Remember the days when opening your electric bill embarrassed you? I do. It felt like throwing money away every month. But then I found solar power, and everything changed. The idea of using the sun’s free energy was thrilling, but I was concerned about how much do solar panels cost as a whole. If you’re thinking the same, you’re in for a surprise.
Solar panel prices have fallen a lot in recent years. Getting solar panels for your home costs between $20k and $30k before any discounts (such as incentives and tax credits). There is also an option to take a solar loan if you don’t want to purchase the system at once. Also, bear in mind that a variety of different factors affect solar panels pricing. This is a big drop from a decade ago when similar systems were over $40k.
This big change in solar panel prices is not just great for your wallet but for the planet as a whole. With prices now competitive with traditional energy, more and more people choose clean energy.
Understanding Solar Panel System Components
Let’s briefly take a look at what photovoltaic system components are needed for a solar panel installation so that you will have a basic understanding. A solar setup is more than just panels; it has other important parts that work together to turn sunlight into electricity for your home.
The main parts of the solar panel system and their cost compared to other parts of the system:
| Component | Function | Approximate % of Total Cost |
|---|---|---|
| Solar Panels | Convert sunlight to DC electricity | 20-30% |
| Inverter | Converts DC electricity produced by the solar panels to AC electricity for home use | 17-22% |
| Racking | Secures the solar panels to the roof or ground | 3-10% |
| Wiring | Connects all the components of the system | 2-3% |
| Monitoring System | Tracks the performance of your solar system | 1-3% |
| Solar Batteries (Optional) | Store excess energy for later use | 8-12% |
| Installation Labor | Labor involved in setting up the entire system | 10-20% |
| Permits and Interconnection | Solar permit documents from local authorities and a fee for connecting solar energy system to the grid | 4-6% |
How Much Do Solar Panels Cost in Different States And Why They Become Cheaper
Solar panel costs have dropped a lot over the last ten years. This makes solar energy more affordable for homeowners in the U.S. A 6-kilowatt solar system costs about $18,000 on average. This shows how renewable energy is getting cheaper.
Back in 2012, on the contrary, installing solar panels for a home cost $3.60 per watt. Today, that price is down by 31%. This big drop has led to more people investing in solar energy.
Factors Driving Cost Reductions
Several things have made solar panels cheaper:
- Improved manufacturing processes
- Economies of scale
- Increased competition in the solar industry
- Technological advancements
These factors have lowered the cost of solar power. Now, it’s becoming a more appealing choice for homeowners.
Regional Variations in Solar Panel Costs
The price of solar panels changes a lot from state to state. One thing people noticed is that there is a trend toward having lower prices in the southern states and higher in the northern states. Again it depends however there might be a case sometimes. Here’s how much a 6-kilowatt system costs in different places:
Average cost of solar by state
| State | Average cost of a solar system before Incentives | Average cost of a solar system after incentives | Average tax credit value for a solar system | Average Cost Per Watt | Average 20-Year Savings |
|---|---|---|---|---|---|
| Alabama | $39,250 | $27,475 | $11,775 | $3.37 | $34,732 |
| Arkansas | $37,234 | $26,064 | $11,170 | $2.73 | $23,460 |
| Arizona | $27,943 | $19,560 | $8,383 | $2.21 | $20,486 |
| California | $19,973 | $13,981 | $5,992 | $2.39 | $70,728 |
| Colorado | $28,374 | $19,862 | $8,512 | $3.05 | $17,919 |
| Connecticut | $32,598 | $22,819 | $9,779 | $3.07 | $77,167 |
| Washington D.C. | $29,103 | $20,372 | $8,731 | $3.14 | $69,184 |
| Delaware | $30,805 | $21,564 | $9,242 | $2.48 | $28,029 |
| Florida | $37,234 | $22,805 | $9,773 | $2.31 | $44,743 |
| Georgia | $31,283 | $21,898 | $9,385 | $2.64 | $15,008 |
| Hawaii | $29,362 | $20,553 | $8,809 | $3.50 | $100,575 |
| Idaho | $34,004 | $23,803 | $10,201 | $2.75 | $10,303 |
| Iowa | $38,678 | $27,075 | $11,603 | $3.10 | $17,283 |
| Illinois | $34,694 | $24,286 | $10,408 | $3.06 | $48,884 |
| Indiana | $38,486 | $26,940 | $11,546 | $3.14 | $18,188 |
| Kansas | $34,784 | $24,349 | $10,435 | $2.97 | $19,773 |
| Kentucky | $40,503 | $28,352 | $12,151 | $2.75 | $14,878 |
| Louisiana | $36,288 | $25,402 | $10,886 | $2.98 | $10,075 |
| Massachusetts | $32,851 | $22,996 | $9,855 | $3.31 | $100,633 |
| Maryland | $35,908 | $25,136 | $10,772 | $2.81 | $40,582 |
| Maine | $33,080 | $23,156 | $9,924 | $3.26 | $27,993 |
| Michigan | $30,268 | $21,188 | $9,080 | $3.13 | $15,789 |
| Minnesota | $35,521 | $24,865 | $10,656 | $3.11 | $22,532 |
| Missouri | $34,832 | $24,382 | $10,450 | $2.79 | $20,613 |
| Mississippi | $40,267 | $28,187 | $12,080 | $3.11 | $16,553 |
| Montana | $29,692 | $20,784 | $8,908 | $2.56 | $13,085 |
| North Carolina | $30,595 | $21,417 | $9,179 | $2.39 | $20,419 |
| Nebraska | $30,456 | $21,319 | $9,137 | $2.24 | $15,644 |
| New Hampshire | $33,918 | $23,743 | $10,175 | $3.37 | $54,315 |
| New Jersey | $31,564 | $22,095 | $9,469 | $2.75 | $43,804 |
| New Mexico | $27,681 | $19,377 | $8,304 | $3.06 | $18,303 |
| New York | $33,550 | $23,485 | $10,065 | $2.98 | $31,934 |
| Nevada | $28,266 | $19,786 | $8,480 | $2.24 | $56,491 |
| Ohio | $30,940 | $21,658 | $9,282 | $2.67 | $39,370 |
| Oklahoma | $34,133 | $23,893 | $10,240 | $2.48 | $30,746 |
| Oregon | $30,090 | $21,063 | $9,027 | $2.64 | $30,926 |
| Pennsylvania | $34,181 | $23,927 | $10,254 | $2.81 | $49,526 |
| Rhode Island | $31,306 | $21,914 | $9,392 | $3.27 | $77,327 |
| South Carolina | $31,247 | $21,873 | $9,374 | $2.44 | $31,611 |
| Tennessee | $38,084 | $26,659 | $11,425 | $3.23 | $16,652 |
| Texas | $27,971 | $19,580 | $8,391 | $2.15 | $59,518 |
| Utah | $27,124 | $18,987 | $8,137 | $2.65 | $ |
| Vermont | $29,860 | $20,902 | $8,958 | $2.98 | $24,007 |
| Virginia | $37,365 | $26,156 | $11,210 | $2.94 | $36,145 |
| Washington | $34,196 | $23,937 | $10,259 | $2.69 | $9,995 |
| West Virginia | $43,176 | $30,223 | $12,953 | $3.10 | $40,537 |
| Wisconsin | $34,023 | $23,816 | $10,207 | $3.09 | $26,727 |
| Wyoming | $48,315 | $33,821 | $14,495 | $3.76 | $ |
How Much Do Solar Panels Cost? Factors to Consider
The factors are placed in a chaotic order as each of you has different criteria which you look at and which make more sense for your situation. So even if the solar panel type is placed in the first position that doesn’t mean it’s more important than other factors.
Solar Panels Type
There are three types of solar panels: Monocrystalline, Polycrystalline, and Thin-Film. Each type has its pricing and capabilities. Choosing better panels might cost more at first. But they make more energy, which can pay for themselves over time. Think about the long-term savings when figuring out how much do solar panels cost.
- Monocrystalline panels are made from single-crystal silicon, making them the most efficient and space-efficient option. They typically cost between $1 to $1.50 per watt, making them the most expensive option. Despite that fact, they are still popular for residential use due to their high efficiency and sleek appearance.
- Polycrystalline panels are composed of multiple silicon crystals, making them less efficient than monocrystalline panels but more affordable, with prices ranging from $0.90 to $1.50 per watt. You will need these panels in slightly larger quantities to produce the same amount of energy, making them better suited for installations where space is less of a concern, such as on commercial roofs or in solar farms.
- Thin-film panels are made from materials like cadmium telluride or amorphous silicon, and they are the least efficient but the most flexible and lightweight. They are typically used in large-scale installations or on unconventional surfaces where weight and flexibility are critical. Thin-film panels are the most affordable, with prices between $0.50 to $1 per watt, but they require more space to generate the same power as crystalline panels. They are not used for solar panel systems for homes mostly as they have low production. It would rather be a perfect option for RVs, campers, and DIY home setups. They are also not as durable as monocrystalline and polycrystalline as their last period is about 20 years.
Solar Panels Size
An average, of between 20 and 25 panels is enough to power the home, however, the numbers can vary. The more solar panels you buy the lower price would be. And the bigger solar panel systems produce more electricity and cost more money. Below is the approximate picture of what can be in practice.
| System Size | Average Cost/Electicity | Cost Before Federal Tax Credit | Cost After Federal Tax Credit |
|---|---|---|---|
| 3 kW | $3.10/W | $9,300 | $6,510 |
| 4 kW | $3.26/W | $13,040 | $9,128 |
| 5 kW | $2.97/W | $14,850 | $10,395 |
| 6 kW | $2.89/W | $17,340 | $12,138 |
| 7 kW | $2.81/W | $19,670 | $13,769 |
| 8 kW | $2.77/W | $22,160 | $15,512 |
| 9 kW | $2.79/W | $25,110 | $17,577 |
| 10 kW | $2.73/W | $27,300 | $19,110 |
| 11 kW* | $2.71/W | $29,810 | $20,867 |
| 12 kW | $2.65/W | $31,800 | $22,260 |
| 13 kW | $2.60/W | $33,800 | $23,660 |
Number of Watts
The cost of solar panel installation is closely tied to the number of watts your system requires. The larger your energy needs, the more watts you’ll need, which increases the number of panels and overall cost. Solar power systems typically range from 3kW to 10kW or more, with the price per watt decreasing slightly as the system size increases.
Equipment Quality and Brand
The quality and brand of the solar equipment you choose significantly influence your installation costs. Premium brands that offer higher efficiency, better warranties, or advanced features like improved durability or aesthetics generally come at a higher price. While opting for top-tier equipment can increase your upfront costs, it may also provide better long-term performance, reliability, and savings on maintenance. Conversely, budget-friendly options may reduce initial costs but could lead to higher expenses over time due to lower efficiency or shorter lifespan.
Type of Mounting System
The type of mounting system used for your solar panels also influences the installation cost. Fixed solar mounts for standard roofs are generally the most cost-effective option ($15-50$ for one solar panel), but specialized mounts may be required depending on your roof’s material or angle. For example, ground mounts ($70-$200 for one solar panel), which are used when roof space is insufficient or unsuitable, and solar panels are installed on the ground, are more expensive due to additional materials and labor. Adjustable ($30-$250 per one solar panel), which can be adjusted manually to follow the sun’s path to maximize efficiency, or solar tracking mounts ($450-$775 per one solar panel), which follow the sun’s path automatically to maximize efficiency, are the most costlier options with higher energy production. So it’s usually more cost-effective to buy a standard ground-mount array with a greater amount of panels.
Permitting and Inspection Fees
Permitting and inspection fees are often overlooked but can contribute to the overall cost of a solar panel installation. Local governments typically require permits to ensure the system complies with zoning, electrical, and safety standards. These fees can vary depending on your location and the complexity of your installation. Additionally, inspections are usually required post-installation to verify that the system is properly installed and safe to operate, adding to the overall expense.
Energy Storage Options
Incorporating energy storage options, such as solar batteries, can significantly impact the total cost of your solar panel installation. Batteries allow you to store excess energy generated during the day for use during nighttime or power outages, increasing your system’s functionality and independence from the grid. A household lithium-ion battery system typically costs between $7k and $14k, not including installation. Even though this is a substantial expense, many homeowners may find it beneficial in the long run due to the savings and increased security.
Amount of Sunlight
The amount of sunlight your location receives also plays a role in determining your solar installation costs. Areas with abundant sunlight can generate more electricity with fewer panels, potentially lowering the system size and cost. Conversely, regions with less sunlight may require more panels to achieve the same energy output, increasing the total cost. For instance, the sunniest states in America (Arizona, California, Colorado, and Florida) might be cheaper for solar than cloudy areas.
Installation Complexity
The complexity of the installation also affects the overall cost of going solar. Labor costs might be increased by factors such as the type of roof, its pitch, and any necessary structural reinforcements. For instance, installing panels on a steep or multi-faceted roof is more labor-intensive than on a flat, unobstructed one. Additionally, older homes may require electrical upgrades to accommodate a solar system, adding to the installation complexity and total cost.
Local Incentives
Local incentives, such as tax credits, rebates, and grants, can significantly (by $2,5k and more) reduce the cost of solar panel installation. Some regions offer substantial financial incentives to encourage solar adoption, which can lower your upfront costs or provide long-term savings through reduced energy bills. These incentives vary widely by location and can change over time, so you should research and take advantage of available programs when planning your solar installation.
In short terms, the federal solar tax credit allows you to claim 30% of the cost of your solar energy system as a credit to your federal tax bill if you purchased solar panels between 2022 and 2032. In 2033 credit rate will be 26%, 22% in 2034, and will be over in 2035. So, for a $20k solar panel system, you’ll receive a $6k credit, which directly reduces your tax bill. As a result, the actual solar panel system price will be $14k. You can find incentives near you by each state in the Database of State Incentives for Renewables and Efficiency (DSIRE).
Many states offer more ways to make solar affordable. These include:
- State tax credits
- Cash rebates
- Property tax exemptions
- Sales tax exemptions
- Solar Renewable Energy Credits (SRECs)
How Much Do Solar Panels Cost? Additional Costs of Solar System
These costs are obvious and sometimes nonobvious. While cleaning costs can lie on the surface, tree trimming might be the last thing people think of.
Maintenance
Maintenance costs approximately $150 per year if you hire a professional. The professional will only inspect and (not repair) the panels for signs of repairs.
Cleaning
Hiring a professional will cost you approximately $150 per cleaning. If you get the hang of cleaning solar panels, understand how to do it, and find the proper equipment, this could become a good saving for you with only one initial payment of around $100. You should only do the cleaning by yourself when you know exactly what to do and how.
Home Insurance
The value of your house may rise as a result of installing solar panels, which could raise the price of your homeowner’s insurance. A Zillow analysis from 2018 to 2019 found that homes with solar panels sold for 4.1% more than comparable homes without solar panels. This might not always apply to your homeowners’ insurance, though. To find out if adding solar panels could result in higher insurance costs, you should speak with your provider.
Solar System Monitoring
Depending on the solar panel business, some installers may provide free solar system monitoring so you can adjust your lifestyle and get the most out of your solar panel system by observing your electric usage and solar panel production in real time. Some solar companies can have this feature integrated with their energy solutions, and other companies may charge more for solar monitoring systems.
Tree Trimming
In certain circumstances, you might wish to spend money on tree-cutting services to help make your installation site more sunlight-accessible. A tree’s trimming might cost anywhere from $250 to $700.
Roof Repair
If you decide to place solar panels on your roof, your roof needs a solid foundation. To make sure that your house is protected from the weather and that installing the panels won’t present any risks, repair or replace any outdated roofs first. Depending on the degree of the damage, roof repairs can cost anywhere from $150 to $7,000. The average cost is $950. Even more expensive is replacing a roof; the average cost is $11k, with prices ranging from $6k to $80k.
Solar Panel Repair
Solar panel repairs can cost anywhere from $200 and $1,700, depending on how badly they are damaged. Repairing a minor crack will probably cost the least while fixing a solar panel inverter will usually cost more.
Examine your warranty to determine if you may reduce the cost of fixing your solar panels. Your solar panel installation firm may offer an active or comprehensive warranty. The majority of producers provide a 25-year warranty.
Solar Shingles and Tiles
Some people choose to install solar roofs or solar shingles are installed. These roofs replace your old roof, shielding your house from the weather and adding an eye-catching, energy-saving feature. Solar shingles typically cost between $15k and $20k. For a 6.31 kW solar roof, it costs $88k. Powerwalls and Tesla roofs are substantially more expensive, but they also include a battery storage system. The benefits of solar shingles include a more streamlined appearance and a potential rise in property value.
Additional Electrical Work
Additional electrical work can add to the overall cost of your solar installation. If your home’s electrical system is outdated or insufficient to handle the new solar setup, you may need to upgrade the electrical panel, rewire certain areas, or add new circuits. These upgrades ensure your system operates safely and efficiently but can significantly increase installation costs.
How Much Do Solar Panels Save?
Different points that can help you save more when going solar:
- Areas with more sunlight typically generate more electricity, increasing savings.
- Higher electricity costs can lead to greater savings when switching to solar.
- The more electricity you use, the more you can potentially save by offsetting this with solar power.
- A larger system can produce more electricity, but the system’s size should match your energy needs.
- Federal and state incentives can significantly reduce the how much do solar panels cost initially, increasing long-term savings.
- Owning the panels outright often results in the most savings over time, while leasing or entering into a Power Purchase Agreement (PPA) might reduce upfront costs but offer lower overall savings.
- Net metering allows you to sell excess electricity back to the grid, further increasing savings.
- Some states have Solar Renewable Energy Certificates (SRECs) or other incentive programs that provide additional income.
There are plenty of points to include. However, if we take an average U.S. household electricity consumption, about 900 kWh of electricity per month, and compare it with an average 6 kW solar installation that generates 915 kWh of electricity per month, we are in positive territory. This saving directly affects how much do solar panels cost. Note: A regular 6kW energy system has 15 solar panels.
The case above is ideal and might not apply to yours. So, to estimate how much money solar panels will save take the amount of electricity you spend annually and deduct the amount of electricity the solar system you consider produces. Using your current utility rates get the full amount of savings.
The typical payback period for solar panels is 6-12 years, depending on the upfront costs, incentives, and energy savings. After this period, most of the energy produced by the panels is essentially free, aside from any maintenance costs.
How to Pay for Solar Panels
Depending on the payment method solar providers propose, the overall solar power cost would be affected. Here are they:
- Regular Payment: If your money situation permits you try this option as it is the most cost-effective one. You will be able to take advantage of the federal tax credit at your next income-tax filing and save yourself from paying interest over time.
- Solar Loans: If you don’t want to pay upfront full amount of money and are ready to put up with interest rates, try to consider solar loans. With a small amount of money, you will be able to start using the panels immediately after their installation. Keep in mind that you will have to contribute monthly payments with interest added and as a result, the final solar panel system cost will increase. So, plan accordingly.
- Solar Lease or Power Purchase Agreement (PPA): There are states where homeowners can lease solar panels from companies. So, the solar panel system will be installed by that company and will not belong to the homeowner. The homeowner will be paying that company a fixed (in some cases rising each year) amount of money every month. Although you can get solar power at a low monthly rate and don’t pay heavy upfront sums, remember that you do not own these panels, and you will not be able to receive state or federal incentives.
- Power Purchase Agreement (PPA): A solar PPA lets you pay little to nothing for the actual installation of the PV system. Instead, you pay monthly payments to a utility company based on the energy generated by the system. Think of this as if you are paying for your usual electricity bill. As with a lease, you don’t own the system and are thus ineligible for tax incentives.
- Solar Loan Refinancing: A convenient and efficient way to make it possible for your home to install solar systems is through solar financing. Nevertheless, if things don’t work out with solar loans, you might have to refinance them with a different lender. HELOC, Cash-Out, and a home renovation mortgage are the three main options for refinancing solar loans. The ideal option for you will rely on several variables, including the equity you have in your home, your existing mortgage rate, and your unique financial requirements and goals. HELOC involves using the equity in your home to pay off the existing solar loan, potentially securing a lower interest rate or more flexible repayment terms. Refinancing a solar loan with Cash-Out involves replacing your existing mortgage and solar loan with a new mortgage that includes the solar loan balance, plus additional cash, potentially at a lower interest rate or better terms. Home Renovation Mortgage involves rolling the existing solar loan into a new mortgage that finances both your home and additional renovation costs, potentially securing better terms and a single monthly payment.
When Solar Panel Investment Will Be Paid Off
Let’s take an example. If an average annual energy bill in 2024 is approximately $1773 ($147 monthly) and the average 6kW solar system costs about $12k after the tax credit, it could take you about 6.7 years to pay off the investment in the solar panel system. Again, this is just an example and your case might differ from ours so consider accordingly.
Solar Panel Installation
The basic process of solar panel system installation is below but you need to bear in mind that your case might differ from what will be provided below. What you can do is to find a solar company that provides and have a call with their solar energy consultant so they dive into your case and voice you the details of the process.
- Initial Check-Up: You agree on the solar panel system project you want to be implemented. Then solar panel expert(s) visits your home to estimate the volume of work. The expert(s) will also check the current state of your roof and electrical setup.
- Get Permits: In most cases, you would need a permit for solar panel installation. Luckily, you should get help from your solar provider to drive that paperwork with authorities. You might need to wait some time until the permits are approved.
- Apply for Incentives: Understand your local incentive programs as they vary from state to state and apply for these incentives once you choose before starting the solar panel installation.
- Installation: An average installation takes 1-3 days and it’s recommended for you to stay at home during that period so questions if any arrive during installation and can be resolved quickly.
- Cleanup: Once solar panel installation is completed the installers clean up the area.
- Inspection: After the cleanup your solar provider sends you a special inspector who checks that the solar panel system complies with standards.
- Utility connection: If you want to connect your system to the grid then you must connect it to your local utility system. This can be done with the help of your utility company.
- Ready to Go: After needed permissions are achieved you are ready to turn the solar system on
What About DIY Solar Panel Installation?
In theory, you can of course install the system yourself. But since the work is difficult and dangerous, it’s better to not rely on yourself here in practice. For DIY you would need specialized knowledge and equipment, heavy equipment, rooftop climbing, and a potential risk of electric shock. In most places, installing solar panels entails paying for an inspection and a permit, and in certain states, obtaining a license as a solar contractor. Your system’s warranty may be voided by an improper installation.