You just got two solar quotes – one for $20,000 and another for $27,000. The cheaper one is definitely the better choice, right? Well, not so fast. Price Per Watt (PPW) tells a different story.
And that is – a lower total price doesn’t always mean a better deal, and a higher price isn’t always a ripoff. PPW helps you cut through the price tag, quickly compare what you’re actually paying for each unit of solar power, and gauge the true value of a system.
In this article, we’ll break down how PPW works, why it matters for homeowners, and how you can use it to make a smarter decision on your solar investment.
What is PPW in Solar?
PPW, or Price Per Watt, is a measure of how much you’re paying for every DC watt of solar power installed on your home. It’s also called Cost Per Watt (CPW) and is calculated using a simple formula: Total system cost ÷ Total system size in watts (DC) = PPW
That means a 10-kW system costing $30,000 amounts to a PPW of $3 per watt ($30,000/10,000 watts).
As you can see, “$3 per watt” looks far less intimidating than “$30,00 for a system”, making the cost seem more manageable in the eyes of homeowners considering solar.
So, it’s no surprise that you’ll often come across this term when talking to solar installers, especially since they use it as a selling point to soften the sticker shock.
But PPW is more than just a sales pitch. It’s a tool that helps you compare solar costs fairly.
Let’s illustrate that with an example. Let’s say you receive two different proposals:
- Installer A quotes a 6-kW (6,000-watt) system at $16,800
- Installer B quotes a 7-kW (7,000-watt) system at $22,400
At first glance, it’s hard to tell which system offers the better deal. The second system is bigger, but is the extra $5,600 for just 1 more kW really worth it? Let’s use PPW to simplify the comparison:
- $16,800 ÷ 6,000W = $2.80 per watt
- $22,400 ÷ 7,000W = $3.20 per watt
Now, you can clearly see that the first offer gives you a lower price per watt. And with that quick calculation, you’re able to avoid overpaying for a system.
PPW vs. Price Per kWh
PPW is not the same as price per kilowatt-hour (kWh), even though both metrics might sound similar.
PPW tells you how much you’re paying per installed watt of solar power. It’s mainly used to compare solar quotes and gauge the upfront cost of a system.
Price per kWh, on the other hand, measures how much you pay for electricity over time. This is the rate you see on your utility bill, typically expressed as cents per kilowatt-hour (e.g. $0.15/kWh)
In that sense, we can say that it’s a better metric for understanding your solar savings, showing how much energy your system produces compared to what you’d otherwise pay your utility company.
For curiosity’s sake, you could start with PPW to estimate solar savings. But too many variables come into play to get an accurate number – sunlight hours, system efficiency, and energy usage patterns are just a few.
The bottom line is this: Use PPW to compare installation costs, and use price per kWh to estimate long-term energy savings.
Factors That Influence PPW of a Solar Panel System
Earlier, we talked about how PPW makes comparing solar quotes easier by quickly looking at which system costs less per watt. But what happens when two systems have the same PPW? Does that mean you’re getting the same value for your money?
Not necessarily.
Remember, PPW already bundles everything into the price – the solar panels, inverters, mounting equipment, labor, permits, and installation costs.
That means one system might include higher-quality panels or a better inverter, while another might put more value into extended warranties or additional services.
So even when PPWs match, the systems themselves may not be “equal”.
And even when PPWs do vary, it’s worth looking at these key factors that naturally drive the price per watt up or down.
System Size
Out of all the factors affecting PPW, system size is the biggest difference-maker. In general, the larger the system, the lower the PPW tends to be. For example:
- A 5 kW system priced at $16,000 amounts to a PPW of $3.20 per watt
- A 10 kW system priced at $28,000 amounts to a PPW of $2.80 per watt.
From the given scenario, the PPW of the 10 kW system is 40 cents lower even though it’s twice as large as the first solar system.
Why is this the case? Mainly because costs don’t scale down proportionally as system size increases.
Put another way – every solar installation has base costs that stay the same, no matter the system size. Costs like permits, labor, and equipment fees simply get spread across more watts of solar capacity in a larger system, which brings the PPW down.
Equipment Quality
Like in any industry, reputable, high-end brands come at a premium, while budget-friendly options lower the overall cost per watt.
So if you’re comparing, for instance:
- System A (Premium Equipment) – PPW of $3.40 per watt
- System B (Lower-Cost Equipment) – PPW of $3.00 per watt
Choosing the less expensive option may save you 40 cents per watt upfront, but that could come at a cost. Lower-quality panels and inverters may produce less energy over time or need repairs and replacements sooner, which could eat into your long-term savings.
Roof Type
Your roof type plays a major role in determining PPW, mainly because of installation labor costs.
A simple, single-plane roof with a standard pitch is the easiest to work with. But if your roof has multiple angles, steep slopes, or obstructions, installation requires more time, specialized mounting equipment, and additional safety measures, all of which add to the final cost.
With that said, roofing material also factors in. Asphalt shingles and standing-seam metal roofs are generally the most installer-friendly, while tile and clay roofs require extra care to avoid damage during installation.
So if you’re comparing two quotes with the same PPW, but one involves a complex roof, it’s worth looking closer at whether labor costs are driving up the price per watt.
Additional Costs
Beyond materials and installation, PPW also includes a range of other costs that can vary depending on your location and specific project needs.
For example, permitting fees and labor rates differ by state and location. If you’re in an area with higher permitting costs or stricter regulations, you may see a higher PPW compared to someone in a state with fewer requirements.
Some projects may also require specific upgrades, with two of the most common being:
- Panel box upgrades to handle the added electrical load.
- Trenching for ground-mounted systems or longer conduit runs.
So here’s the takeaway: A slightly higher PPW can sometimes be the better choice, especially if it covers fewer hidden fees or includes necessary system upgrades that would otherwise add to your final cost.
Does PPW Apply to Leased Solar Panels or PPAs?
No, PPW does not apply to leased solar panels or Power Purchase Agreements (PPAs). PPW is a metric used for purchasing a solar system, but if you’re leasing panels or using a PPA, the pricing structure works differently.
With a solar lease, you’re simply paying a fixed monthly fee to use the electricity the system generates, with the cost based on the lease terms set by the solar provider.
With a PPA, instead of a flat fee, you pay for the actual electricity the system produces. In this case, cost is measured per kilowatt-hour (kWh), not per watt of installed capacity (remember PPW vs price per kWh earlier?)
Find the Best PPW Deals With the Quote for Solar Platform
The best PPW deals don’t just mean the lowest price per watt. A truly good PPW comes from reputable solar installers who design high-quality, well-sized systems tailored to your home’s energy needs.
Quote for Solar connects you with top-rated solar installers in your local area – professionals we’ve personally vetted for quality workmanship, reliable customer service, and competitive pricing.
Simply request a quote, and we’ll send you three customized offers from these trusted installers so you can compare options quickly without spending days searching for the right installer yourself.
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