How Much Do Solar Panels Cost in 2025? (Expert Reviewed)
Typical cost range:
$27,000–$32,000
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Several factors impact solar panel prices, but our research found that the average solar system for a 2,000-square-foot home is roughly $31,460.* If that cost seems out of your budget, don’t worry—this figure is before applying valuable solar incentives that can shave off thousands.
Other factors, such as system type and size and your location, can raise or lower this price. Our guide looks at solar panel cost by panel type, home size, and state and includes ways to keep your expenses as low as possible.
*Cost figures in this article are sourced from EnergySage, ConsumerAffairs, and the National Renewable Energy Laboratory.
Key Takeaways
- For a 2,000 square foot home, the typical cost range for a solar panel system is between $27,000 and $32,000. Despite this, most owners break even on their investment within thirteen years.
- The federal solar tax credit allows you to claim 30% of your system cost on your income taxes, saving you thousands.
- The average home 10-kW solar system requires between 19-24 solar panels to produce enough electricity to help run the home.
Best Solar Companies of 2025
Our team evaluated 69 US solar companies based on reputation, solar services, payment options, state availability, and warranty coverage. Here are our picks for the best solar companies:
- Blue Raven Solar: Most Reputable
- Venture Solar: Best Northeast Regional Installer
- Solar Energy World: Best East Coast Installer
- Sunrun: Best Solar Panel Leasing
Compare Solar Companies
When you’re ready to choose a solar provider, check out our guide to the best solar companies. We used a rigorous methodology to rate and review leading brands, comparing them on product selection and performance, service options, customer reviews, Better Business Bureau (BBB) rating, and more. Palmetto and Blue Raven earned top scores and have some of the most comprehensive solar warranties and best-rated custom support.
| Company | Logo | Star Rating | BBB Rating | Warranties | Link |
|---|---|---|---|---|---|
| A+ | 25 years | Get Quote | ||
 | A+ | Read Our Review | |||
 | A+ | 25–30 years | Read Our Review | ||
| A+ | 10 years | Get Quote |
What Is the Average Cost of Solar Panels?
The average cost of a 10-kilowatt (kW) residential solar panel system is $31,460. That’s before using any solar incentives or rebates, which can reduce your expenses by several thousand dollars. We’ll talk more about this later in the article. Your total solar panel cost depends on a few factors: your system type, home size, location, payment selection, and any incentives you apply.
| System Cost Range | Average Cost Before Tax Credit | Average Cost After Tax Credit |
|---|---|---|
| Low-end | $25,960 | $18,172 |
| Average | $31,460 | $22,022 |
| High-end | $36,960 | $25,872 |
How Much Do Solar Panels Cost by Type?
Your solar panels will likely cost between $0.30 and $1.50 per watt. There are three main types of solar panels: monocrystalline, polycrystalline, and thin-film. Monocrystalline solar panels are considered top quality due to their efficiency and energy production, so expect to pay more for their high performance. You may also need to invest in monocrystalline panels if you have a smaller roof to get the most energy production out of the fewer panels your roof can accommodate. Despite their increased initial cost, higher solar panel efficiency can help you save money each month by lowering your utility bill.
If you have a larger roof, you may be able to buy more panels with lower production, such as polycrystalline panels, for a decreased cost. Your solar provider can help you determine which option is best for your home. Some provider options can cost more than others, usually in exchange for higher performance or additional features. The Tesla Roof is more expensive than typical solar panels, for example.
Thin-film solar panels are the most budget-friendly, but they don’t generate much energy, making them best for small solar projects, such as powering a shed or recreational vehicle (RV).
| Panel Type | Average Cost Per Watt |
|---|---|
| Monocrystalline | $0.75–$1.50 |
| Polycrystalline | $0.70–$1.00 |
| Thin-film | $0.30–$0.70 |
How Much Do Solar Panels Cost by Home Size?
According to the latest U.S. census, the median size of a completed single-family home is 2,299 square feet. That house size requires more than 9,000 kilowatt-hours (kWh) of energy to power annually, requiring at least a 10-kW solar system. According to the data below, we estimate this costs between $29,410 and $34,353.
| Home Size (sq. feet) | Estimated Annual Electricity Needed | Recommended System Size | Number of Panels* | Average Cost | After Tax Credit |
|---|---|---|---|---|---|
| 1,000 | 4,710 kWh | 5-kW system | 13 | $16,002 | $11,202 |
| 2,000 | 9,420 kWh | 10-kW system | 25 | $29,410 | $20,587 |
| 2,500 | 11,775 kWh | 12-kW system | 31 | $34,353 | $24,047 |
| 3,000 | 14,130 kWh | 15-kW system | 39 | $39,338 | $27,537 |
How Much Do Solar Panels Cost by State?
Solar panel costs vary from state to state, partly due to the area’s average electricity bill and solar suitability. For example, Hawaii pays the most for electricity, while Utah pays the least. Those in Hawaii stand to see bigger savings than those in Utah when going solar.
Here’s a look at what you can expect a 10-kW system to cost in your state and an estimated time to return on investment. Note that cost per watt may vary by system size. You can also review if your state has a tax credit available. States are ordered from the least expensive solar installation cost to the most expensive.
| State | 10-kW System Cost Before Tax Credit | Federal Tax Credit Deduction | State Tax Credit Deduction | After Credit Cost | Average Cost Per Watt | Time to Return on Investment |
|---|---|---|---|---|---|---|
| South Dakota | $22,880 | $6,864 | N/A | $16,016 | $2.29 | 10 years, 5 months |
| Alaska | $23,060 | $6,918 | N/A | $16,142 | $2.31 | 10 years |
| Montana | $23,240 | $6,972 | N/A | $16,268 | $2.32 | 13 years, 2 months |
| North Dakota | $23,240 | $6,972 | N/A | $16,268 | $2.32 | 11 years, 1 months |
| Alabama | $23,510 | $7,053 | N/A | $16,457 | $2.35 | 8 years, 2 months |
| Arizona | $24,400 | $7,320 | $1,000 | $16,080 | $2.44 | 9 years, 8 months |
| Wyoming | $24,590 | $7,377 | N/A | $17,213 | $2.46 | 14 years, 6 months |
| Florida | $25,300 | $7,590 | N/A | $17,710 | $2.53 | 9 years, 7 months |
| Mississippi | $25,310 | $7,593 | N/A | $17,717 | $2.53 | 10 years |
| Hawaii | $25,580 | $7,674 | $5,000 | $12,906 | $2.56 | 4 years, 10 months |
| Oklahoma | $25,600 | $7,680 | N/A | $17,920 | $2.56 | 10 years, 5 months |
| Nevada | $25,700 | $7,710 | N/A | $17,990 | $2.57 | 11 years, 7 months |
| Utah | $26,200 | $7,860 | N/A | $18,340 | $2.62 | 18 years |
| Texas | $26,400 | $7,920 | N/A | $18,480 | $2.64 | 9 years, 6 months |
| Nebraska | $27,110 | $8,133 | N/A | $18,977 | $2.71 | 14 years, 1 months |
| Ohio | $27,500 | $8,250 | N/A | $19,250 | $2.75 | 13 years, 3 months |
| North Carolina | $27,800 | $8,340 | N/A | $19,460 | $2.78 | 13 years |
| South Carolina | $28,000 | $8,400 | $7,000* | $12,600 | $2.80 | 7 years, 1 month |
| Missouri | $28,200 | $8,460 | N/A | $19,740 | $2.82 | 13 years |
| Arkansas | $28,500 | $8,550 | N/A | $19,950 | $2.85 | 12 years, 5 months |
| Delaware | $28,500 | $8,550 | N/A | $19,950 | $2.85 | 12 years, 11 months |
| West Virginia | $28,500 | $8,550 | N/A | $19,950 | $2.85 | 11 years, 8 months |
| Kansas | $28,700 | $8,610 | N/A | $20,090 | $2.87 | 12 years, 11 months |
| Georgia | $29,500 | $8,850 | N/A | $20,650 | $2.95 | 11 years, 5 months |
| New Jersey | $30,000 | $9,000 | N/A | $21,000 | $3.00 | 15 years, 4 months |
| Idaho | $30,100 | $9,030 | N/A | $21,070 | $3.01 | 16 years, 10 months |
| Maryland | $30,100 | $9,030 | N/A | $21,070 | $3.01 | 12 years, 7 months |
| Virginia | $30,400 | $9,120 | N/A | $21,280 | $3.04 | 12 years, 3 months |
| Oregon | $30,500 | $9,150 | N/A | $21,350 | $3.05 | 16 years, 6 months |
| Pennsylvania | $30,500 | $9,150 | N/A | $21,350 | $3.05 | 13 years, 1 months |
| Washington | $30,500 | $9,150 | N/A | $21,350 | $3.05 | 17 years, 2 months |
| California | $30,600 | $9,180 | N/A | $21,420 | $3.06 | 12 years, 11 months |
| Louisiana | $31,500 | $9,450 | N/A | $22,050 | $3.15 | 11 years, 6 months |
| Illinois | $31,800 | $9,540 | N/A | $22,260 | $3.18 | 16 years, 5 months |
| Kentucky | $31,900 | $9,570 | N/A | $22,330 | $3.19 | 13 years, 2 months |
| Connecticut | $32,000 | $9,600 | N/A | $22,400 | $3.20 | 10 years, 7 months |
| Tennessee | $32,300 | $9,690 | N/A | $22,610 | $3.23 | 12 years, 11 months |
| New Mexico | $32,800 | $9,840 | $3,280 | $19,680 | $3.28 | 17 years, 12 months |
| Minnesota | $32,900 | $9,870 | N/A | $23,030 | $3.29 | 17 years, 5 months |
| Vermont | $33,000 | $9,900 | N/A | $23,100 | $3.30 | 17 years |
| Wisconsin | $33,400 | $10,020 | N/A | $23,380 | $3.34 | 18 years, 3 months |
| New York | $33,500 | $10,050 | $5,000 | $18,450 | $3.35 | 11 years, 9 months |
| Michigan | $33,700 | $10,110 | N/A | $23,590 | $3.37 | 16 years, 11 months |
| Colorado | $34,400 | $10,320 | N/A | $24,080 | $3.44 | 20 years, 5 months |
| Iowa | $34,900 | $10,470 | N/A | $24,430 | $3.49 | 17 years, 5 months |
| Massachusetts | $35,300 | $10,590 | $1,000 | $23,710 | $3.53 | 13 years, 2 months |
| Maine | $35,700 | $10,710 | N/A | $24,990 | $3.57 | 15 years, 11 months |
| Rhode Island | $36,100 | $10,830 | N/A | $25,270 | $3.61 | 15 years, 5 months |
| New Hampshire | $36,500 | $10,950 | N/A | $25,550 | $3.65 | 13 years, 5 months |
| Indiana | $36,600 | $10,980 | N/A | $25,620 | $3.66 | 15 years, 5 months |
Blue Raven Solar has one of the best reputations for reliability and trustworthiness. It has won awards for its team and CEO, and customer reviews report great customer service and prompt installations. The company also stands out for its in-house financing, which includes 18 months of free solar energy.
Out of all solar brands in the market, 6.5% of our survey respondents chose Blue Raven.
How We Scored Blue Raven Solar
Blue Raven received 4.4 out of 5 stars according to our rating system. The company scored the most points for its customer service reputation and warranty coverage. It also earned points for providing all standard solar panel services but lost some due to its limited financing options and lack of roof leak coverage.
- Solar Equipment and Services (18 out of 25 points): Blue Raven offers solar panel and battery installation, active monitoring services, and energy audits. However, it doesn’t offer solar roofs, EV chargers, or additional roofing services.
- Warranty and Performance Guarantees (22 out of 25 points): The company offers top-of-the-line warranties, including a 25-year workmanship warranty. The company earned points fo providing a performance guarantee, but its guarantee is shorter than many other providers. However, it doesn’t provide any roof leak coverage.
- Brand Reputation and Professional Certifications (13 out of 15 points): Blue Raven has high customer review ratings on its BBB profile and other popular review sites. The company uses in-house installers but doesn’t ensure they’re NABCEP-certified, which made it lose some points in this category.
- Financing Options (12 out of 15 points): Blue Raven offers some of the best in-house financing of the companies this list, but it limits this financing to solar loans. You may want to consider a different provider, such as Sunrun, if you’re looking for a lease or PPA.
- Industry Experience (7 out of 10 points): Blue Raven has less experience than other providers, with only 10 years in the industry.
- State Availability (7 out of 10 points): The company limits its service area to 19 states.
Warranty and Financing
Warranty
A Blue Raven system has a 25-year product warranty, a 10-year workmanship warranty, and a two-year production guarantee.
Financing Options
✔ Full purchase
✔ Loan
State Availability
Available in: Colorado, Florida, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nevada, North Carolina, Ohio, Oregon, South Carolina, Texas, Utah, Virginia, Washington
Reputation and Reviews
Blue Raven has won numerous awards from Comparably, a site known for its company culture and reputation reviews. It also ranked No. 20 on Glassdoor’s Best Place to Work in the USA in 2021.
Blue Raven is accredited by the BBB and currently holds an A+ rating. We noted that customers praised the knowledgeable staff and prompt installation but cited poor communication after completing projects. We analyzed several consumer reviews and found that some of these issues stem from the company’s financing department and third-party installers.
Read our review of Blue Raven Solar for more information.
Venture Solar specializes in installing systems that are perfectly symmetrical and have no visible wiring or mounting devices. This design provides a simple, stylish look tailored to your roof’s appearance. Additionally, Venture offers comprehensive financing options similar to Sunrun, making solar energy more accessible to homeowners.
How We Scored Venture Solar
Venture earned 4.2 out of 5 stars. It gained most of its points due to its flexible financing options paired with an in-house financing department. It also provides plenty of solar services to match most customers’ wants and needs, though it lost points for lacking roofing services, energy audits, and EV charger installations.
- Solar Equipment and Services (16 out of 25 points): Venture offers solar panel and battery installation with active monitoring. The company lost points in this category because it doesn’t provide EV chargers, solar roof installation services, energy audits, and roof repairs.
- Warranty and Performance Guarantees (25 out of 25 points): The company features excellent warranty perks with 25 years on labor, products, and performance. It also includes roof leak protection.
- Brand Reputation and Professional Certifications (13 out of 15 points): Venture has a great reputation. It features high ratings on its BBB profile with an accreditation and no active issues like lawsuits.
- Financing Options (14 out of 15 points): Venture provides financing options through an in-house financing team and works with every payment method except PPAs.
- Industry Experience (7 out of 10 points): The company holds only eight years of experience in the solar industry.
- State Availability (7 out of 10 points): Venture has a limited service area of only three states.
Pros and Cons
Pros
- Provides transparent information about its financing options online
- Includes remote monitoring
- Includes a 25-year roof and system warranty with all panel systems
Cons
- Requires your phone number to submit an online quote
- Reviews mention mixed experiences with customer support
- Doesn’t work with power purchase agreement
Warranty and Financing
Warranty
Venture offers a 25-year bumper-to-bumper warranty that covers workmanship, products, and power output.
Financing Options
✔ Full purchase
✔ Loan
✔ Lease
State Availability
Available in: Connecticut, Massachusetts, and New York.
Reputation and Reviews
Venture has an A+ rating and accreditation on its BBB profile. According to customer reviews, the company provides high-quality workmanship on its solar panel systems and good customer support. However, some customers have raised concerns about the pricing and quoting process. They found it confusing to determine the total cost of their system and experienced frequent back-and-forth over pricing.
Some customers also noted that Venture focuses on premium products, leading to higher pricing even when unnecessary. We found several Reddit threads discussing Venture where other solar customers and installers mentioned similar experiences.
Solar Energy World (SEW) is one of the most robust and well-regarded solar installation companies. It boasts several impressive features, such as its 30-year manufacturer’s warranty. Its service area is limited, and it doesn’t offer energy auditing services. We like that SEW discloses what solar panels it primarily works with and that the panels are from trusted, quality brands such as Qcells and Silfab.
Roughly 11% of our surveyed solar users purchased their system from Solar Energy World.
How We Scored Solar Energy World
SEW scored 4.4 out of 5 stars according to our methodology. The company received many points because of its warranty, which is longer than most other solar companies’ warranties. SEW offers a 30-year manufacturer’s warranty on all its solar panels and inverters, whereas many providers only offer 25-year warranties.
- Solar Equipment and Services (18 out of 25 points): The company is an ideal option for many basic solar products and services, such as solar panels and battery installation. It lost points because it doesn’t install EV chargers or perform energy audits.
- Warranty and Performance Guarantees (19 out of 25 points): SEW’s manufacturer and labor warranties are standout features, but the company doesn’t include any production guarantees with its work.
- Brand Reputation and Professional Certifications (15 out of 15 points): The company’s reputation is one of the best, with high BBB and Google Reviews ratings. We also found no active alerts or lawsuits.
- Financing Options (13.5 out of 15 points): SEW offers all possible solar payment options but doesn’t provide an in-house financing department.
- Industry Experience (8 out of 10 points): The company has been in business since 2009, so it received most of the points in this category.
- State Availability (6 out of 10 points): SEW limits its service area to eight East Coast states.
Pros and Cons
Pros
- Features an extensive solar product catalog with trusted brands
- Includes free active monitoring
- Hires NABCEP-certified installers and designers
Cons
- Reviews mention communication issues with staff
- Warranty coverage varies by solar panel brand
- Doesn’t offer a power production guarantee
Warranty and Financing
Warranty
SEW offers a 30-year manufacturer’s warranty on all purchased solar panels and inverters. However, coverage varies by brand, and the company doesn’t guarantee them with every panel option.
Financing Options
✔ Full purchase
✔ Loan
✔ Lease
✔ PPA
State Availability
Available in: Washington, D.C, Delaware, Florida, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, and Virginia
Reputation and Reviews
The company landed on Solar Power World’s 2023 Top Solar Contractors List in the No. 10 spot.
The BBB accredits SEW, and the company holds an A+ rating. Former customers praise the company for its professionalism, assistance with applying for financial incentives, and smooth installation process. However, some reported discrepancies in finances and scheduling.
- Payment options: Full purchase, loan, lease, PPA
- State availability: 20 states covered plus Puerto Rico and Washington, D.C.
Sunrun offers four financing options, including unique leasing options tailored for homeowners who don’t want system ownership. Prepaid and leased systems get a 25-year warranty that includes 25 years of system service and maintenance plus ongoing monitoring and theft insurance.
Pros and Cons
Pros
- Provides system monitoring that signals issues with your system
- Offers diverse financing options to suit various budgets
- Provides EV and solar battery solutions
Cons
- Requires added costs for the same coverage plans as leased and prepaid customers
- Solar and battery availability varies by state
Warranty and Financing
Sunrun backs its systems with a 10-year comprehensive warranty which includes product, roof penetration, and workmanship coverage.
Reputation and Reviews
The company earned DroneDeploy’s 2022 Guardian of Safety Award for incorporating drone technology in its site assessments. In 2021 and 2022, Sunrun was recognized by Comparably with 14 awards. Its accolades include Best CEOs for Diversity 2022, Best Company Culture 2021, and Best Company for Women two years in a row.
Sunrun currently holds an A+ rating with BBB and is accredited. Customers praised the comprehensive coverage for leased systems but complained about delayed installations, poor customer service, and poor communication with project managers.
Areas of Coverage
Available in: Arizona, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Wisconsin, Puerto Rico, and Washington, D.C.
Which Factors Impact Solar Panel Costs?
Below, we’ve broken down solar panel cost factors by importance. Some factors impact up-front cost, while others impact overall cost by influencing return on investment (ROI).
Primary Cost Factors
Solar panels’ cost is mainly based on the following factors:
- Household electrical demand: This is the monthly electricity your household uses. Homes with mostly gas appliances use less energy than homes with electric ones. You’ll need a larger system to match your needs if you have high monthly energy consumption.
- Panel quality: Your chosen equipment 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, but the cheapest option can sacrifice value. Here are some affordable solar panels we recommend.
- Panel type: Monocrystalline panels are typically more expensive than any other panel type.
- Purchasing options: Customers can pay in one lump sum, take out a loan, lease, or enter into 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 residential 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.
- Tax incentives: Federal and state solar incentives can dramatically reduce solar costs.
Additional Cost Considerations
Soft costs involved in solar panel installation include:
- Amount of sunlight: The more daily sunlight your home receives, the more significant your potential savings. Homeowners who 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 a higher cost of living, such as big cities. Different solar providers also charge different prices. Labor is included in your initial quote.
- 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 cost to your solar panel installation total.
- Roof condition and size: Your roof’s type, age, and condition impact what type and how many panels you need and their installation difficulty. Roofs with a layout or pitch that makes arranging your solar array difficult or dangerous will impact what system you can purchase and the risk involved for the installers. If your roof is particularly old or in bad condition, you should replace it before investing in solar panels.
- Solar batteries: Solar batteries store excess energy your system generates to use at night or during power outages. Your installer can advise you on how many solar batteries you need, if any, for the system size you purchase, but this is a hefty cost to keep in mind when budgeting your solar project.
From Our Expert
“Wiring to an existing circuit breaker box can be expensive depending on where your best bang for the buck is regarding sunlight and where your breaker box is in the house. If you have to go through concrete, multiple walls, floors, etc., it can increase the overall cost of the project.” — Keith Lambert (30-year veteran in the Pollution Control marketplace, working to reduce emissions for a cleaner environment. He’s president of Oxidizers, Inc., a company that provides industrial air quality solutions)
How Much Do Solar Batteries Cost?
A single solar battery for a 8kW system costs $7,964, per a national benchmark report from the National Renewable Energy Laboratory (NREL). This cost varies by state, battery brand and quality, your battery’s inverter, how much battery storage you need, and if you need to upgrade or add a new electric panel. Not every situation calls for a backup battery, but it can be helpful to provide around-the-clock power and protection from fluctuating electricity rates according to the Department of Energy. If you’re getting a solar battery simply as a backup energy source if the power grid goes down, you likely just need to purchase one. If you want to go completely off-grid, you could need as many as 10 to fully power your needs.
How Much Does Each Component Cost?
The National Renewable Energy Laboratory conducted a study of national solar energy price benchmarks for 2023. Using national averages, NREL calculated the typical cost of the components of a photovoltaic system, from panel to labor costs.
| Component | Percent of Total Price | Estimated Market Price* |
|---|---|---|
| Module | 12.61% | $3,273.25 |
| Inverter | 11.71% | $3,040.09 |
| Structural | 8.84% | $2,295.21 |
| Electrical | 12.4% | $3,219.05 |
| Field labor | 6.65% | $1,726.98 |
| Office labor | 25.94% | $6,734.07 |
| Other | 21.85% | $5,671.45 |
| Total: | 100% | $25,960 |
What Are My 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.
- 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.
- 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.
How Can I Save Money on Solar Panels?
We surveyed 1,000 homeowners who received solar quotes and found that 52% of respondents did not move forward with installation because the panels were too expensive. However, there are a few ways to save on solar panels, namely federal, state, and local solar incentives that can save you thousands of dollars.
Solar Incentives and Rebates
Various government programs help you lower the cost of going solar. The more homeowners who switch to solar energy, the less strain there is on the collective power grid. This means federal and state government agencies want to incentivize homeowners to switch to a more sustainable energy source.
Below are the most valuable solar rebates and tax credits to look into:
- 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 10-kW system priced at the national average of $31,460, you’d subtract $9,438 from your taxes. This reduces your system cost to $22,022.
- 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 in your state.
- Property tax exemptions: Since solar panels boost home value (as much as 4.1%, according to Zillow), they also increase your property taxes. These exemptions eliminate property taxes for a certain time frame 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 up-front costs.
- 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. SRECs are worth $300 or more in some areas. The average residential system may earn you several of these credits per year.
- State tax credits: Like the federal tax credit, homeowners receive a percentage of their total costs back to apply to their state taxes.
Additional Ways to Save
Making the wrong decisions during the buying process can cause you to overspend. Here’s what to look out for to avoid excess expenses.
- Be smart with financing: Your solar provider will offer at least a couple of financing options if not all four. Carefully review the math to determine which option makes the most financial sense for you long-term. Pay special attention to interest rates and contract terms. You may find a better loan option through your bank instead of through your installer.
- Choose the right system size: Review your average monthly energy costs from the past year to see what size system your home’s energy needs require. Go with a system that offers an energy production guarantee slightly above the amount of electricity you need. You may be tempted to buy a large system to ensure you have enough energy, but buying an excessively large system that generates more energy than you need isn’t financially sound. A solar battery, which stores excess energy your system produces, is likely a wiser investment.
- Choose the right system type: You’ll need to assess your roof, energy needs, and budget to determine if fewer monocrystalline panels or more polycrystalline panels will be cheaper.
- Get multiple quotes: Solar brands price their products and services differently. We recommend getting at least three quotes from well-rated solar installers to find the best deal.
- Install during the offseason: Installing solar panels isn’t comfortable, or necessarily safe, in extreme temperatures. If you can arrange installation during spring or fall, you may be able to negotiate a better price with the installer.
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 installation reduced their energy bills. Although solar panels are worth the investment for many people, there are situations when they won’t benefit your home enough to justify the expense.
Solar is a balancing act between a hefty up-front cost and estimated savings. Given the right circumstances, solar panels pay for themselves over time. The average payback period for a solar system is six to 10 years. If you have access to SRECs and net metering, you’ll break even during this time frame and then generate additional savings.
Here are some considerations to gauge if solar is worth it for you:
- 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 will benefit from going solar.
- Net Metering: Excess energy from your solar panel system 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. Check with your utility provider to see if it offers net metering.
- Solar Tax Breaks: Ask your solar installer which tax breaks they can help you obtain.
- Sun Exposure: Houses with many obstructions, such as tall trees or surrounding buildings, don’t get enough sun exposure for panels to perform. You won’t see much benefit from going solar unless your home’s roof regularly gets hours of unobstructed sun. It’s also best if the roof is south-facing and has a slope that can hold a solar panel at a 15- to 40-degree angle.
Our Solar Expert on Who Benefits
“If your home is located in an area with low solar access or if your home is shadowed by trees or buildings for much of the day, you probably won’t make back the investment on the electricity you generate. If you already consume low amounts of electricity (or if you consume a high amount), switching to solar might offer smaller savings, and so require a longer payback period.” — Mark McShane (a solar industry professional and entrepreneur. He owns Skills Training Group, a company focused on producing high-quality solar technicians. He also runs Solar Panel Quote Online, a site that provides impartial advice and information to homeowners and businesses considering installing solar)
How Long Does It Take to Break Even With Solar?
On average, most homeowners break even on their solar investment around eight years after installation. Determining your solar break-even point depends on a few numbers: the total system plus installation cost, any applied incentives, and your annual electricity bill savings. More expensive options, such as off-grid solar systems, are more expensive and take longer to break even.
Use the following steps to calculate your break-even point:
- Subtract the value of any applied incentives or rebates from your total solar power system plus installation cost. That’s your first number.
- Calculate 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 is $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 Downsides of Going Solar?
As with any other home improvement project, there are some hidden costs and downsides to solar energy not often discussed.
Solar’s biggest hidden cost is if you include solar batteries with your system, which often run 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 and its cost, many homeowners include it for backup power protection. If you decide to include one in you solar system, consider one of our favorite solar batteries.
Here are some other hidden fees and downsides to consider:
- 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.
- Maintenance: Your solar panels will require maintenance to keep them in good working order. Most installers recommend having panels checked about every five years. You’ll need a professional to inspect wires and connections. 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, but if you live in an area prone to wildfires or dust, you will need the occasional cleaning. We recommend hiring a pro to avoid the dangers of climbing on your roof. Your solar panel installer may include this service in your labor warranty agreement. If not, expect to pay around $20 per panel for cleaning.
- Repairs: Solar panels are durable, but there are some occasions when they require repair work. You must pay out of pocket if the panels aren’t covered by insurance.
- 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 fewer than five years away from needing replacement, you may need to install an entirely new roof before installing solar panels. Alternatively, a solar installer might suggest simply fortifying your roof’s eaves. We suggest contacting a local roofing company for an in-depth roof replacement inspection and receiving a quote for the cost of replacing your roof.
- State policies: Not all states are solar-friendly. Some have far fewer incentive programs to help save, and some have policies that inhibit programs currently in place. For example, the California Public Utilities Commission revised its net metering policy to decrease the value of solar energy credits by 75%, pushing solar owners to invest in solar batteries.
- System monitoring: If you use a solar company’s active monitoring, there’s sometimes a monthly $10–$15 fee.
- Tree removal: If surrounding trees cast shadows on your panels, you may need tree removal services to ensure optimal panel performance. Tree removal services cost between $341 and $1,523 on average.
- 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.
Our Solar Expert on Hidden Costs
“Solar panels, battery backup systems, etc. require routine maintenance. Solar panels need to have clean, clear paths for light. Tree limbs, leaves, sap droppings, dirt, and grime can all harm how much power you can draw from the sun. Being on top of [maintaining] the system [and its surroundings] is key to maximizing your savings and ROI.” – Keith Lambert
Experts Insights
We consulted additional experts for insight into the benefits of solar energy, the affordability of solar panels, and advancements in solar technology. See their insights below.
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 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 equipment quality, customer reviews, financing options, warranties, and pricing.
FAQ About Solar Panel Costs
How much is a solar system for a 2,000-square-foot house?
A 2,000-square-foot house will likely require a 10-kW solar panel system, costing an average price of $29,410.
What is the cost of one solar panel?
A typical solar panel costs between $200 and $315, but price is impacted by panel quality, brand, type, and size.
Do you really save money with solar panels?
According to EnergySage, a household with an average monthly energy bill of $150 can expect roughly $20,166 in electricity savings over 10 years. The higher your monthly energy bill, the more savings you stand to accrue over time.
How many solar panels does it take to run a house?
The average house in the U.S. requires a 10-kW system to power it, or roughly 24 solar panels.
Our Rating Methodology
We are 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.
To share feedback or ask a question about this article, send a note to our team at reviews@thisoldhousereviews.com.
