The Pros and Cons of Solar Panels for Tiny Houses

Solar panels and tiny homes seem like a match made in tiny heaven. The top motives for living in a tiny house - cost savings and lower environmental impact - also happen to be the top reasons that homeowners, in general, choose to go solar. 

In fact, because solar panels allow tiny homes to operate off the grid, are easy to customize, generate cheap electricity, and offer a great return on investment, one could argue solar is uniquely well-suited to power tiny houses as compared to other energy sources. 

But, because tiny homes are small, there may be space limitations for solar installations. Plus, solar and battery installations can be pricey. You could consider investing in smaller-scale solar projects, like folding solar panel kits or flexible panels, to power your smaller devices.

Pros and cons of adding solar power to tiny houses 

Pros	Cons
Electric bill savings	High upfront cost
Great return on investment	Batteries are expensive
Clean renewable energy	Space requirements
Increased energy independence	Inverter placement can be tricky
Easy to customize

Advantages of solar for tiny houses

Solar panels will slash your electric bills 

The ability of solar panels to reduce electric bills is the #1 reason that American homeowners choose to go solar. Tiny houses already have lower utility bills, but by installing solar panels it’s possible to eliminate most, or even all, of your electricity charges. 

A small solar system between 1 kilowatt (kW) and 3 kilowatts in size - enough to cover the needs of pretty much any tiny home - will result in average savings of between $250 and $750 annually.

Your exact savings figure will depend on several factors - we’ve listed the most important ones below:

Factors that increase solar savings: 

• High energy usage

• High electricity rates

• High levels of sunlight

• Taking advantage of net metering

Factors that reduce solar savings: 

• Cheap grid electricity

• Poor access to sunlight

• Lack of incentives from your state and utility

To see how all of these factors will play out for your particular home, enter your address into our solar calculator here. 

Solar panels offer a great return on investment 

The overall payback period on solar panels is typically between 4-9 years in most states.

The best part is that with a tiny house, this can be achieved with a relatively small investment. A 3kW system, for instance, will cost you just $5,985 (based on a cost/watt of $2.85, and net of the 30% solar tax credit). 

Learn more: Calculating your solar return on investment

Furthermore, there are many solar financing options available to help with upfront costs, including loans, leases, and power purchase agreements. 

The exact cost you’ll have to pay depends on a few different factors, most important of which is your energy usage. If you consume a lot of electricity, you may need a slightly bigger system, while energy-efficient tiny homes might be fine with a smaller setup. 

Solar power offers clean, renewable energy 

Another priority for tiny homeowners is minimizing their impact on the environment, and solar panels are the easiest way to achieve this. 

Solar panels provide clean energy: they are completely emissions-free, meaning that they can substantially reduce your overall carbon footprint. The power they produce is also renewable - the sun shines anew every day, and no resources are consumed when we harness its rays. 

It’s also worth noting here that solar panels are the only practical option when it comes to using renewable energy in a tiny house. Solar panels are relatively cheap and usable pretty much anywhere, unlike other renewable options like wind power and hydroelectricity, which have high upfront costs and can only be installed in specific locations.  

While some critics point to the use of resources involved in the production of solar panels - the ‘footprint of carbon’ - research has shown this to be minuscule in comparison with emissions that solar panels help avoid. 

Solar panels will increase your energy independence 

Tiny home dwellers tend to be careful about their consumption patterns, and are eager to be as self-reliant as possible. When it comes to energy consumption, the easiest way to achieve a smaller footprint is by going solar.

Depending on the type of system you choose, solar power can be used to lower your consumption of dirty grid power, provide you backup power during grid outages, and in some cases cut your connection to the grid entirely. In the wake of incidents like the California wildfires and Texas winter blackout back in February 2021, backup power and decreasing reliance on the grid are more attractive than ever. 

Here’s a quick look at the different levels of energy self-reliance you can achieve with solar: 

1. Cover most of your daytime usage and export surplus power 

With a relatively small grid-tied solar panel system, it’s possible to generate enough electricity to both cover your entire daytime energy usage and have enough electricity left over to export to the grid (thanks to net metering, a program where your solar exports are worth the retail price of electricity, and is offered in most states). Grid-tied solar systems are both the most affordable type of system, and the most common. 

2. Cover most of your day and night usage, plus save some backup power 

The next step in energy independence is to add a solar battery to your system. This could be in the form of a lithium battery, lead-acid battery, or even a solar generator (such as those offered by Goal Zero). Whatever type you choose, your solar battery bank can either be used to cover part of your nighttime usage and/or store several hours of backup power to cover a grid outage. 

3. Complete independence from the grid 

It’s possible to go completely off-grid, i.e. you install a large system that can generate enough power to cover all your energy needs, eliminating the need to ever draw power from the utility. Just be aware that off-grid systems are substantially more expensive.

Solar systems can be customized to your needs 

Solar panel systems are completely modular; they can be designed to be as large - or as small - as you need. 

This is a major advantage as it addresses what’s probably the biggest challenge for tiny homeowners - finding objects (whether furniture or appliances) that match the limited dimensions of their living space. Many tiny homeowners are familiar with the disappointment when their preferred brands don’t offer what they need. 

This is not an issue with solar panels. They are modular by nature, which means that you can build a solar panel system with any popular residential solar panel brand by simply reducing the number of panels used compared to a typical home installation. By the same token, it’s possible to start with a small solar panel system and add to it later.  

Disadvantages of solar for tiny houses

Upfront cost 

You will need to spend several thousands of dollars if you’re planning on buying a solar panel system outright with cash. 

A small 1 kW solar system will cost around $3,250, while a larger 3 kW system will cost around $9,750 - these prices are before any incentives and rebates. 

The good news is that, as long as you are a taxpayer, you can benefit from the 30% federal solar tax credit. This credit would bring a 1 kW system down to $2,275 and the 3 kW system to $6,825. Depending on where you live, further incentives and rebates may apply.

Learn more: How to find and claim solar panel rebates 

The amounts above might be more than you can - or want - to pay. In that case, you can consider solar loans with small or even zero down payments, but you may need to have a decent credit score to qualify. Another option to consider is a DIY solar panel installation; this will be cheaper but comes with its own pros and cons. 

Solar batteries are expensive 

Earlier in the blog, we discussed how solar batteries, when paired with solar power systems, can offer increased energy independence, as well as backup power. 

However, while battery storage tech has improved in recent years - for instance, lithium batteries have replaced bulky lead acid AGM batteries - they remain an expensive addition. 

Newer lithium batteries, such as the 9.8 kWh LG Chem RESU10H battery, are powerful and space-efficient, but also costly. The RESU10H costs between $7,000 and $9,000 for the equipment plus installation. However, after the 30% solar tax credit, the RESU10H’s cost comes down to between $4,900 - $6,300. This cost can be further reduced by using some state-specific rebate programs, such as California’s Self-Generation Incentive Program (SGIP). 

However, our analysis finds that even after incentives and rebates, solar batteries don’t offer the same payback as solar panels, and are really only worth considering if you’re willing to pay a premium for solar backup power. 

Space requirements 

Tiny houses are, as the name suggests, small. This means that it can often be tricky to place all the solar panels you need on your roof. 

Let’s assume that you have a power consumption of 4,380-kilowatt hours (kWh) a year - this makes for an electric bill of $622 based on the average U.S. electricity cost of 14.2 cents/kWh, or $1,024 in a high-cost state like California. Covering that much electricity usage with solar panels would require roughly 140 square feet of space, assuming the use of eight 375-watt solar panels, each measuring 17.55 square feet. 

There are three ways that owners of tiny homes overcome space limitations when it comes to solar: the first option is to install the solar panels on the ground near the tiny house, although such setups are difficult to move. 

The second option is to make your home as energy efficient as possible; the less power you consume, the fewer solar panels you’ll need to install. The third option is using high-efficiency solar panels, which will generate more electricity in a smaller amount of space.

The easiest way to calculate how much space you will need for solar panels is by talking to a solar installer, or by using our easy-to-use online calculator which will factor in your energy usage and location.  

Inverter placement can be tricky 

Solar inverters are a critical part of any solar setup; they are the equipment that converts the DC power generated by your solar panels into usable AC power for your home. 

There are three types of inverters you could utilize for your tiny solar home, including:

• String inverter

• String inverter plus DC power optimizers

• Microinverters

Of these three inverter setups, the options that use string inverters tend to be the most cost-effective.

However, placing a string inverter in a small space can be tricky; you’ll have to keep in mind the following:

• Temperature control: Inverters operate best in lower temperatures - your inverter should be placed in a cool place, away from direct sunlight.

• Noise: They can generate a very low hum - if this is right next to where you work, it could be bothersome.

A common workaround is to place them in an outdoor box, facing north or east if possible, to minimize sun exposure. 

You can also avoid this issue altogether by opting for microinverters - these are small inverters that are attached to each panel. However, microinverter setups are more expensive, so they’re a less popular option among tiny homeowners.