How Much Do Solar Panels Cost? (2024 Guide)

Q: Average Payback Period by State

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Q: Are solar panels worth it?

In most cases, solar panels are worth it for your home . Many homeowners save thousands of dollars in energy bills over the lifespan of their solar panels, plus you are generating clean energy to power your home.

Solar panels cost between $15,000 and $22,500 on average. Get custom quotes from the top installers in your area using the form below.

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Updated: Jun 28, 2024

Written by Faith Wakefield

Written by Faith Wakefield Writer

Faith is a writer whose work has been featured in EcoWatch and Today’s Homeowner. She holds economics and English degrees from the University of North Carolina at Chapel Hill and likes to collect books and spend time in nature in her free time.

Solar Writer

Edited by Tori Addison

Edited by Tori Addison Editor

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Solar Editor

Reviewed by Karsten Neumeister

Reviewed by Karsten Neumeister Reviewer

Karsten Neumeister is an experienced energy professional with subject-matter expertise in energy policy and the solar and retail energy industries. In addition to previous roles with the Retail Energy Advancement League and Solar Alternatives, he has written for EcoWatch and National Public Radio (NPR).

Retail Energy Advancement League

Based on our survey of 1,000 homeowners with installed solar systems, solar panels cost between $15,000 and $22,500 before incentives for an average 2,000 square foot home. The actual price you pay will depend on a number of factors including the system size you need, the installation company and equipment you choose and the financing option you select.

The Average Cost of a Solar System

For the average home installing a 6 to 8kW system, solar panels will cost between $15,000 and $22,500 before applying incentives.

“Residential solar energy is gaining in popularity because of a few important factors — first, the cost has decreased dramatically over the past 15 years,” said Matthew Aldeman, PhD, the associate dean of the College of Engineering at Illinois State University.

By using the 30% federal solar tax credit, you can expect to pay between $10,500 and $15,750. Most homeowners will recover the cost of their solar panels in electric bill savings in 8.5 years, resulting in savings of $25,260 over the lifetime of their system.

Homeowners in New Mexico have the cheapest solar panel costs, with an average price of $9,996 after using the federal solar tax credit. Solar panel pricing is the most expensive in Massachusetts, where estimated costs are around $18,900 after the tax credit.

What Impacts Solar Panel Cost?

There are many factors that impact the overall cost of your solar system. Learn which factors you can control to help lower the cost of your system and maximize your lifetime system savings.

Your Location

Two significant location-based factors will determine your total cost and savings of going solar: the cost of energy where you live and how much sunlight you receive.

In states where traditional energy is more expensive, like California, Hawaii and New York, you stand to save more on energy bills when you switch to solar. However, if you live in a super sunny state like Arizona or New Mexico, you’ll have more daily peak sunlight hours, requiring fewer panels to meet your energy needs.

That’s not to say solar isn’t worth it if you don’t live in a state with high energy costs and abundant sunlight. See how energy costs compare in your state using the map below, and learn more about how you can determine how many solar panels you need.

Home Energy Needs

The typical U.S. household uses 10,632 kilowatt-hours (kWh) of electricity each year or around 886 kWh monthly. However, several factors can affect your energy needs, including the size of your home, how many people are in your household and if you have an electric vehicle (EV).

The higher your household’s energy consumption, the larger the solar panel system necessary to offset your usage. For example, based on our average cost of a solar panel at $3 per watt with installation, a 6 kW system would run you around $18,000, while a 12 kW system would double the cost.

Solar System Size

The cost of your solar system is directly proportional to its size. The more solar panels you install, the more expensive your system will be.

The ideal system size for your home depends on personal factors like your roof size and angle, energy usage and location. Ultimately, solar system size depends on your household’s energy consumption and how much energy you want to generate with your panels.

System Size	Estimated Annual Energy Production	Average System Cost (Before Incentives)
4 kilowatts (kW)	5,600 kilowatt-hours (kWh)	$11,400
6 kW	8,400 kWh	$17,100
8 kW	11,200 kWh	$22,800
10 kW	14,000 kWh	$28,500
12 kW	16,800 kWh	$34,200

Purchasing Options

The most cost-effective option when purchasing solar panels is paying in cash upfront. With a cash purchase, you will own your system and not pay interest on a loan.

However, because solar systems are expensive, paying in cash is not an option for most homeowners. The next best option is to put some money down and finance your panels. Although you will pay interest over the loan period, you will still own your panels and benefit from energy savings. The more money you put down, the less interest you will pay over time.

Solar Panel Type

The cost of your panels and equipment is by far the largest expense you’ll pay during your solar installation. There are many solar panel options available, and the manufacturer, installer and type of panels you choose will affect the final cost of your system. There are three common types of solar panels: thin-film, monocrystalline and polycrystalline.

We recommend installing monocrystalline panels due to their high durability and efficiency. The overall system cost ends up being comparable to the cost of using the other types of panels available because you will need fewer monocrystalline panels to produce the same power output.

Panel Type	Efficiency	Average Cost per Watt Before Installation*
Monocrystalline	High (17%–20%)	$0.75–$1.50
Polycrystalline	Moderate (14%–17%)	$0.40–$0.80
Thin film	Low (7%–12%)	$0.30–$0.60

*Average cost calculations are based on wholesale pricing from Solar Electric Supply, Inc. and A1 Solar Store.

Solar Installation Company

Another factor that can greatly affect the ultimate cost of your solar system is the installation company that you choose. Use the chart below to help you find a provider with an installation cost within your budget and request a free quote.

Company	Star Rating	Cost of an 8 kW System*	BBB Rating	Visit Site
Our Top Pick SunPower GET QUOTE	4.8	$24,000–$36,000	A+	GET QUOTE
Palmetto Solar GET QUOTE	4.7	$20,000–$25,000	A+	GET QUOTE
Sunrun Solar GET QUOTE	4.3	$20,000–$25,000	A-	GET QUOTE
Momentum Solar GET QUOTE	4.2	$20,000–$25,000	A+	GET QUOTE
Freedom Solar GET QUOTE	4.2	$25,000–$30,000	A+	GET QUOTE
ADT Solar GET QUOTE	4.0	$20,000–$25,000	A+	GET QUOTE
Blue Raven Solar GET QUOTE	4.4	$20,000–$22,500	A	GET QUOTE
Solar Energy World GET QUOTE	4.2	$25,000–$27,500	A+	GET QUOTE
Elevation GET QUOTE	4.7	$25,000–$27,500	A+	GET QUOTE
Trinity GET QUOTE	4.0	$20,000–$25,000	A+	GET QUOTE

Company	BBB Rating	Star Rating	Cost of an 8 kW System*	Visit Site
Our Top Pick SunPower GET QUOTE	A+	4.8	$24,000–$36,000	GET QUOTE
Palmetto Solar GET QUOTE	A+	4.7	$20,000–$25,000	GET QUOTE
Sunrun Solar GET QUOTE	A-	4.3	$20,000–$25,000	GET QUOTE
Momentum Solar GET QUOTE	A+	4.2	$20,000–$25,000	GET QUOTE
Freedom Solar GET QUOTE	A+	4.2	$25,000–$30,000	GET QUOTE
ADT Solar GET QUOTE	A+	4.0	$20,000–$25,000	GET QUOTE
Blue Raven Solar GET QUOTE	A	4.4	$20,000–$22,500	GET QUOTE
Solar Energy World GET QUOTE	A+	4.2	$25,000–$27,500	GET QUOTE
Elevation GET QUOTE	A+	4.7	$25,000–$27,500	GET QUOTE
Trinity GET QUOTE	A+	4.0	$20,000–$25,000	GET QUOTE

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Solar Panel Installation Cost Breakdown

Although the exact cost of your solar panel installation will vary depending on the company and type of panels you choose, you can expect your equipment (panels, inverters, batteries, racking or mounting hardware, etc.) to make up nearly half of your total cost.

Labor costs, administration fees, taxes, building permits and electrical permits comprise the rest of your expenses. Jesse Solomon, the co-founder of NCSolarNow, explained the cost breakdown of a typical solar panel installation as follows:

Here is a sample cost breakdown using the national average cost of a 6kW system of $17,100:

Solar Installation Cost Factor	Estimated Cost
PV Materials: Panels, Inverters and Hardware	$8,066.07
Electrical Labor	$2,252.07
Administration, Grid Connection Request and Design	$2,081.07
Installation and Labor	$2,081.07
Taxes, Fees, and Permits	$1,397.07
Electrical Materials	$1,222.65

How To Save Money on Solar Panels

Although the upfront cost of solar panels can be intimidating, there are several steps you can take to help reduce the total cost as well as maximize the amount of money that solar panels save you in the long run.

MARKETWATCH GUIDES TIP

In general, we recommend leveraging federal, state and local incentives as well as purchasing more efficient solar panels to save money.

Use the Federal Solar Tax Credit

The Solar Investment Tax Credit (ITC) is a tax incentive worth 30% of the total cost of your solar panel system. All U.S. homeowners who install solar panels are eligible for this credit, and it reduces what you owe in federal income taxes. For most solar systems, this credit is worth several thousand dollars, which is a significant savings.

This tax credit and others like it have made going solar more affordable. Sergio Castellanos, PhD, an assistant professor in civil, architectural and environmental engineering at the University of Texas at Austin, explained that “the economics of high retail electricity prices, coupled with existing Inflation Reduction Act incentives, [can] make installing solar PV quite attractive."

However, if you choose to lease your panels, you will not be eligible for this tax credit. You can only claim this tax credit if you own your panels.

The credit was renewed by the Inflation Reduction Act of 2023 and is currently set to decrease to 26% in 2033 and 22% in 2034 before expiring in 2035.

Look Into State Solar Incentives

In addition to federal incentives, many states offer other incentives to go solar, including tax breaks, credits and rebates. If you’re interested in the solar incentives available in your state, you can browse the Database of State Incentives for Renewables & Efficiency (DSIRE) or visit your local government website to learn more.

Additionally, net metering is a program that allows you to sell the excess electricity your solar panels generate to your utility company for billing credits. Forty-one states and Washington D.C. have a state-mandated net metering policy, though some policies are better than others. States without a mandated net metering policy, like Texas and Idaho, may have utility companies that offer the program.

Many states also offer solar rebate programs for low- and moderate-income households or community solar programs that aim to make clean energy more accessible.

Purchase Efficient Panels

Efficient solar panels maximize your system’s energy production while requiring fewer solar panels and less roof space. You will save more money in the long run by maximizing your output and will often be required to purchase fewer panels up-front. SunPower currently offers some of the most efficient solar panels on the market, at 22.8% efficiency.

How Long Does It Take to Break Even With Solar?

According to our research, the average payback period for a solar panel system in the U.S. is 8.5 years, compared to the typical lifespan of a solar panel system of at least 25 years. With the average yearly electric savings being $1,531, according to data sourced from the Energy Information Administration (EIA), you can expect to save around $25,260 in electric bills over the lifetime of your solar panels.

ASK THE EXPERTS: Are solar panels becoming more affordable?

"Yes. Because costs have come...

down, the value of residential solar has significantly improved for households, especially in areas with high electricity prices."

Michael Craig

Assistant Professor in Energy Systems at the University of Michigan

"The decline in the cost of...

installing solar panels has been one of the great successes in the energy sector over the last decade or so. The all-in cost for installing a residential solar system is less than half of what it was in 2010.

It now takes around six to 10 years to recover an investment in a solar system, a payback period that is likely to shorten even more as time goes on."

Joe Kantenbacher

Assistant Professor of Sustainability at the University of South Dakota

"Solar panels today are half...

as expensive as they were 10 years ago, and most experts suggest the price will continue to drop over the next decade."

Alfredo Fernandez-Gonzalez

Professor at the University of Nevada Las Vegas School of Architecture

How Much Can I Save With Solar?

On average, homeowners who install a complete solar system can expect to save $1,530 per year on electricity bills. To estimate these savings, we used average annual electricity rates from the U.S. Energy Information Administration (EIA), the specific photovoltaic power output (PVOUT) from the Global Solar Atlas and the average cost of installing a 6kW after using the federal solar tax credit of around $12,000.

The sun is a renewable resource that shines during the day when energy use and electricity prices tend to be highest,” said Joe Kantenbacher, PhD, an assistant professor of sustainability at the University of South Dakota. “Solar panels can reduce dependence on the utility grid and over their lifetime, provide a net reduction in energy bills.

Solar Panel Savings by State

Homeowners in California have the highest estimated yearly savings of around $2,840 while Washingtonians are expected to have the lowest opportunity at $865 per year. Use the map below to find out how much you can expect to save in your home state.

Average Payback Period by State

Frequently Asked Questions About Solar Panel Costs

Yes, solar can increase the value of your house by improving your home’s energy savings and boosting appeal if you want to sell. Reports by Zillow and the U.S. Department of Energy’s Berkeley Lab concluded that the majority of home buyers are willing to pay more for a home with solar.

Although the amount of energy a household uses will influence how many solar panels it needs, it will likely cost between $15,000-$22,500 to install solar panels on a 2,000-square-foot home.

Monocrystalline solar panels, which are most common for residential solar installations, typically last between 25 and 40 years, with most solar companies offering a 25-year panel warranty.

In most cases, solar panels are worth it for your home. Many homeowners save thousands of dollars in energy bills over the lifespan of their solar panels, plus you are generating clean energy to power your home.

A 6 kW solar system can save homeowners an average of $1,346 each year on energy bills, or around $112 monthly. Exact savings will vary depending on your system, location and local electricity rates.

How We Gathered Our Cost Data

We conducted in-depth research and analyzed several factors to determine our solar cost data, which is based on the following resources:

Conducting surveys: We have conducted two surveys to gather solar cost data for homeowners across the country. Both launched in 2023, each survey polled 1,000 homeowners who have installed residential solar systems. We compared the results of each survey to determine average pricing based on solar system size, location and installer.
Researching reliable sources: We gathered information from reliable solar sources like the Solar Energy Industries Administration (SEIA), the National Renewable Energy Laboratory (NREL) and the Energy Information Administration (EIA) to assess the national average cost of solar panels. We also used these sources to determine the cost of electricity and solar power systems by state.
Consulting industry experts: We spoke with industry experts, including Jesse Solomon, the co-founder of NCSolarNow, to understand the costs of going solar for both customers and installation companies. We also researched solar products in today’s market, including the cost of solar panels and accessories like solar batteries.

Expert Tips and Insights

ASK THE EXPERTS: Why is residential solar gaining popularity, and what are the benefits?

"First and foremost, [solar] is...

getting cheaper. Residential solar prices have fallen dramatically over the past decade, making it a better deal for households.

It's also popular because it has no emissions, allowing households to contribute to reducing climate change and local air pollution. And, especially when paired with [energy] storage, solar can serve as backup power for households, allowing access to electricity even when there's a power outage."

Michael Craig

Assistant Professor in Energy Systems at the University of Michigan

"Several factors explain the increase in...

residential solar power installations in recent years. One of the main reasons is the federal tax credit for home solar panels, which previously covered up to 26% of the installation costs, and now, due to a recent change of the law, will cover up to 30% through 2032."