Nearly Half (45%) of American Homeowners Overestimate or Have No Idea About Solar Costs

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On March 15 and 16, 2022, SaveOnEnergy.com® commissioned a YouGov survey of 655 American adult homeowners to gauge their understanding of solar panel costs and incentive programs.

Nearly half (45%) of the homeowners overestimate or have no idea about the average cost of solar panels for a single-family home. According to the Center for Sustainable Energy, theaverage cost for a residential solar system ranges from $15,000 to $25,000 before any incentives. Only a fifth (20%) of homeowners were able to correctly estimate the cost before incentives, while 43% underestimate that the average cost of solar was less than $15,000, 12% overestimate the cost to be $30,000 or more and 24% are clueless about the pre-incentive costs.

Additionally, a little over a fifth (22%) of homeowners correctly estimate the average cost of solar for a single family home after incentives to be roughly between $10,000-$24,999. While 36% underestimate that the average cost to be less than $10,000, 9% overestimate the cost to be $25,000 or more, and roughly a third (32%) of American homeowners said they have no idea how much solar panels cost post-incentives.

There is also a generational information gap about incentives and the cost of solar. Baby Boomer homeowners (ages 57-75) are twice as likely to say they have no idea about the average cost of solar panels before incentives than Millennial homeowners (ages 25-40) (30% vs. 15%). Nearly one-fourth (23%) of Gen X homeowners (ages 41-56) say they are clueless about pre-incentive costs. There is a smaller gap when it comes to perceptions of average solar costs after incentives.

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Over One in Four (26%) American homeowners are unaware of any solar incentives

Solar incentives:including the federal solar tax credit, known as the Residential Clean Energy Credit, as well as state and/or local incentives like rebates, net metering, and low-interest rates. (This definition was provided to survey participants.)

Over half (57%) of American homeowners have heard of solar incentives, but they do not know much about them. 17% of homeowners said they have heard of solar incentives and they have a good understanding of them. Of the 17%, more than a third (36%) also said that they did not know how these incentives affect the final cost of solar panels.

Not taking advantage of government incentive programs would be similar to throwing money away. Federal and state solar tax credits can significantly lower the cost of solar for homeowners. In September of 2022, President Biden enacted the Inflation Reduction Act, which included the Residential Clean Energy Credit. This is a 30% federal solar tax credit that can be applied to systems purchased between 2022 and 2032. The credit will reduce to 26% in 2033, 22% in 2024, and expire in 2035. This credit is applicable to both residential and commercial solar projects. In addition, many states provide solar incentives, such as net metering, property tax exemptions, sales tax exemptions, solar renewable energy certificates, and state tax credits.

Millennials are more likely to own solar panels than older generations

Among the survey participants, Millennial homeowners are nearly six times more likely to own solar panels (29%) than Baby Boomers (5%) and nearly three times as likely to own them as Gen X homeowners (10%). 95% of Baby Boomers and 90% of Gen X currently do not own solar panels compared to 71% of Millennials. According to the survey findings, there were no major differences between income levels when it comes to owning solar panels. 

The generational difference in owning solar panels reflects the overall trend of younger Americans recognizing the threat of climate change to their future. The 2021 research from Pew Research showed that Millennials were open to more ambitious climate policies and were more involved in climate activism than older generations. In terms of the adoption of solar panels, Millennials seem to put their money where their mouth is.

Millennials anticipate paying off solar loans sooner than Boomers and Gen X

According to the survey, half of Millennial homeowners (50%) are more likely to anticipate paying off a solar loan of $20,000 within 3-5 years compared to Gen Xers (33%) and Baby Boomers (31%). Roughly 29% of Boomers responded that they were likely to pay off such a loan within 10-15 years. 17% of Millennials reported that it would take them 10-15 years to pay off the $20,000 solar loan.

The survey also found that participants’ educational and income levels correlated closely with their knowledge about the cost of solar and incentive programs. 11% of homeowners earning under $40K said they had a good understanding of solar incentives. By contrast, twice as many homeowners earning $80K+ (21%) felt they had a good grasp of incentive programs. Americans without a high school diploma/only high school diploma were less likely to know about solar incentives than those with higher education, with 10% saying they had a good understanding of solar incentives (vs. 20% or more of those with at least some college). 

Overall, the survey suggests that the knowledge gap among Americans regarding solar costs and incentive programs is one of the key factors to help us understand certain consumer perceptions about solar energy. As solar panels become more accessible to the average homeowner, bridging the knowledge gap about the benefits and affordability of solar could help more Americans embrace it.

Methodology

SaveOnEnergy.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 655 adults that own a home. Fieldwork was undertaken between March 15-16, 2022. The survey was carried out online and meets rigorous quality standards. The figures have been weighted and are representative of all U.S. adults that own a home (aged 18+).