Solar Panel Costs in 2025 : It's Usually Worth It

Published: March 2025

Solar panels cost about $21,816 on average when purchased with cash or $26,004 when purchased with a loan for a 7.2 kW system. While that price tag seems steep, the electricity bill savings you get from solar panels make them a worthwhile investment for most Americans.

Our team of solar experts analyzed data from the National Renewable Energy Laboratory, the U.S. Energy Information Administration, and the Bureau of Labor Statistics to get an accurate estimate of solar panel costs across the United States. This guide explains the costs involved in going solar, factors that affect pricing, and how to decide if solar panels are the right choice for you.

Use this calculator to find out how much solar panels cost for your specific home

How much do solar panels cost in 2025?

A 7.2 kW solar panel system costs $21,816 before incentives or $3.03 per watt of solar installed. The federal solar tax credit lowers solar system costs by $6,544, bringing the price down to $15,271. 

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How much are solar panels near me: Solar costs by state

Solar panel costs vary by location, mostly due to differences in labor and permitting costs. 

By analyzing data from NREL, The Bureau of Labor Statistics,  and the U.S. Energy Information Administration, we compiled a list of the average price of solar panels in each state.

Solar panel cost calculator: 5-step installation cost calculation

There is a lot to consider when figuring out how much you’ll spend on a solar installation. Here are five steps to help you calculate how much a system will cost to install for your home: 

Are the upfront costs of solar panels worth it?

Solar panels are usually a good investment; with an average payback period of about 10 years, you can expect 15 years of free solar energy. But, solar isn’t always right for everyone. Use this checklist to get an understanding of if a residential solar system might be worth it for you:

• Your household energy usage is high (11,500 kWh per year or higher)

• Your electric rates are high (over $0.17 per kWh)

• You qualify for the solar tax credit

• Local and utility incentives are available in your area

• Your utility offers net metering to give the best energy bill savings possible

• Your roof gets good sun exposure and faces south

• Going solar fits into your budget

Installing residential solar panels is a serious financial investment, so it’s important to consider the decision carefully. Here’s our complete guide to if solar panels are worth it to help you decide.

Solar power system cost by house size

On average, solar panels cost about $9.34 per square foot of your home’s total living space. This means a solar system costs about $13,075 for a 2,000-square-foot house, including the solar tax credit.

Note: Using square footage to estimate home solar system costs only offers a rough guide and will not provide a truly accurate price. Installers will not use cost per square foot. The best way to figure out solar panel costs is by looking at your energy usage and the system size needed. 

Solar panel cost breakdown: What are you paying for?

When you install a solar energy system, you’re getting more than just solar panels on your roof. Multiple pieces of equipment, such as racking, wiring, and inverters, must be installed so the solar panels can power your home.

• Solar panels and other equipment: Believe it or not, solar panels make up just 12% of total installation costs on average, with one solar panel costing about $200 before installation costs are considered. The cost of the solar equipment installed will vary with the performance, quality, and brand. 

• Soft costs: Solar soft costs are any costs that aren’t associated with the physical materials used in the system. Solar soft costs include permitting, inspection, system design costs, and installer overhead and profit. 

• Labor costs: Labor costs vary widely based on location, but they can also be impacted by the design of your system. The more complex it is, the more resources it may require to get up and running.

Hidden costs of going solar

While the biggest cost you need to be concerned about is your solar installation, there are some hidden solar costs that you might not know about:

6 factors that impact how much solar panels cost to install

How much your neighbor spends on solar won't be the same as what you do! Solar panel costs are unique to you and your home's energy needs, and they can vary by six main factors.

1. Energy usage

Energy consumption plays the biggest role in how much a solar installation will cost. The amount of energy you use determines how many solar panels you need. The higher your electricity usage, the more panels you need to install, and the more expensive the installation will be. 

2. System size

The system size you need determines how much you end up paying for solar. Larger systems will cost more money in total, but the cost per watt will often be a bit lower as soft costs are distributed across more total watts. You can think of this like buying a bulk package of paper towels — the total cost of your purchase is higher than if you bought a regular package, but the cost of each roll is lower. 

3. Solar equipment

The solar equipment you install impacts the final price of a solar system. For example, if you choose premium efficiency panels, you could spend 25% more on the installation but might see better utility bill savings because of additional energy production. Here are a few factors that will impact the cost of solar equipment:

• Performance: Solar panels with high power output or efficiency ratings often come at a higher price point because they can produce more energy. Premium efficiency solar panels can cost up to 25% more than standard efficiency models. 

• Equipment and solar panel type: Different technologies will have different costs. For example, string inverters cost less than microinverters but often have shorter warranties and need to be replaced before the end of the system’s life. Also, opting for equipment like solar shingles as opposed to conventional solar panels will increase costs.

• Additional equipment: You can pair your solar panels with battery storage to maximize the amount of solar power your home uses and have a source of backup power in case of a power outage. However, batteries will increase overall costs, usually by upwards of $15,000. 

4. House and roof characteristics

Home solar panels are generally installed on rooftops, so the system’s design largely depends on the roof’s characteristics. Complex roofs with multiple faces, dormers, vents, or skylights can increase installation and design labor costs, but they may also limit the number of panels you can install. 

The best direction for solar panels is south-facing roofs, but if your roof faces another direction, you may need to install more panels, increasing your total costs. You may also need a bigger system if your roof gets shaded throughout the day. Even how many stories your home is can directly affect the labor required to install the system.

5. Location

Where you live is another important factor to consider when thinking about solar panel costs, and it can impact the price tag in a few ways:

• Sun exposure: Solar panels generate more electricity in sunnier states, so fewer solar panels are needed to meet household energy needs, leading to lower overall costs.

• Labor costs: The cost of labor is different across states and will dictate the final price of going solar. 

• Permitting and inspection costs: Each town and utility has a different set of rules when it comes to the permits and inspections needed for a solar installation, which can make solar slightly more or less expensive compared to neighboring areas.  

6. Installer

How much each solar company charges for a solar installation is different. It can depend on how their business is structured, the margins they need to meet, and the equipment that they use. Because there can be such a large variation in the price charged by installation companies, you should always get quotes from at least three different installers. 

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Incentives help save on solar panel costs

Solar installations are not cheap, but there are solar incentives and rebate programs that can help lower costs by 30% or more. 

The most significant incentive for installing solar panels is the federal solar tax credit, equal to 30% of solar installation costs. On average, the federal solar investment tax credit saves homeowners $6,545 when they install solar. 

There are also local incentive programs offered by utility companies and state and local governments that directly reduce the upfront cost of solar panels by hundreds or even thousands of dollars. Some of the top states for home solar incentives include Massachusetts, New Jersey, and Washington D.C.!

How to pay for home solar panels

There are three main ways to pay for solar panels that can make going solar more cost-effective:

• Purchase with cash: Cash-purchased solar systems are usually the cheapest option and provide the best long-term solar savings. But, it does require a large upfront payment. 

• Use a solar loan:Solar loans let you pay for solar in monthly installments, but the total costs tend to be higher than cash systems because of interest payments and dealer fees that add an average of 43% onto the total price you end up paying.

• Get a solar lease or power purchase agreement (PPA): Solar leases and PPAs require no money upfront. Instead of buying the solar panels, you pay for the energy they produce. You don’t own the system, so the savings tend to be lower than leases or loans and you don’t directly benefit from solar incentives, but you don’t have to worry about maintenance costs. 

Solar panel cost data methodology 

Using the most recent NREL U.S. Solar Photovoltaic System Cost Benchmarks as a starting point, the SolarReviews data analytics team broke down costs for portions of an installation into 19 different cost categories. The team then adjusted these cost factors based on data from the Bureau of Labor Statistics and U.S. Energy Administration to account for state-by-state differences.

The result is a detailed look at how local labor markets shape the average cost of solar panels across the country.

How much do solar panels cost if…