How Much Do Solar Panels Cost? (Expert Reviewed)

Dec. 06, 2023

Energy

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By Alexis Carthan Reviewed By Roger Horowitz

Homeowners with high electricity bills can potentially save tens of thousands of dollars by signing up with a top solar provider. Be prepared to invest between $17,430 and $23,870 for a system, with an average cost of $20,650.* Luckily, most homeowners can break even on their solar investment in six to 10 years, depending on their home’s size, electricity costs, and financing options. Below, we’ll review solar panel systems’ main cost factors and suggest ways to save on your investment.

*All cost data in this article via EnergySage, Consumer Affairs, and Aurora Solar.

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Key Takeaways

On average, solar panels cost roughly $2.95 per watt. Solar panel costs range from $17,430–$23,870, with average costs around $20,650.
According to Zillow, solar panels boost home sale prices by 4.1%.
In our survey of 1,000 homeowners, we learned 52% of respondents didn’t invest in solar due to the high cost.
Of the residents that did invest in solar, 94.6% found solar panels were worth the investment.

Average Cost of Solar Panels

System Cost Range Average Cost

Average cost

$20,650

Low end

$17,430

High end

$23,870

Solar Panel Cost by State

Solar panel savings vary from state to state, partly due to the area’s average electricity bill. For example, Hawaii has the highest electricity rates, while Louisiana has the lowest. Those in Hawaii stand to see bigger savings than those in Louisiana when going solar.

Cost of Solar Panels by State

Below, you’ll find the costs for a standard 6 kilowatt (KW) system in your state.

State Average Cost Per Watt Average Cost for 6-kW System Average Federal Tax Credit Value

Alabama

$2.45

$14,700

$4,410

Alaska

$2.41

$14,460

$4,338

Arizona

$2.44

$14,640

$4,392

Arkansas

$3.06

$18,360

$5,508

California

$2.86

$17,160

$5,148

Colorado

$3.44

$20,640

$6,192

Connecticut

$3.22

$19,320

$5,796

Delaware

$2.75

$16,500

$4,950

Florida

$2.58

$15,480

$4,644

Georgia

$3.20

$19,200

$5,760

Hawaii

$2.67

$16,020

$4,806

Idaho

$2.93

$17,580

$5,274

Illinois

$3.16

$18,960

$5,688

Indiana

$3.63

$21,780

$6,534

Iowa

$3.45

$20,700

$6,210

Kansas

$2.39

$14,340

$4,302

Kentucky

$2.34

$14,040

$4,212

Louisiana

$3.17

$19,020

$5,706

Maine

$3.45

$20,700

$6,210

Maryland

$3.13

$18,780

$5,634

Massachusetts

$3.54

$21,240

$6,372

Michigan

$3.78

$22,680

$6,858

Minnesota

$3.45

$20,700

$6,210

Mississippi

$2.64

$15,840

$4,752

Missouri

$2.85

$17,100

$5,130

Montana

$2.42

$14,520

$4,356

Nebraska

$2.83

$16,980

$5,094

Nevada

$2.60

$15,600

$4,680

New Hampshire

$3.61

$21,660

$6,498

New Jersey

$2.95

$17,700

$5,310

New Mexico

$3.39

$20,340

$6,102

New York

$3.48

$20,880

$6,264

North Carolina

$3.04

$18,240

$5,472

North Dakota

$2.42

$14,520

$4,356

Ohio

$2.98

$17,880

$5,364

Oklahoma

$2.62

$15,720

$4,716

Oregon

$3.02

$18,780

$5,634

Pennsylvania

$3.06

$18,360

$5,508

Rhode Island

$3.61

$21,660

$6,498

South Carolina

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$2.89

$17,340

$5,202

South Dakota

$2.39

$14,340

$4,302

Tennessee

$2.97

$17,820

$5,346

Texas

$2.77

$16,620

$4,986

Utah

$2.69

$16,140

$4,842

Vermont

$3.14

$18,840

$5,652

Virginia

$3.04

$18,240

$5,472

Washington

$3.25

$19,500

$5,850

West Virginia

$2.92

$17,520

$5,256

Wisconsin

$3.41

$20,460

$6,138

Wyoming

$2.57

$15,420

$4,626

Find a Solar Installation Company in Your State

What Factors Impact Solar Panel Costs?

Several key factors determine the total cost of solar panels—namely, your home’s electrical demand and panel choice. There are hardware costs, such as the materials included in your system, and soft costs, which are fees related to labor, permits, and other essentials needed to get the system installed. Learn about cost factors below.

High-Impact Solar Panel Cost Factors

Here are some cost factors that influence your solar panels’ price:

Household electrical demand:
This is the amount of electricity your household uses per month. Homes with mostly gas appliances will use less energy than homes with electric ones. If you have high monthly energy consumption, you’ll need a larger system to match your needs.
Purchasing options:
Customers can pay with one lump sum, take out a loan, lease, or enter a Power Purchase Agreement (PPA). Each option affects how much you’ll pay in the long run.
System size:
The most influential factor in your solar system installation cost is the system size. The bigger the system, the higher the price tag. However, buying a solar system is similar to buying other products in bulk. A higher-wattage system has a lower average cost per watt. Thus, when you purchase a larger system, the overall cost is higher but you have a lower cost per unit.

Medium-Impact Solar Panel Cost Factors

Below are some of the medium-impact cost factors:

Amount of sunlight:
The more daily sunlight your home receives, the more significant your potential savings. Homeowners that live in areas with year-round inclement weather or cloudy days will experience lower energy production and cost savings.
Labor:
Labor costs vary by location and are more expensive in areas with higher costs of living. Different solar providers also charge different prices. Labor will be included in your initial quote.
Panel quality:
The equipment you choose greatly impacts your electricity production. You’ll want to find the
most efficient solar panels
that fit your budget. More expensive equipment doesn’t always mean higher savings, while the
cheapest option
can sacrifice value. Find the right balance between quality and price.
Panel size:
A larger solar system costs more because it requires more labor and more equipment. However, it can yield greater savings.
Tax incentives:
Federal and state solar incentives can reduce installation costs.

Low-Impact Solar Cost Panel Factors

Here are some other cost factors that pose a minimal impact on solar’s overall price:

Location:
Solar panels cost more in some states than others, largely due to regional electricity costs. Peak sunlight hours are also a factor.
Permitting and interconnection:
Required permits and local interconnection fees to the power grid will add a slight extra cost to your solar panel installation total.

Cost by Type of Solar Panel

The type of solar panel plays an important role in the total system cost. For example, monocrystalline panels are more efficient but more expensive than polycrystalline panels. More efficient panels are typically needed for homes with limited roof space.

The best residential solar panels include:

Monocrystalline solar panels:
Monocrystalline panels offer the best efficiency ratings and energy production but have the highest price tag. Wholesale pricing for monocrystalline panels ranges between $1.00–$1.50 per watt before installation costs.
Polycrystalline solar panels:
Polycrystalline panels offer lower pricing but less energy production than monocrystalline panels. Expect to pay $0.75–$1.00 per watt at wholesale.
Thin-film panels:
Thin-film panels have the lowest pricing and efficiency, making them a good option for small solar projects, such as recreational vehicles (RV) or sheds. You’ll pay around $0.43–$0.70 per watt at wholesale pricing.

Cost by Type of Solar System

The solar energy system type also impacts price. There are three system options: grid-tied, grid-tied plus storage, and off-grid.

Grid-tied system:
A grid-tied system, also known as on-grid or utility-interactive, is the most cost-effective since it doesn’t require a battery, eliminating a large expense and lowering installation costs.
Grid-tied system plus storage:
A hybrid system means your panels are tied to the utility grid along with solar battery backup(s). This costs more than grid-only. Your initial system price will include one or more solar batteries. For example, Tesla Powerwall prices start at $9,200 for a standalone battery but jump to $14,200 when included with a
Tesla Solar panel system
.
Off-grid system:
An off-grid system is the most expensive because you’ll have to source all of your electricity independently. This requires high-capacity battery storage and a backup generator. Based on our research,
off-grid system costs
range between $45,000 and $65,000.

Solar Panel Payment Options

Solar panel installation requires a significant financial commitment, so companies offer different payment options to suit different budgets. Here’s an overview of the typical solar financing options offered by solar providers:

Full payment:
You pay for the solar system outright without a loan or payment plan. This option will save you the most money because you won’t pay interest rates. Full payment also grants you system ownership, qualifying you for incentives.
Power purchasing agreement (PPA):
With a PPA, you only pay for the energy you use. Like an electric bill, the rate fluctuates each month. Your solar company retains system ownership, disqualifying you from incentives.
Solar loan:
A loan allows you to make small payments over a longer payback period. However, you’ll pay more in the long run due to interest rates. Solar loans also qualify you for solar incentives.
Solar lease:
This option allows you to make fixed monthly payments for about 20 years and requires little to no up-front cost. Your solar installation company retains system ownership and is responsible for its upkeep. Leasing customers don’t qualify for solar incentives.

We recommend full payment if you have the up-front capital to afford it. This is the most cost-effective option and yields the quickest return on investment (ROI).

A solar loan is an excellent second option if you don’t have the financial ability to pay for the solar system up-front. A solar loan still lets you experience maximum energy bill savings and solar incentive eligibility.

Solar Incentives and Rebates

We surveyed 1,000 homeowners that received solar quotes. We found 52% of respondents did not install solar panels because it was too expensive. An excellent way to reduce your overall system cost is by applying for federal, state, and local incentives. These tax credits, rebates, and solar renewable energy credits (SRECs) vary by state and payout rate.

Here is an overview of common solar incentives:

Federal solar tax credit:
The
federal tax credit
lets you apply 30% of your total solar installation cost to your federal taxes. There’s no cap on its value, meaning for a 6-kW system priced at the national average of $20,650, you’d subtract $5,370 from your taxes. This reduces your system cost to $12,530.
Net-metering:
You could earn additional savings from
net-metering
, an incentive where you send excess energy back to the power grid for monthly electric bill credits. Net-metering programs are offered on the state level or through certain utility companies throughout the state.
Property tax exemptions:
Since solar panels boost home value, they also increase your property taxes. These exemptions eliminate property taxes for a certain timeframe, or permanently, depending on your state’s legislation.
Sales tax exemptions:
Some states exempt state or local sales tax from solar panel sales, helping reduce your solar investment.
Solar renewable energy credits (SRECs):
Some states offer SRECS to help meet their renewable portfolio standards (RPS). These regulations require a certain percentage of generated electricity to come from renewable sources. Homeowners receive one credit for every 1,000 kWh of solar electricity their system generates. You can apply this credit to reduce your electricity bill or sell them for profit.
State tax credits:
Similar to the federal tax credit, homeowners receive a certain percentage of their total costs back to apply to their state tax liability.

Some cities, municipalities, and local utility companies offer additional savings for a new solar system, energy storage, or energy efficiency upgrades.

Check our state solar incentives guides below for more information about credits and rebates in your area:

Are Solar Panels Worth It?

Our survey revealed that 94.6% of homeowners said installing solar panels was worth it, and most respondents said the transition reduced their energy bills. Although solar panels are worth the investment for many homeowners, there are situations when they won’t benefit your home.

Solar is a balancing act between a hefty up-front cost and potential savings. One advantage of solar panels is that they pay for themselves over time. The average payback period for a solar PV system is six to 10 years. If you have access to SRECs and net-metering, you not only break even during this timeframe but also generate additional savings.

Below are ways that going solar can be worth it for you:

Homes with plenty of sun exposure:
An ideal house that maximizes the potential of solar energy should be obstruction-free, so no tall trees or surrounding buildings. In addition, the roof should be south-facing and have a steep slope that can hold a solar panel at a
15- to 40-degree angle
. Homes that receive little light or have limited roof space will not benefit from a system, making it a less valuable investment for those homeowners.
Increased home value: Going solar increases your home’s value. According to a Zillow study, homes with solar energy systems sell for 4.1% more on average than those without, equaling an additional $9,274 on the total resale price for median-value homes.
Lower utility bills:
Using solar power in your home reduces the need for costly fossil fuels and taps into a less expensive resource. Homes that use more electric-powered appliances would benefit from a solar conversion.
Net-metering:
Excess energy from your solar panel installation can be stored in a solar battery or returned to the power grid. You can accumulate enough credits through net-metering programs and SRECs to receive a monetary return.
Unlimited sustainable energy:
Solar energy provides a renewable energy solution that helps protect the environment. Harnessing solar energy’s power provides homeowners unlimited access to clean energy. Without relying on expensive fossil fuels, homeowners can take full advantage of a natural energy source with lower energy costs. As a result, customers will reduce their carbon footprint, helping to reduce harmful emissions that contribute to climate change.
Solar tax breaks:
As previously stated, there are plenty of solar incentives provided by local and state governments. We encourage you to ask your chosen solar installers to see what tax breaks they can help you obtain.

How Long Does It Take To Break Even With Solar?

On average, homeowners break even after six to 10 years. Determining your solar break-even point depends on a few numbers, namely the total system plus installation cost, any applied incentives, and your annual electricity bill savings.

Use the following steps to calculate your break-even point:

Subtract the value of any applied incentives or rebates from your total solar panel system plus installation cost. That’s your first number.
Then, add up how much you save annually in electricity costs by comparing pre-solar utility bills with post-solar utility bills. That’s your second number.
Divide the first number by the second number for the number of years it will take you to break even. Every year after that should be counted as a financial gain.

Let’s demonstrate this calculation: If your system and installation cost amount to $20,000, but 30% was deducted due to incentives, your first number is $14,000. Pretend your annual electricity savings comes out to $2,500. Divide $14,000 by $2,500, and you’ll see that it takes just over five and a half years for you to break even.

What Are the Hidden Costs and Disadvantages of Solar?

As with any other home improvement project, there are some hidden costs and downsides to solar energy that are not often discussed.

Solar’s highest hidden cost is including solar batteries with your system, which often runs from $8,500–$10,000. The cost of a Tesla Powerwall battery is slightly higher given how reputable the company and product are. Though you can opt out of installing a solar battery, some homeowners choose to include it for backup power protection.

Read over some of these hidden fees and disadvantages here:

Insurance:
You can expect your home insurance to increase with a solar panel system purchase. Your state might require you to get solar panel-specific insurance in addition to your current insurance coverage. Therefore, we advise you to search for a reputable
home insurance provider
that helps with solar power system coverage before purchasing panels.
Maintenance:
Be aware that your solar panels will require maintenance to keep them in working order. Most installers recommend having panels checked every five years or so. You’ll need a professional to inspect wires and connections to ensure they’re in working condition. Although this won’t be a substantial cost, you should plan for maintenance fees in your ongoing panel costs.
Panel cleaning:
Most solar panels are cleaned naturally with rainfall. However, if you live in an area prone to wildfires or dust, you will need the occasional cleaning. We recommend hiring a pro to avoid potentially dangerous situations such as climbing on your roof.
Repairs:
Solar panels are durable and many have hail and hurricane ratings to provide their durability. Most insurance covers damage due to natural disasters or damaging weather events. There are rare occasions when solar panels require repair work. If they aren’t covered by insurance, you must pay those out-of-pocket costs.
Roof work
: Solar panel installation sometimes requires extra roof work to be completed before the project can even start. Depending on your roof’s condition, this can be the highest or second-highest hidden cost. If your roof is roughly five to 10 years away from needing replacement, you may need to install an entirely new roof. Alternatively, a solar installer might suggest simply fortifying your roof’s eaves. Either way, we advise you to contact a local roofing company for an in-depth
roof replacement
inspection.
Utility company charges
: You’ll still receive a utility bill after going solar. Though that bill should be around $80 less than before, you’ll likely see some solar-specific charges from utility companies. Namely, you’ll notice a charge when your solar panels take electricity from the power grid instead of adding to it.
Solar battery:
Many homeowners opt to purchase a
solar battery
with their systems. This device stores excess energy and lets you use this energy to power your home at night, during blackouts, or when utility rates are high.
System monitoring:
If you opt to use a solar company’s active monitoring, there’s sometimes a monthly $10–$15 fee included.
Tree removal: If surrounding trees cast shadows on your panels, you may need tree removal services to ensure their performance. These services cost between $341–$1,523 on average.

Solar Panel Installation Process

Solar installation is a straightforward process. Your solar company will handle most solar panel installation steps.

Consultation:
A representative from your chosen solar company will meet with you to discuss your home’s energy usage and how suitable your property is for a solar installation.
Design:
Your installer will design a system tailored to your home’s specifications and handle the required permits from your local municipality. This process can take anywhere between one and six months.
Scheduling:
You’ll schedule an installation date once the design and contracts are finalized.
Installation:
Installation typically takes just one or two days.
Inspection:
Your solar company will manage final inspections. This process can take up to 60 days, as the company must schedule a town government representative to inspect the system and approve its activation. During this inspection, the representative will double-check your installer’s work and ensure the installation meets standard electrical and roof setback codes.
System use:
Once the representative gives approval, you can start generating free, renewable energy.

Matt Johnson, co-owner of Namaste Solar, says that a reputable installer should supply an itemized cost list for each aspect of the installation, such as labor, permit fees, sales taxes, utility fees, and the interconnection fee. The installer should also include available tax incentives.

Watch our video below to get a better understanding of what the solar installation process entails.

Our Conclusion

Although solar panels require a significant investment, they provide future financial and environmental benefits. Many factors, such as the panel type, your climate, and your energy needs, influence your final costs and whether a solar investment is worth it. Apply for any federal and state incentives to help lower your system costs and leverage your potential long-term savings.

We recommend getting quotes from at least three solar companies for the best rates. Compare the equipment quality, costs, financing options, and warranties.

Use our tool below to begin searching for your area’s solar providers.

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Frequently Asked Questions About Solar Panel Cost

How long does solar panel installation take?

Solar panel installation takes an average of two months to complete. While the panel installation itself only takes a day or two, additional steps such as permitting and final inspection can take several weeks to finish.

Do solar panels work at night?

No, solar panels do not generate power in the dark. However, you can buy a solar battery that stores excess energy generated during the day to use at night.

What is net-metering?

Net-metering is a billing system that compensates residential solar customers for excess energy. This energy is sold back to the grid in exchange for future utility bill credits or an annual payout, depending on the program. Net-metering policies are offered at the state level or through utility companies.

Can a house run on solar power alone?

Yes, a house can run on solar power alone with an excellent solar system and power storage options. However, you will need to invest in a high-quality system and panels, which requires a significant financial investment.

Do solar panels increase the value of your home?

Many homeowners see their home value go up after installing a solar system. Zillow reported sustainability as one of the top seven trends homebuyers were after in 2022, stating that house listings with descriptions such as “eco” and “energy-efficient” sold more than two days faster than expected. Another Zillow report concluded that homes with solar systems sold for an average of 4.1% more than those without.

Our Rating Methodology

The This Old House Reviews Team is committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:

Solar equipment, installation, and services (25%)
Warranty and performance guarantees (25%)
Brand reputation and certifications (15%)
Financing options (15%)
Experience (10%)
Availability (10%)

Total scores are divided by 20 for a final 5-point rating scale.

Why Trust Our Team Our goal is to provide reliable information to inform your decision when choosing a solar provider. The This Old House Reviews Team has spent more than 770 hours analyzing online customer feedback and researching solar companies. We routinely fact-check our solar pages to ensure our articles stay current and accurate. Homeownerssurveyed 2,000 Solar panel and solar battery specifications compared 50 + Customerreviews read 10,000 + Solar technology companies considered 68

To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.

It costs an average of $20,000 to install a typical solar panel system in the U.S. This works out to about $3.00 per watt of solar installed. If the solar panels are paid for using a solar loan, the price may be over $4.00 per watt.

The upfront cost of solar can be surprising at first, but the electricity bill savings are substantial! Solar panels in most states pay for themselves in 12 years, sometimes less. Then, you get free electricity for over a decade!

The total price of installing solar panels in 2023 will vary with your location, your energy usage, available solar incentives, the brands of equipment used, and the solar company you choose.

Find out how much a solar system would cost for your specific home

Calculate Now

Why you can trust SolarReviews:

SolarReviews is the leading American website for consumer reviews and ratings of residential solar panels and solar panel installation companies. Our industry experts have over two decades of solar experience combined and maintain editorial independence for their reviews. No company can pay to alter the reviews or review scores shown on our site. Learn more about SolarReviews and how we make money.

Table 1: Average solar panel cost based on system size in 2023 System size Number of solar panels* Average cost per watt Average total cost (after tax credit) 4 kW 11 $3.25 $9,100 6 kW 16 $2.95 $12,390 8 kW 22 $2.85 $15,960 10 kW 27 $2.75 $19,180 12 kW 32 $2.75 $23,100 14 kW 39 $2.60 $26,936 16 kW 43 $2.60 $29,860

*Based on 370-watt panels

What is the cost of a solar panel installation for an average 2,000 square foot home today?

The average cost of a residential solar panel installation in 2023 ranges between $18,000 and $20,000, before applying tax credits or other incentives that may be available where you live. This works out to between $2.75 and $3.35 per watt of solar installed, depending on your location and the brands of solar equipment used.

Once you take the federal solar tax credit into account, the overall cost drops to an average of between $12,600 and $14,000. Our solar panel cost and savings calculator will show you local incentives you may be eligible for to help lower the upfront costs.

Why are solar panels expensive?

You may have been taken aback when you first saw the price of solar panels. This shock is compounded when you hear that residential systems are much cheaper in some other countries.

But solar panels are a lot more affordable now than they were even just a few years back, and in many states, they now offer an excellent return on investment. According to the National Renewable Energy Laboratory, the cost to install solar panels on a home has fallen over 60% since 2010.

There are several components in residential solar installations that affect the final price.

The cost can be grouped into two categories, hardware costs and “soft costs”. According to our data:

Hardware accounts for 46% of average solar panel costs. This covers solar panels, solar inverter(s), and balance of system (racking and mounting, wiring, etc.)
Soft costs account for 54% of average solar panel costs. This includes installation and labor, sales and marketing expenses, permitting and inspection fees, and installer margins.

Factors that affect solar panel installation costs

1. Solar system size

The size of a solar panel system will play a major role in how much the installation will cost. Solar system size is measured in kilowatts (kW), which tells you the maximum amount of power the solar panels will deliver under perfect conditions. Kilowatt-hours (kWh), on the other hand, represent how much electricity your panels produce and how much your home uses.

The size of the solar energy system you need will depend on how many kWh of electricity your home uses and how much you want to reduce your electric bill by. The higher your energy usage, the bigger the system you need to cover your electric bill, which means your solar installation will be more expensive.

But, the cost-per-watt of larger systems is often lower because the equipment can be purchased at a bulk price, and other overhead costs will be spread out over a larger system.

2. Your location

The location of your home affects solar pricing in a few ways:

How sunny your area is: The less sunlight your home gets, the more panels you need to cover your energy needs, and the higher the price you’ll have to pay
State and local incentives: The 30% federal solar tax credit, sometimes called the Investment Tax Credit (ITC), greatly reduces solar installation prices, but there are also a variety of state and local solar rebates and tax incentives that can help lower costs. You can read more about what incentives you qualify for in our State Solar Incentive Guide
Market conditions: Local competition between installers, job volumes, cost of business overhead, labor costs, and different state and local policies can dictate solar panel costs.

The following table outlines the average prices you can expect to see in different states based on these factors:

Table 2: Average cost of 6 kW solar system by state

3. Equipment type and manufacturer

Like most things, the brand dictates the price with solar. Panels from certain solar manufacturers are more expensive than others, and that doesn’t always mean they’re that much better in terms of performance.

For instance, Jinko Solar’s panels are much cheaper than premium brands like SunPower but have almost the same specifications and great customer reviews.

The following table outlines the cost of some of the most popular residential solar panel brands on the market:

Table 3. Average system cost based on solar panel manufacturer Panel manufacturer Average cost per watt Average system cost (after tax credit) Qcells $2.49 $10,485 Panasonic $2.87 $12,054 SunPower $2.85 $11,970 Canadian Solar $2.87 $12,054 LONGi Solar $2.85 $11,970

The solar panel brand isn’t the only thing that influences the price. The other equipment used in a residential solar s

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