That’s a common misconception. For backup power, you need a grid-tie system with energy storage – essentially, a battery designed to work with grid-based systems.)

Expect to pay a lot more money when you add batteries to a system. Battery banks cost at least a few thousand dollars, and if you buy high-end lithium batteries for a full-scale off-grid system, that’s easily a 5 figure investment into the batteries alone.

Furthermore, batteries don’t last as long as the other parts of your system. Lead-acid battery warranties range from 1 to 7 years, meaning you’ll replace them 4 or 5 times before the panel warranty is up.

Lithium batteries justify their high price tag by lasting 10-15 years, but you’re still in for at least one replacement over the life of your system.

4. It’s not right for every property

Not every property is a good fit for solar power.

Some properties are simply too cramped to find any space to build a system. Others are covered in shade and wouldn’t get the sunlight required to generate enough energy.

While there are technologies like shade optimizers and custom racking to mitigate these concerns, they only accomplish so much. If you don’t have anywhere to put your panels, it’s going to be a real challenge to make solar work for your home.

5. It’s better if you own your home (and won’t be moving for a while)

Solar can be a profitable investment, but the payback math assumes you’ll be living in the same property for the full duration of the 25-year warranty.

It takes several years to break even on the initial cost of the system before you start to pocket the savings from your energy bill. Solar makes a lot less sense if you don’t own your home, or have the urge to move within the next few years.

The good news is that because solar increases property values, you are likely to recoup your investment into the system when you go to sell your home. But most people who go solar do it because they want to be self-sufficient and generate their own (less expensive) electricity for the next few decades.

Think about whether you’ll stick around for a while in your current property before you make the long-term investment into solar.

Questions? Consult with a solar expert.

Still not sure if the advantages of solar outweigh the disadvantages? You can always schedule a consultation with one of our expert design techs. We’ll answer questions, clear any design hurdles, and help you decide if solar is right for you.

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Grid-tied vs. off-grid solar: are you sure you want to live off the grid?

Grid-tied vs. off-grid solar: are you sure you want to live off the grid?

Todd Evris, Senior Sales Tech @ Wholesale Solar
TODD EVIRS, Senior Sales Tech at Wholesale Solar​

Let’s clear up one of the most common misconceptions in the solar industry: the idea that you must go “off the grid” to go solar.

This article will explain the different types of solar power systems: grid-tied vs. off-grid.

Many people call us looking for help going “off the grid.” But when we explore their motivations a bit more, we find that what they actually want is to ditch their utility company.

Really, they want to go solar to be independent, generate their own power, and stop paying money to the utility every month.

If this sounds like you, read on. Because you can accomplish all these things without going off the grid. It’s called grid-tied solar, and it’s the preferred type of solar system for any property that has access to power lines.

Why? Because it’s cheaper. No, really, it’s a lot cheaper. You should always build a grid-tied system when you have the option to do so.

Let me explain why.

Grid-tied vs. off-grid: what do these terms really mean?

The difference between grid-tied and off-grid solar revolves around where you store the energy you generate.

Every system needs a place to store energy so that it can be used on demand. Your panels only generate charge when the sun is out during the day, but you still need a way to turn the lights on in the evening.

With grid-tied systems, the energy you generate is sent into the utility grid. Your panels feed electricity into the grid, which can be distributed to other people in your area.

In return, you receive a credit for the energy you generate, which you can use any time. Think of it like a transaction at the bank: you are allowed to withdraw as much as you deposit. This is what allows you to keep the power on when the sun goes down.

Off-grid systems are different. With no access to the utility grid, you must find another solution to store energy.

For that, you’ll need to add a battery bank to your system. Batteries provide dedicated energy storage. Without any access to power lines, batteries are mandatory for off-grid solar systems.

In summary: grid-tied systems store energy in the power grid, while off-grid systems store energy in batteries.

When in Doubt, Go Grid-Tied

It doesn’t cost anything extra to store electricity in the grid. But adding batteries to an off-grid system is a significant extra cost.

In fact, batteries are the most expensive part of a solar system. They represent as much as 30-40% of the cost of an off-grid system.

Batteries alone are a 4-5 figure investment. For that simple reason, we always recommend connecting a grid-tied system if you have the option.

Why spend thousands of dollars on batteries if you don’t need them?

What about Energy Storage Systems?

Right now you might be thinking, “what if I’m connected to the grid but still need energy storage?”

For that, there’s a third system type. It’s called grid-tied with battery backup (a.k.a. energy storage systems).

These systems connect and store energy in the grid, but they also include batteries. There are two reasons you might want to add energy storage to a grid-tied system:

  • Store backup power in case of outages (useful if you live in an area with an unreliable power grid or severe weather)
  • Store energy so you can use it or sell it later (useful if you live in an area with a certain utility billing structure, such as time of use rates, high demand charges, or no net metering)

The same caveats apply: batteries aren’t cheap, and adding them to your grid-tie system lengthens your payback period. But in some places, it’s invaluable to add security against harsh weather, outages, and inflated electricity costs.

Energy storage systems provide extra peace of mind and help you get the most out of the electricity you generate. It’s up to you to decide if it’s worth it to spend more on your system for the added flexibility.

Continue Your Research

Have any more questions about the process of going solar? Check out our Getting Started Guide, a crash course on the basics of designing and installing your solar energy system.

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What is a kilowatt hour?

What is a kilowatt hour?

Todd Evris, Senior Sales Tech @ Wholesale Solar
TODD EVIRS, Senior Sales Tech at Wholesale Solar​

Kilowatt hours measure energy usage and production.

If you’re thinking about going solar (or just want some advice on how to reduce your energy consumption), you’ve probably come across the term kilowatt-hours.

But exactly what is a kilowatt hour? And why do we need to know how many we use each month?

First things first: What is a kilowatt hour?

A kilowatt-hour (kWh) is a measure of how much energy you use over a set period of time. It determines how much you pay for electricity each month, since the utility company bills you on a cost-per-kWh basis.

Here’s how it works.

Every appliance has a rating which measures how many watts of power it uses. For example, an oven may be rated at 2000 watts, or 2 kilowatts. (1 kilowatt equals 1000 watts.)

If you cook something in that oven for 30 minutes, here’s how to calculate the total energy used:

2 kilowatts x 0.5 hours = 1 kilowatt-hour (kWh) of energy used.

To determine how many kilowatt-hours an appliance uses, simply estimate how long you use it each day, then multiply by the wattage rating.

Easy so far. But how can you use this information?

Measuring Electricity Cost Per kWh

Utility providers track your usage with a meter and bill you based on total kilowatt-hours consumed.

In America, the average cost of electricity is about 12 cents per kWh. However, that can fluctuate based on where you live as well as what time of day you use the electricity.

Many utility providers bill variable rates for Time of Use (called TOU rates). If you are familiar with the concept of surge pricing, that’s what this is: electricity costs more when lots of people are using it.

There’s less demand during the day, so the rate is lower. When people come home from school and work, the rate goes up because the demand is higher.

You can usually find the breakdown of TOU rates on your utility provider’s website, or right on the electric bill.

But it might be quicker to measure how those costs average out based on your usage patterns. Divide your monthly payment by your total kWh usage to get your average cost of electricity:

$130 electric bill / 1,237 kWh used = 10.51 cents per kWh

How Kilowatt Hours Factor into Solar System Sizing

Understanding kilowatt hours is key to being able to design a system that works. Without that information, your system might be too small to cover your entire energy bill (or too large, in which case you’re just throwing money away and diluting the value of your investment).

So we use your kilowatt-hour usage as the starting point in the system design process. Once you know how much energy you use, you can size your system components to match usage demands.

Our solar cost calculator can provide a ballpark system size and cost based on your kWh usage. You can also read about the math behind this formula in full detail in our article: “How Many Solar Panels Do I Need?”

To get an accurate calculation, there are a few things to take into account:

  • Average monthly usage
  • Peak usage (it will spike when it’s snowing or 100 degrees outside)
  • Future changes in energy usage patterns

Your system should be sized to cover you year-round. Make sure to take a year’s worth of usage into account, since freezing winters and 100+ degree summers tend to skew the usage data.

Also, carefully consider whether your usage will increase in the future. If you plan to have kids, build a new shed on your property, or buy an electric vehicle, those things will eat up a lot more energy and your kWh usage will climb.

You don’t need to build for future usage now, but it helps to plan your system with expansion in mind. Certain pieces of equipment are designed to facilitate expansion, like microinverters and lithium batteries.

Read more: Best Grid-Tie Solar Inverters >> | Best Solar Batteries >>

Why kWh usage is so important for off-grid properties

When you’re connected to power lines, finding all this information is simple. Just grab your latest electric bill. Your provider prints your kWh usage on your bill every month, and some list their cost-per-kWh rates as well.

This makes it easy to do the math on system size. You can also drop the number into our solar cost calculator for a quick ballpark cost and sizing estimate.

Off-grid systems are different.

When you go off the grid, you likely won’t have a precedent to figure out how much energy you will use. Instead, you’ll need to fill out a load evaluation sheet, listing each appliance manually and estimating how much you will use them each day.

Daily kWh usage is crucial to building a system that can supply uninterrupted power to your off-grid property.

You don’t want to look at your yearly usage, but rather your needs on a day-to-day basis. The goal is to store enough power to cover yourself if any problems arise (like severe weather or equipment failure).

People tend to store about a day’s worth of power in their battery bank, and lean on a generator for backup. But you can plan for more cushion with your battery bank if you want the extra peace of mind.

To estimate daily usage, find the kWh usage (wattage x hours in use each day) for every large appliance in your off-grid home and add them all together.

The total is your daily usage, which can be used as the basis to size your system:

Daily kWh Usage ÷ Sun-Hours ÷ 0.9 (inefficiency factor) = Minimum Solar Array Output

How to Use Your kWh Usage to Estimate the Cost of Solar

Got your kWh usage on hand? Plug that info into our solar cost calculator to see how much it might cost you to go solar.

Grid-tied systems tend to pay for themselves quickly. It’s reasonable to expect to break even on your investment within 5 years.

Off-grid systems cost more and come with different expectations. Unlike grid-tie systems, the value in off-grid systems isn’t necessarily making a profit from your investment.

Instead, it should be viewed as a means to generate energy where there is no access to power lines. To determine whether off-grid solar is the right choice, you should compare it against the cost of other methods to generate power, like wind turbines or gas generators.

Interested in solar, but not quite sure where to start? Download our Getting Started Guide to get up to speed with the essentials.

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Install of the Month – September 2018

Install of the Month – September 2018

Congratulations to our September Install of the Month winner Luis M! Luis first got in touch with us back in the middle of 2017 to build a grid-tied system on his Spanish tile roof.

Luis lives in Covina, CA (near Los Angeles) where the cost of electricity is nearly 35% higher than the national average. Facing electric bills well over $250 during the sweltering summer months in Southern California, he was eager to run the math on solar energy to find out whether it was worth the investment in the long run.

When he did the math, he found that he would save $3,000 a year in electricity costs alone. After claiming the 30% Federal Tax Credit for investing in renewable energy, he knew it would cost around $12,000 to get a system built and installed.

That meant his investment would pay for itself in less than 4 years—pretty appealing, given the 25-year wararnty on the solar panels.

“At a 7% return, he figured that money was worth about $1,050 per year on the stock market. But it would return over $3,000 a year in energy savings. Even with the penalty for cashing out from the retirement fund early, it was worth it.”

Luis didn’t have the budget to buy the system outright, and he didn’t want to be on the hook for loan payments. So he did something a bit unusual: he pulled $15,000 from his retirement fund.

At a 7% return, he figured that money was worth about $1,050 per year on the stock market. But it would return over $3,000 a year in energy savings. Even with the penalty for cashing out from the retirement fund early, it was worth it.

Once he decided to pull the trigger, he had to figure out how to mount the system on his beautiful Spanish tile roof. For that, we set him up with the Quick Mount flashing system. Rather than cutting tiles to fit them for hooks, the entire tile is replaced with the fitted Quick Mount base.

Luis took a slow and steady approach to installation, working around the unbearable summer heat (made worse by his tile roof retaining heat). He was determined to complete the installation with his family members, which saved him about $4,000 in labor on the project. 

Once it was completed, the payoff was immediate: his first electric bill came out to negative $4.40, with the utility company owing him a credit for the surplus electricity he produced.

“[Finishing the project] felt good, but not as good until you get the first electrical bill: -$4.40. That was back in February. By the time it gets full sunlight hours, it should produce an extra 10% of electricity close to 950Kw this month.”

-Luis M.

Here’s what Luis had to say about his project:

What type of solar system did you install?


What was your primary reason for adding solar to your home?

It made a lot of sense to install a solar system by my self, not only for the savings in the electricity bill but it’s also great for the environment.

Did you have any previous DIY experience?

Yes, but not in solar installations. I learned everything from the how-to videos on the website.

What was the most difficult part of the installation?

The summer heat, it was very hot on my tile roof.

I was also a little worried for the Santa Ana winds. I solved that worry by keeping the post separation to no more than three feet. Not that it was required, but just for peace of mind.

How many helpers did you have?

I only needed two people (family) on the actual panel installation. I didn’t want to drop one.

Did you hire a contractor?

Only for the actual final electrical connection from the inverter to the main panel. I did run all the conduit.

Were there any unforeseen additional parts or tools you needed?

At the end, I wanted to make sure I could monitor the whole system on the web, and I added a wireless link myself. Now I can check and monitor the solar system on my iPad.

How long was the full installation process?

Well, I added extra posts, I was in no rush. It took me six months for a 22-panel system. Let’s break it down: it took an average of 1 hour to install a post, times 48 post. Rails took about a couple of days, and panels two days this time with two people helping. Conduit and wires took a couple of days by my self. Then the final electrical was the electrician and their assistant.

The reason it took so long it was because of the summer temperatures and the tile roof. I had to replace the tiles I broke on the process. No big deal.

How did it feel to get your solar project finished?

It felt good, but not as good until you get the first electrical bill: -$4.40. That was back in February. By the time it gets full sunlight hours, it should produce an extra 10% of electricity close to 950Kw this month.

Who else did you consider before choosing Wholesale Solar?

I couldn’t afford to have my panels installed by a solar panel company. ( I had three estimates done). I also did not have any cash available.

What I did was, I took $15,000 from my Roth IRA. Let me break it down for you: that money makes an average of 7% a year on the stock market = $1,050. With my $15,000 solar system, it is going to create at least $250 a month, that’s $3,000.00 per year cash savings. I get $5,000 back from the government, that put the system at a cost of $10,000. Plus let’s add the penalty for cashing money out of your retirement, $1,500.00 in this case. Now the cost is $11,500, divided by $3000 a year of electricity savings. In 3 years 9 months, the system will pay for itself. In other words my investment of $15,000 is producing a 20% return on my money as I write this. By the way, after 3 years 9 months my system is going to give me net $3000 a year to put back in my IRA.

What was your total cost to install solar?

The solar system cost me around $13,000 at Wholesale Solar and around $2,000 for the extra help. That is $15,000. I calculated I did save about $4,000 worth of work myself.

How much did you save on your taxes?

A third, about $5,000.

Components in Luis’s custom system:

Luis's Solar Breakdown:

  • System Cost: $13,000
  • Cost of Labor: $2,000
  • Yearly System Output: 9,807 kWh per year
  • Total time to install: Estimated 80-100 hours over a 6-month timeframe
  • Federal Tax Incentive: Qualifies for $5,000 U.S. Federal Tax Credit
  • Utility Rates: 16 cents/kWh

It’s Your Turn

Thinking about making the switch to solar? Download our Getting Started Guide for a crash course on how to buy a solar energy system that covers your needs.

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The Federal Solar Tax Credit, Explained in Plain English

The Federal Solar Tax Credit, Explained in Plain English

The 30% Federal Solar Tax Credit can save you thousands when you switch to solar. But how does it work?

We’re here to explain the Federal Solar Tax Credit in plain English. If you want a basic overview of solar incentives without wading through the tax jargon, you’re in the right place.

What is the Federal Tax Credit for Solar?

When you install a solar power system, the federal government rewards you with a tax credit for investing in solar energy.

A tax credit is a dollar-for-dollar reduction of the income tax you owe. $1 credit = $1 less you pay in taxes. It’s that simple.

A quick but necessary disclaimer: we’re solar experts, not tax accountants! We do our best to give accurate advice, but please check with a professional to be sure you’re eligible to claim the credit.

For example, let’s say you owe $5,000 in federal taxes this year. If you claim a $3,000 tax credit, that pays off part of your liability. You would be left to pay just $2,000 in taxes after the credit is applied.

It’s different than a refund, because you have to owe taxes to claim the incentive. But since most people owe taxes, most people end up being eligible.

How much money do I save with the Federal Tax Credit?

Right now, the tax credit is worth 30% of your total system cost. This includes the value of parts and contractor fees for the installation.

If it costs $10,000 to buy and install your system, you would be owed a $3,000 credit.

You are only allowed to claim the credit if you own your system. This is why we’re strongly opposed to solar leasing if you can avoid it. If another company leases you the system, they still own the equipment, so they get to claim the incentives.

You still get the benefits of cheap, renewable energy. But missing out on the tax credit is a huge blow to getting a positive ROI from your system.

It makes more sense to finance instead. You’re still on the hook for a loan, but you retain rights to the incentives that help make solar such a sound investment.

How Long Will the Tax Credit Stay in Effect?

As the saying goes, “all good things must come to an end.”

Soon, the federal government will begin trimming back on its 30% tax credit incentive.

The credit steps down in value over the next few years, until it disappears completely for residential customers in 2022. Here’s the value of the federal tax credit over the next five years:

  • 2018: 30%
  • 2019: 30%
  • 2020: 26%
  • 2021: 22%
  • 2022: 0% (10% for commercial projects)
The rate of the federal tax credit for solar installations through 2022.
The Federal Tax Credit is slated to be phased out by 2022.

You can claim the credit in the same year you complete the installation.

The tax credit plays a major part in the return on investment you see from going solar. It won’t be around forever, but the good news is you still have at least another year to capitalize on the full 30% credit.

How do I claim the Federal Tax Credit?

So let’s get to the good stuff. What do you need to do to actually get your hands on this money?

Our first bit of advice is to keep all your receipts from the start. The more you spend on your project, the larger your credit – make sure to keep track of everything!

Here are some of the expenses that you are allowed to claim:

  • Solar equipment
  • Freight shipping costs
  • Solar consulting fees
  • Professional installer fees
  • Electrician fees
  • Engineer fees
  • Tools bought or rented
  • Wiring, screws, bolts, nails, etc.
  • Equipment purchased or rented (scaffolding or a man-lift, for example)
  • Permitting fees
  • Permitting service costs

Costs will vary depending on the approach you take to installation. Hiring a contractor is an expense that can be claimed.

You can also choose to install the system yourself. Although you can’t claim your own labor as an expense for the credit, you still come out far ahead on overall project costs.

The graph below shows a comparison of the total installed costs (post-Federal Tax Credit) of the same exact system when you choose to DIY, hire locally, or source the work to a national installer:

Solar Installation Costs after Federal Tax Credit has been applied

How to File Form 5695 With Your 1040 Individual Tax Return

Once you’ve spent the money, you’ll need to prove it to the government to claim your tax credit. For that, you need IRS Form 5695 to claim the residential energy credit.

If you file your own taxes, use the steps below to claim your Residential Renewable Energy Tax Credit. (You can find an in-depth walkthrough of this process with visual aids on EnergySage’s website.)

  • Gather all your expense receipts and put them in a safe place.
  • Confirm you are eligible for the tax credit. (If you own the system and owe taxes, you’re probably eligible. Check with a tax specialist if you’re not sure.)
  • Complete IRS Form 5965 to add up your renewable energy credits.
  • Add your renewable energy credit information to your typical form 1040.

That’s it!

We hope this serves as a good introduction to the Federal Tax Credit and helps you navigate the research process. If you need help from a solar designer, get in touch with us for a consultation. We’re happy to walk you through any questions you may have.

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