Net metering operates as a billing mechanism that compensates owners of solar energy systems for the electricity they contribute to the power grid. When your solar panels generate surplus electricity surpassing your consumption, this excess power is fed back into the grid, resulting in a credit applied to your utility bill. The extent of this credit is contingent upon the policies of your particular utility company.

The Solar Investment Tax Credit (ITC) is a federal tax incentive enabling homeowners to subtract a portion of their solar expenses from their tax liability. Utilizing this tax credit during the filing process can result in decreased or potentially eliminated tax obligations for homeowners. Notably, the ITC value has recently been increased from 26% to 30%, adding to the allure of transitioning to solar energy.

Based on data from the Center for Sustainable Energy, the costs of residential solar panel systems can vary significantly. This calculation is based on a system capable of generating five kilowatt-hours of energy, with an average cost ranging from $3 to $5 per watt.

Several factors can influence whether your specific solar system falls on the higher or lower end of this scale, or even beyond. Firstly, the choice of solar panels can greatly impact the overall cost, considering variations in brand and power capacity. Additionally, it's crucial to recognize that solar incentives differ based on your location within the country.

Nationally, there's an opportunity to capitalize on the solar investment tax credit (ITC) if you act promptly. This incentive previously offered a 30% tax deduction for homeowners installing solar panels, but it reduced to 26% in 2020, further declining to 22% in 2021. Subsequently, the ITC is slated to expire.

Update: In August 2022, the solar tax credit was reinstated to 30% and extended through 2032.

On a state-by-state basis, diverse solar energy incentives exist. States like California provide generous rebates for homeowners adopting solar batteries, along with a net energy metering program and property/sales tax exemptions, aiding in cost reduction. Conversely, some states offer minimal or no solar incentives. For detailed information on incentives and rebates available in your state, refer to the Database of State Incentives for Renewables & Efficiency (DSIRE) website.

Determining the specific requirements for a solar power system involves considering various factors. In general, the average homeowner typically needs approximately 30 solar panels to fully power a house. It's crucial to recognize that the precise power needs vary based on your location and the type of solar panels chosen.

According to the U.S. Energy Information Administration, the typical American residential customer consumes just under 11,000 kilowatt-hours annually. While certain regions receive more daily hours of direct sunlight on average, a solar system comprising 30 250-watt panels is generally sufficient to power the average American home.

However, this estimate can significantly fluctuate depending on your home's size, daily sun exposure, insulation quality, appliance efficiency, and other factors.

The wattage of your panels is another variable to consider. Contemporary solar panels can produce up to 400 watts, or even more. For instance, if you reside in a sun-rich area like Arizona and opt for 400W solar panels, powering your entire home could be achieved with approximately 20 panels.