Understanding solar panel costs is a key step in deciding whether solar is the right investment for your home or business. Based on our 2025 survey of 1,000 solar customers, the national average price for a single solar panel professionally installed is $1,200. This means most full-size systems of between 20 and 30 panels cost between $24,000 and $36,000.
In this guide, we break down everything you need to know, from the average cost of solar panels and installation to the factors that affect pricing and potential savings over time. Whether you’re just starting your research or ready to compare quotes from the best solar companies, this guide will help you make an informed, confident decision about going solar.
Key Takeaways
- Local and state incentives can reduce your total costs beyond the federal tax credit. Some states offer additional rebates of up to $5,000 for residential installations.
- Financing options such as solar loans typically charge $3,000–$8,000 in interest over the loan’s life, but monthly payments are often lower than current electricity bills.
- While premium panels cost more upfront, they generally yield better long-term value through higher efficiency ratings and longer warranties.
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Blue Raven Solar tops our list of the best solar companies thanks to its top-performing solar panels and competitive pricing. Learn more about our top picks for solar installation in the table below.
Company | Star Rating | BBB Rating | Warranties |
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A+ | 25-year panels, 10-year workmanship | ||
A+ | 25 years | ||
A+ | 25–30 years | ||
A+ | 25-year panels, 10-year workmanship |
What Is the Average Cost of Solar Panels?
On average, residential solar installations range from $24,000–$36,000 after applying federal tax credits. A 15,900 kWh system of 18–34 panels for a standard three-bedroom home costs an average of $24,222, according to our survey.
However, solar costs can vary widely depending on where you live. For instance, states like California and New York often have higher prices due to labor rates and stricter building codes, while states such as Texas and Florida tend to offer more affordable installation options. Understanding these regional differences can help you better estimate your potential investment.
Key Factors Influencing Solar Panel Installation Costs
The cost of going solar can vary widely from home to home because several key factors come into play. Understanding what affects solar panel installation costs will help you get the most accurate estimate for your property and potentially save you thousands in the process.
Type of Panel
The type of solar panel you choose significantly impacts both cost and performance. There are three main types used in residential systems:
- Monocrystalline: Monocrystalline solar panels are made from single-crystal silicon. They offer the highest efficiency rates, around 15%–22%, and the longest lifespan. Their higher cost reflects their superior performance and smaller footprint needed to generate the same amount of power. They’re great for homes with limited roof space.
- Polycrystalline: Polycrystalline solar panels are made from multiple silicon crystals. These panels provide solid performance at a more accessible price point. Their efficiency ranges from 13%–17%, making them a popular choice for homeowners seeking a balance between cost and output.
- Thin-film: Thin-film panels are lightweight and versatile but less efficient. They’re typically used in large-scale or specialty applications.
For example, a 6 kW monocrystalline system may cost around $1,000–$2,000 more than a polycrystalline system but could generate more power in a smaller footprint.
Home Size
Larger homes usually require more power, which means larger systems and higher costs. Roof space, shape, and orientation also matter.
Home/System Size | Number of Panels | Average Cost* |
---|---|---|
1 Bedroom (4,800 kWh) | 5–12 panels | $14,319 |
2 Bedrooms (8,400 kWh) | 10–18 panels | $15,866 |
3 Bedrooms (15,900 kWh) | 18–34 panels | $24,222 |
4 Bedrooms (22,080 kWh) | 35–46 panels | $26,500 |
Annual Energy Usage
Your current electricity consumption plays a big role in determining your system size. The more energy you use, the larger and more expensive your solar setup will need to be.
- Low usage (<8,000 kWh/year): May need a 5–6 kW system
- Average usage (8,000–12,000 kWh/year): Often requires a 7–10 kW system
- High usage (>12,000 kWh/year): May require a 10–12 kW+ system
Review your utility bills from the past 12 months to determine your average kWh usage.
Equipment Selection
While solar panels are the star of the show, the supporting equipment, like inverters, racking systems, and monitoring technology, plays a major role in your system’s performance, longevity, and overall cost. Choosing the right components can increase energy output, reduce maintenance needs, and improve your long-term savings.
Inverters convert solar energy into usable electricity. You’ll typically choose from these types:
- String inverters: These are the most affordable, but system-wide performance can drop if one panel is shaded.
- Microinverters: These are installed on each panel and are ideal for roofs with shade or complex layouts, but they’re more expensive.
- Power optimizers: Optimizers work with string inverters to improve individual panel performance and are mid-range in cost.
Other important components include the following:
- Mounting systems: Standard roof mounts are cost-effective, but custom or ground mounts add hundreds of dollars.
- Monitoring tech: Basic systems track overall performance, but advanced options offer real-time, panel-level data.
- Premium equipment: This comes with higher upfront costs but longer warranties (10–25 years), better efficiency, and durability.
Installation Requirements
Every roof is unique, and that can have a big impact on the overall cost of your solar panel installation. More complex roof types often require additional labor, specialized hardware, or structural adjustments, all of which can drive up costs. For example, tile or metal roofs may need extra mounting equipment to install the panels safely and securely.
The pitch and layout of your roof also play a role. Steep slopes or multi-level designs can make installations more time-consuming and labor-intensive. In some cases, especially with older homes, structural reinforcements or electrical upgrades may be necessary to ensure the roof can support the system safely.
Location and Local Incentives
Your location plays a big role in determining how much you’ll pay when going solar. In general, urban areas tend to have higher labor and permitting costs due to stricter building codes, higher wages, and more complex utility interconnection processes. In contrast, rural areas may offer lower installation costs, but they can sometimes lack access to experienced installers or streamlined permitting, which could delay the process.
In addition to cost differences, where you live also affects the availability and value of solar incentives. States like California, New York, and Massachusetts offer strong incentives but also come with higher overall installation costs. Meanwhile, Texas, Florida, and Arizona tend to have lower costs and growing solar markets, though incentives may vary.
Homeowners should also look into local programs such as state tax credits, utility rebates, net metering policies, and Solar Renewable Energy Certificates (SRECs), which can significantly boost savings. To learn what’s available in your area, check out the DSIRE database, a free, comprehensive resource for solar incentives by state.
Solar Batteries
A single solar battery typically costs, on average, $5,097, depending on capacity, type, and brand.* For whole-house backup systems with more than 25 kWh capacity, costs can exceed $25,000, not including installation.
The price varies significantly based on storage capacity and brand. Popular options like the Tesla Powerwall cost around $11,500 with installation, while premium systems like the Enphase IQ Battery can cost upward of $11,000 before installation costs.
While batteries add substantially to your initial investment, they can provide valuable backup power during outages and help maximize your solar system’s efficiency by storing excess energy for use during peak rate periods or nighttime hours.
*Based on our 2025 survey of 1,000 home solar customers, which included 279 solar battery customers.
Additional Cost Considerations
In addition to the major cost drivers of a solar installation, several smaller expenses can still affect your overall budget. These may not be deal-breakers, but it’s important to account for them early in the planning process.
- Advanced monitoring systems: Upgrading from basic monitoring to advanced, panel-level monitoring will add to your upfront costs, but it allows you to track performance, detect issues early, and optimize energy production.
- HOA requirements: If you live in a community with a homeowners association, you may need to meet specific aesthetic or placement guidelines. This could require custom panel layouts or additional screening, which would add to your project costs.
- Home insurance adjustments: Adding solar panels may slightly increase your insurance premium, depending on your provider and system size. However, most policies cover solar panels as part of the home’s structure.
- Permit and inspection fees: Local governments charge permitting and inspection fees that vary widely by location. These can range from $100 in smaller towns to over $1,000 in larger cities with more complex regulations.
- Tree removal or trimming: Shading can significantly reduce solar efficiency. If trees block sunlight from reaching your roof, professional removal or trimming services can add to your total costs, depending on the size and number of trees.
How Much Do Solar Panels Cost by State?
Solar panel costs can vary dramatically by state due to several key factors: local labor and permitting costs, state-specific incentives and regulations, and varying levels of market competition among installers. These differences lead to price swings, with northeastern states like Massachusetts and New York typically seeing higher installation costs and southern states like Texas and Florida seeing lower rates.
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 |
Financing Options for Solar Panels
Solar panels are a long-term investment, and the good news is you don’t have to pay for everything upfront. There are several flexible financing options available to help homeowners make the switch to solar without breaking the bank. Choosing the right solar financing method can significantly impact your overall savings and return on investment.
- Cash purchase: Paying upfront in full gives you complete ownership of the system and the highest long-term savings. You’ll qualify for all tax credits and incentives, and you won’t pay interest or monthly fees. However, it requires a significant upfront investment.
- Solar loans: A solar loan lets you spread the cost over time while still owning the system and benefiting from tax incentives. Monthly payments are usually fixed, and many loans require little to no money down. Keep in mind that interest charges may reduce your overall savings.
- Solar leases: With a solar lease, you rent the solar system for a set monthly fee, usually with little or no upfront cost. The installer owns and maintains the system, and you benefit from lower utility bills. However, you won’t own the system or qualify for tax credits, and long-term savings are typically lower.
- Power purchase agreements (PPAs): PPAs allow you to pay only for the electricity the system generates, often at a rate cheaper than your local utility. Like leases, there’s little to no upfront cost and no maintenance responsibility, but you don’t own the system, and contracts can last 20 years or more.
Return on Investment and Payback Period
One of the most common questions homeowners have is: When will my solar panels pay for themselves? While the exact timeline varies based on factors like system cost, energy usage, local utility rates, and available incentives, most homeowners see a payback period of 6–10 years. Over a 25-year system lifespan, that can translate to total savings of $15,000–$40,000 or more, especially in areas with high electricity costs and strong local incentives.
Several factors can accelerate your solar payback period, including high local utility rates, south-facing roofs with minimal shading, and low- or no-interest financing options. For example, a California homeowner who installs a $20,000 solar system and takes advantage of the 30% federal tax credit would reduce their net cost to $14,000. With average annual savings of around $1,800 on electricity, that system would pay for itself in less than eight years and continue generating free power for many more.
Financing Option | Ownership | Upfront Cost | Eligible for Incentives | Long-Term Savings |
---|---|---|---|---|
Cash Purchase | Yes | High | Yes | Highest |
Solar Loan | Yes | Low/None | Yes | High |
Solar Lease | No | Low/None | No | Moderate |
PPA | No | Low/None | No | Moderate |
How Can I Save Money on Solar Panels?
Going solar is a smart financial move, but it’s even smarter when you know how to maximize your savings. From federal tax credits to local rebates and smart shopping strategies, there are several ways homeowners can cut costs and get the best return on their solar investment.
Solar Incentives and Rebates
One of the most effective ways to reduce your upfront cost is by taking advantage of solar incentives at the federal, state, and local levels.
- Federal solar tax credit (ITC): This is the most valuable incentive available. It allows you to deduct 30% of your total solar installation cost from your federal income taxes. For example, if your system costs $18,000, you could claim a $5,400 credit, bringing your net cost down to $12,600.
- State and local incentives: Many states and municipalities offer additional rebates, property tax exemptions, or solar renewable energy credits (SRECs). For example, New York offers up to $5,000 in state tax credits, and some cities in California provide additional cash-back rebates.
- Net metering: This billing arrangement allows you to earn credits for excess electricity your system sends back to the grid. Those credits can offset your electricity use at night or during cloudy days, lowering your monthly utility bill.
Additional Ways To Save
Beyond incentives, there are smart strategies that can help you save even more on your solar panel installation.
- Bundle with other upgrades: Some homeowners save money by combining solar with other home improvements like a new roof or energy-efficient upgrades, which may qualify for additional rebates.
- Choose the right system size: Bigger isn’t always better. An oversized system can lead to unnecessary costs. A professional installer can help you match system size to your actual energy needs.
- Compare multiple quotes: Always get at least three estimates from reputable installers. Prices can vary by thousands of dollars for the same system size, depending on the company and equipment used.
- Use solar loans wisely: If you’re financing, look for solar-specific loans with low interest rates and no prepayment penalties. The lower the interest, the more you save over time.
- Time your purchase: Solar installation costs tend to fluctuate throughout the year. Off-season months (like winter in many regions) can sometimes come with discounts or promotional offers.
Are Solar Panels Worth It?
For most homeowners, solar panels are worth it. Thanks to the 30% federal tax credit, state and local incentives, and rising electricity rates (currently averaging 15.95 cents per kWh nationwide), solar systems can save you around $42,376 over 25 years.*
If you live in a high-cost electricity state like California, where rates can top 30 cents per kWh, the financial benefits grow even stronger, especially if your household uses more than 900 kWh per month or enjoys consistent sun exposure.
But solar offers more than just savings. It provides real, lasting value in several key ways:
- Energy independence: By producing your own electricity, you’re less affected by utility rate hikes and peak pricing. This is especially useful during energy shortages or high-demand seasons.
- Environmental benefits: A typical residential solar system reduces carbon emissions by 3–4 tons per year, which is like planting 100 trees annually. That’s a meaningful contribution to cleaner air and a healthier planet.
- Increased home value: Studies show homes with solar panels typically sell for 4% to 6% more, adding around $15,000 in value for the average U.S. home. Unlike other upgrades, solar tends to retain its value well over time.
- Reliable performance: Most panels come with 25-year warranties and still produce 85% or more of their original power output after two decades, giving you consistent returns year after year.
That said, solar isn’t right for everyone. It may not be the best fit if your roof is heavily shaded or needs replacement soon or if you plan to move within five years. Also, homes in areas with very low electricity rates or with minimal energy usage may see slower payback periods.
Still, for the vast majority of homeowners, the financial and environmental payoff makes solar well worth the cost and a solid investment in your home’s future.
*Cost data is based on reports from the U.S. Energy Information Administration and uses the consumption of 10,632 kWh per year to calculate the savings.
Survey Insights from Solar Customers
In 2025, we surveyed 1,000 home solar customers across the U.S. to understand their experience shopping for and installing solar panel systems. Most homeowners said they paid around $16,129 for a solar panel system, with an average of 14 solar panels installed.
While Sunrun was the most popular provider in our survey, many respondents reported choosing a local or regional installer rather than a large, national company. Additionally, 53% of respondents claimed they wanted solar panels to reduce power bills, and most reported an average decrease of $14 per panel, translating to $196 saved on monthly utility costs.
What Are the Hidden Costs and Downsides of Going Solar?
While solar panels offer great long-term savings and environmental benefits, it’s important to understand the less visible costs and considerations that can affect your overall investment. These aren’t deal-breakers for most homeowners, but knowing about them upfront helps you plan more effectively and avoid surprises down the road.
Here are some common hidden costs and potential drawbacks to keep in mind:
- Insurance adjustments: Adding solar may increase your homeowners insurance premiums slightly, depending on your provider. Some insurers might also require you to add a rider to cover the solar equipment fully.
- Maintenance needs: Solar panels are low-maintenance, but occasional professional cleaning and inspections, usually once or twice a year, can help maintain peak efficiency. Skipping this care may lead to gradual performance loss over time.
- Permits and HOA requirements: Beyond standard permit fees, HOAs or local code requirements may call for additional costs, like custom mounting, visual screening, or system changes to meet aesthetic or structural guidelines.
- Roof repairs: If you need to repair or replace your roof after the panels are installed, the panels must be removed and reinstalled, adding anywhere from $1,000 to $3,000+ to your roofing project. That’s why many installers recommend addressing any roofing issues before going solar.
Expert Insights
“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.
McShane is 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.
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.




