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SolarReviews is the leading American website for solar panel reviews and solar panel installation companies. Our industry experts have a combined three decades of solar experience 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.
Published: March 2025
Written by Catherine Lane Catherine LaneCatherine has been researching and reporting on the solar industry for five years and is the Written Content Manager at SolarReviews. She leads a dyna...Learn more
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.
Average home solar panel installation costs: $21,816
Average solar panel cost per watt: $3.03
Average cost of solar panels per square foot of living space: $9.34 per square foot
Average solar panel loan cost: $26,004
How much you pay to go solar will depend on six factors, including your electricity usage, how many solar panels you install, the incentives you use, and the installer you choose.
Use this calculator to find out how much solar panels cost for your specific home
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.
System Size | Total cost | Cost with tax credit | Cost per watt |
---|---|---|---|
4 kW | $14,560 | $10,192 | $3.64 |
5 kW | $16,800 | $11,760 | $3.36 |
6 kW | $19,140 | $13,398 | $3.19 |
7 kW | $21,490 | $15,043 | $3.07 |
8 kW | $23,840 | $16,688 | $2.98 |
9 kW | $26,280 | $18,396 | $2.92 |
10 kW | $28,600 | $20,020 | $2.86 |
Using a solar loan makes solar panels more expensive! When you finance solar panels using a loan, the average cost per watt will be closer to $3.62 per watt installed. Solar-specific loans usually include dealer fees that add an average of 19.99% to the principal of the loan. By the end of a typical 20-year loan with 5.99% interest, a homeowner will pay about $31,273 in loan payments for a 7.2 kW system
Solar is a big investment, so it’s only natural to be drawn to quotes with the lowest price. But be cautious of extremely low quotes. Solar companies need to charge enough to stay in business for the 25-year lifespan of solar panels. Avoid quotes below $2.50 per watt or those without detailed cost breakdowns.
Learn more: Solar Panel Scams: 7 Red Flags to Avoid
Find trusted local solar companies in your area for the best prices possible
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.
State | Average system size (kW) | Average cost before incentives | Average cost after tax credit | Average cost per watt |
---|---|---|---|---|
Alabama | 5.8 | $21,047 | $14,733 | $3.42 |
Alaska | 5.1 | $19,084 | $13,359 | $3.52 |
Arizona | 7.0 | $20,759 | $14,531 | $2.79 |
Arkansas | 8.1 | $22,554 | $15,788 | $2.63 |
California | 5.9 | $20,840 | $14,588 | $3.33 |
Colorado | 4.9 | $17,799 | $12,459 | $3.41 |
Connecticut | 7.0 | $21,826 | $15,278 | $2.93 |
Delaware | 7.7 | $24,065 | $16,846 | $2.94 |
District of Columbia | 6.0 | $22,457 | $15,720 | $3.53 |
Florida | 8.4 | $23,351 | $16,346 | $2.61 |
Georgia | 6.3 | $21,166 | $14,816 | $3.17 |
Hawaii | 5.1 | $16,936 | $11,855 | $3.13 |
Idaho | 6.3 | $20,553 | $14,387 | $3.08 |
Illinois | 7.3 | $24,265 | $16,986 | $3.14 |
Indiana | 8.7 | $28,960 | $20,272 | $3.14 |
Iowa | 8.7 | $25,661 | $17,963 | $2.77 |
Kansas | 8.9 | $28,039 | $19,627 | $2.97 |
Kentucky | 7.3 | $21,173 | $14,821 | $2.74 |
Louisiana | 5.0 | $17,894 | $12,526 | $3.37 |
Maine | 7.7 | $25,348 | $17,744 | $3.10 |
Maryland | 8.2 | $25,372 | $17,760 | $2.91 |
Massachusetts | 7.3 | $24,221 | $16,955 | $3.12 |
Michigan | 6.5 | $23,669 | $16,568 | $3.44 |
Minnesota | 7.6 | $23,900 | $16,730 | $2.96 |
Mississippi | 5.2 | $17,284 | $12,099 | $3.14 |
Missouri | 10.9 | $31,032 | $21,722 | $2.68 |
Montana | 7.1 | $21,957 | $15,370 | $2.91 |
Nebraska | 8.9 | $26,294 | $18,406 | $2.79 |
Nevada | 7.2 | $21,745 | $15,222 | $2.85 |
New Hampshire | 7.8 | $24,627 | $17,239 | $2.97 |
New Jersey | 7.5 | $24,857 | $17,400 | $3.12 |
New Mexico | 5.2 | $17,251 | $12,076 | $3.12 |
New York | 6.9 | $24,479 | $17,135 | $3.33 |
North Carolina | 7.0 | $23,000 | $16,100 | $3.10 |
North Dakota | 10.8 | $35,906 | $25,134 | $3.13 |
Ohio | 7.2 | $22,209 | $15,546 | $2.90 |
Oklahoma | 7.0 | $19,618 | $13,733 | $2.64 |
Oregon | 5.9 | $19,963 | $13,974 | $3.18 |
Pennsylvania | 7.8 | $25,633 | $17,943 | $3.10 |
Rhode Island | 6.4 | $20,680 | $14,476 | $3.04 |
South Carolina | 7.6 | $24,663 | $17,264 | $3.06 |
South Dakota | 8.0 | $23,562 | $16,493 | $2.78 |
Tennessee | 6.7 | $21,198 | $14,839 | $2.97 |
Texas | 7.1 | $21,460 | $15,022 | $2.85 |
Utah | 5.8 | $19,637 | $13,746 | $3.19 |
Vermont | 11.2 | $33,301 | $23,311 | $2.79 |
Virginia | 6.9 | $22,346 | $15,642 | $3.05 |
Washington | 7.1 | $24,160 | $16,912 | $3.20 |
West Virginia | 8.4 | $25,154 | $17,608 | $2.83 |
Wisconsin | 7.0 | $22,401 | $15,681 | $3.01 |
Wyoming | 6.9 | $23,299 | $16,309 | $3.18 |
Solar panels for businesses. Commercial solar installations are a great way for companies to lower energy costs. Generally, installing solar panels on businesses costs a bit less per watt because the systems are larger, but the total costs will be higher. In 2025, the average cost for commercial solar panels is just about $2.00 per watt.
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:
Estimating how many solar panels you need will help you find the right system size for your home. Most homes need between 15 and 19 solar panels, or an average system size of 7.2 kW. We have a complete guide to helping you solve how much solar you need, or you can use the table below as a starting point:
Home Size | Estimated monthly electric bill | Estimated system size needed |
---|---|---|
1,000 sq. feet | $77 | 3.2 kW |
1,500 sq. feet | $115 | 4.8 kW |
2,000 sq. feet | $153 | 6 kW |
2,500 sq. feet | $191 | 7.6 kW |
3,000 sq. feet | $230 | 9.2 kW |
Solar panel costs are usually measured in the cost per watt of solar installed. However, solar system sizes are measured in kilowatts (kW). To calculate the total price of installing a home solar system, you’ll need the system size to be in watts.
To convert kilowatts to watts, all you need to do is multiply the system size in kW by 1,000. Here’s an example:
7.2 kilowatt system x 1,000 = 7,200 watts of solar installed
Next, you’ll want to take the total size of the system in watts and multiply it by the cost per watt of solar in your area. You can find a complete list of the average solar cost per watt in each state in the section above. For reference, the national average cost of solar panels is $3.03 per watt.
7,200 watts of solar installed x $3.03 per watt installed = $21,816 total solar installation cost
Solar rebates help make solar more affordable by directly lowering the upfront cost of a solar installation. If you have access to solar rebates, consider yourself lucky! They are few and far between these days. Check with your local government and utility company for rebates that are available in your area.
For our example, let’s say your utility company offers a $2,000 rebate. Remove that from the upfront cost of your installation.
$21,816 installation cost - $2,000 rebate = $19,816 installation cost
The 30% federal solar tax credit is the most widely available solar incentive today and can help reduce solar costs by thousands of dollars. Simply multiply the cost of the system after any rebates are applied by 30% to find your tax credit value. Then, subtract that from the system cost to get an idea of how much the installation will be.
Let’s look at our example again:
$19,816 installation cost after rebates x 30% federal tax credit = $5,945 tax credit value
$19,816 installation cost after rebates = $5,945 tax credit value = $13,871 effective system cost
Now, it’s important to remember that the solar tax credit does not directly lower the upfront cost of going solar like rebates do. You will pay the full price of your system minus any rebates. You’ll see the tax credit savings when you file your taxes.
So for our example, you would pay $19,816 for the installation. When you file your taxes for the year, your tax liability will be lowered by $5,945. That means you’ll owe less in taxes and potentially get back a higher tax return!
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.
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.
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.
Item | Percentage of Cost | Average cost per watt |
---|---|---|
Solar panels | 12% | $0.36 |
Inverter | 11% | $0.33 |
Racking | 8.5% | $0.26 |
Electrical | 9.5% | $0.29 |
Labor | 5.5% | $0.17 |
Permitting inspections | 3% | $0.09 |
Customer acquisition | 15% | $0.45 |
Soft costs | 19.5% | $0.59 |
Profit | 16% | $0.48 |
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.
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:
Solar panels have no moving parts, so very little maintenance is required. However, getting routine professional solar panel cleaning and inspections every two years can keep your system in tip-top shape. These solar maintenance costs can be about $300 per session, but they are optional.
If you purchase your solar panels with a solar loan, a dealer fee will likely be tacked onto your installation price. These fees can range from 20% to 50% of your total installation costs - so be sure to look at your quote closely if you want to finance!
Solar panels should be installed on roofs that are no more than 15 years old. This won’t be an issue for every homeowner, but if you really want solar and your roof is getting old, roof replacement costs are something to consider.
Not all homeowners need to get a new electrical panel when they go solar, but if you live in an older home or your breaker box is too small, you may need to get an upgrade. Depending on the project, an electrical panel upgrade for solar could cost between $2,000 and $3,000.
If your solar system uses a string inverter, it may need to be replaced. String inverters generally last between 10 and 12 years, while solar panels last for 25 years or more. Getting a new string inverter could cost about $1,500.
Solar panels are extremely durable, and a National Renewable Energy Laboratory study found that solar panel failure rates are incredibly rare, but just like with any purchase, your solar panels may require repairs in the future. In the unlikely event this happens, the issue may be covered by a solar warranty.
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.
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.
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.
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.
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.
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.
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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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.!
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.
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.
Solar panels cost an average of $3.03 per watt for a cash-purchased system and $3.70 per watt for a system financed with a solar loan. For an average 7.2 kW system, that’s around $21,816 for a cash system or $26,604 for a solar loan.
You can expect to pay $130.31 per month for a 7.2 kW solar system using a typical solar loan. Over the course of a 20-year term, that’s over $31,273 total, including dealer fees and interest payments. When compared to purchasing solar panels with cash, a loan costs about 43% more on average.
7.2 kW Solar Installation Estimated Loan Payments | |
---|---|
Loan Term | 20 years |
Interest rate | 5.99% |
Dealer fee | 19.99% |
Cash price | $21,816 |
Financed amount | $26,004 |
18-month Balloon Payment | $7,801.20 |
Monthly payment | $130.31 |
Total payments in 20 years | $31,273.33 |
A DIY solar installation will cost somewhere between $9,000 and $15,000, depending on the system size and equipment used. When you install solar yourself, you don’t have to pay labor costs, customer acquisition costs, or installer profit margins. However, installing solar panels is dangerous, and taking the DIY route can void your warranties and even prevent you from connecting to the grid.
Used solar panels will cost less than new solar panels, however, we wouldn’t recommend using them to power your home. Used solar panels likely won’t be covered under the manufacturer’s warranty, and you’ll sacrifice performance.
Solar panels can cost 20% cheaper when you compare multiple solar quotes. Talking to just one installer won’t give you the full picture of what’s being offered in your area. Instead, talk to multiple companies so you can find the perfect balance between quality and cost.
Catherine has been researching and reporting on the solar industry for five years and is the Written Content Manager at SolarReviews. She leads a dynamic team in producing informative and engaging content on residential solar to help homeowners make informed decisions about investing in solar panels.
Catherine’s expertise has garnered att...
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