How Much Do Solar Panels Cost in 2025?
Typical cost range:
$13,549–$25,974
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While the upfront costs may seem daunting, understanding the full picture of solar panel installation can help you make an informed decision. After federal tax credits, a complete solar panel system for a typical 2,000-square-foot home can cost around $13,549–$25,974.* This price range accounts for a 10-kilowatt (kW) system, which we found to be the most common system size in our solar survey.
However, your actual cost depends on several factors, such as the type of panels you choose, your roof’s layout, and even your home’s location. While the upfront investment can be high, solar panels reduce or even eliminate your electricity bills. In this guide, we break down all the costs involved in solar installation and explore available incentives to help you understand your potential return on investment.
*Cost information is based on 2024 EnergySage reports and our 2025 survey of 1,000 residential solar customers.
Compare Solar Companies
We’ve researched the best solar companies in the country to determine which offer the best pricing for high-quality, high-efficiency solar panels. SunPower tops our list with some of the best-performing solar panels and most robust warranties. Both of these factors play a major part in our rating methodology. Learn more about our top picks for solar installation in the table below.
Company | Logo | Star Rating | BBB Rating | Warranties | Link |
---|---|---|---|---|---|
Blue Raven SolarGet Quote | A+ | 25-year panels, 10-year workmanship | Get Quote | ||
Venture SolarRead Our Review | A+ | 25 years | Read Our Review | ||
Solar Energy WorldRead Our Review | A+ | 25–30 years | Read Our Review | ||
SunrunGet Quote | A+ | 25-year panels, 10-year workmanship | Get Quote |
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.
What Is the Average Cost of Solar Panels?
The average cost of a residential solar panel system ranges from $13,549–$25,974 after federal tax credits, with most homeowners paying around $16,129.* These figures are based on current market rates for 10 kW systems, which are typical for 2,000-square-foot homes. System costs vary significantly based on location. States like California and New York see higher installation costs due to labor rates and building codes, while states like Texas and Florida tend to have lower costs.
*Cost information is based on 2024 EnergySage reports and our 2025 survey of 1,000 residential solar customers.
How Much Do Solar Panels Cost by Type?
There are three main types of solar panels, each offering different efficiency levels and price points to match varying energy needs and budgets. Monocrystalline panels are more expensive due to their higher efficiency and sleek appearance, while polycrystalline panels are a more budget-friendly option with slightly lower efficiency. Thin-film panels, though less common in residential installations, provide unique advantages for specific applications where traditional panels aren’t practical.
- Monocrystalline solar panels: These 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.
- Polycrystalline solar panels: 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 solar panels: Though less efficient (10%–13%) than crystalline options, thin-film panels excel in high-temperature conditions and flexible installation scenarios. Their lower material costs are offset by the need for more extensive roof space to achieve equivalent power output.
How Much Do Solar Panels Cost by Home Size?
Your home’s square footage influences solar system costs because larger homes typically consume more electricity for heating, cooling, and powering additional living spaces. However, the correlation isn’t always direct. Factors such as your local climate, insulation, and routine energy usage play huge roles in determining your optimal system size. A well-insulated 2,500-square-foot home in a moderate climate might actually require a smaller system than a poorly insulated 1,500-square-foot home in an extreme climate.
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 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 but 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 |
Which Factors Impact Solar Panel Costs?
Several factors influence the final price of your solar panel installation, with equipment selection and installation requirements typically having the biggest impact on your bottom line. Understanding both major and minor cost factors can help you better plan your solar investment and potentially identify areas for savings.
Primary Cost Factors
The most significant elements affecting your solar installation costs account for roughly 70%–80% of your total investment. These fundamental factors will shape the basic framework of your system’s cost:
- Annual energy usage: Your household’s electricity consumption patterns determine the system size needed, directly affecting equipment and installation costs. A home using 12,000 kilowatt-hours (kWh) annually typically requires a larger, more expensive system than one using 8,000 kWh.
- Equipment selection: Panel type, inverter quality, and mounting system choices can swing costs by $5,000 or more. Premium monocrystalline panels with microinverters cost significantly more than a basic polycrystalline system with a string inverter but may deliver better long-term value.
- Installation requirements: Roof condition, angle, and accessibility impact labor costs and equipment needs. Complex installations, such as ground mounts or reinforced roofing, can increase your project’s cost.
- Location: Your geographic location influences not only available sunlight but also labor costs, permit fees, and available incentives. The same system could cost $5,000 more in Massachusetts than in Texas due to these regional variations.
Additional Cost Considerations
While these factors typically have a smaller impact on your total cost, they can still affect your budget and should be factored into your planning:
- HOA requirements: Some homeowners associations require specific equipment or installation methods that can increase costs.
- Insurance adjustments: Adding solar panels may increase your home insurance premiums, though the panels are typically covered under existing policies.
- Monitoring systems: Advanced monitoring equipment and software can increase your system’s overall cost but provide valuable insights into system performance.
- Permit fees: Local permitting and inspection fees vary significantly by jurisdiction, but they will add to your overall cost.
- Tree removal: Removing shade-causing trees adds to your project costs.
How Much Do Solar Batteries Cost?
A single solar battery typically costs between $6,000 and $13,000, or $600–$1,000 per kWh, 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.
*Cost figures are based on reports from NREL and HomeGuide.
Insights From Our Solar 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)
What Are My Solar Panel Payment Options?
Choosing the right payment option for your solar panel system can significantly impact both your immediate costs and long-term savings. Each financing method offers distinct advantages and potential drawbacks that should be carefully weighed against your financial goals and circumstances.
- Cash purchase: A full upfront payment offers the highest long-term returns. While requiring substantial capital, you’ll own the system outright and avoid interest charges. This option is ideal for homeowners with available funds who want to maximize their investment returns and simplify the ownership process.
- Solar loan: Solar-specific loans require little to no money down and offer terms of five to 20 years. While these loans make solar accessible, they add interest charges over the loan term. This solar financing method suits homeowners who want to go solar with minimal upfront costs and don’t mind paying some interest for the convenience.
- Solar lease/power purchase agreement (PPA): These zero-down options eliminate upfront costs and maintenance responsibilities. While this offers immediate electric bill savings, you won’t own the system or qualify for tax incentives, and long-term savings are significantly lower than ownership options. This choice best serves those who prioritize immediate savings over long-term returns and prefer not to handle system maintenance.
How Can I Save Money on Solar Panels?
A combination of federal, state, and local solar incentives can reduce total costs by 40%–70%. While the 30% federal tax credit provides significant savings through 2032, state-specific programs offer additional opportunities to maximize return on investment. Strategic timing and equipment choices can further reduce costs without compromising system quality.
Solar Incentives and Rebates
One of the most popular methods to save money on solar panels is through solar tax incentives and rebates. Learn more about these options below.
- Federal solar tax credit: The federal solar tax credit offers 30% savings on your total system cost through 2032, including both equipment and installation expenses. This incentive applies without a maximum limit, though you must have sufficient tax liability to claim it. Unused credits can roll over to future tax years, providing flexibility in how you capture these savings.
- State-level incentives: Most states provide tax credits, but the amount varies by location. Property tax exemptions in 36 states prevent your home’s assessed value from increasing due to solar installation. In states with Solar Renewable Energy Certificates (SREC), you can earn credit per megawatt-hour of production. This is done through net metering programs, which your state or local utility provider may provide.
- Local and utility programs: Local utilities often offer installation rebates. Community solar initiatives can reduce costs by 15%–20% through group purchasing power. Many local governments also partner with financial institutions to offer solar-specific loans with reduced interest rates between 2% and 5%.
Additional Ways to Save
Although tax incentives are one of the most significant ways to save, here are a few other tips for getting a better price and saving.
- Equipment selection: Choosing polycrystalline panels over monocrystalline can save you money while maintaining good efficiency levels. Standard mounting equipment offers savings compared to premium options, while string inverters can reduce costs compared to microinverters for simple roof layouts.
- Installation timing and process: Winter installations can typically save you money due to reduced demand. Bundling solar installation with needed roof repairs can reduce overall costs through shared labor and equipment. Getting three to five competitive quotes will yield pricing variations, and handling permit paperwork yourself can save you money in administrative fees.
- System design and long-term savings: Designing your system to match actual usage prevents overspending on unnecessary capacity. Time-of-use utility plans combined with strategic panel orientation can maximize savings, while regular maintenance ensures optimal performance. Consider making energy efficiency improvements before sizing your system to reduce the required capacity and overall costs.
Are Solar Panels Worth It?
For most homeowners, solar panels prove to be a worthwhile long-term investment that delivers both financial and environmental benefits. When you factor in the 30% federal tax credit, state incentives, and current electricity rates averaging 17 cents per kWh nationwide, a typical solar installation can save $25,000–$45,000 over its 25-year lifespan.* However, this value proposition becomes even stronger if you live in an area with high electricity rates (like California at 30 cents per kWh), receive significant sun exposure, or consume more than 900 kWh per month.
*Cost data is based on reports from the U.S. Energy Information Administration.
Solar panels deliver several key benefits that contribute to their overall value:
- Energy independence: By generating your own electricity, you’re protected from rising utility rates. This independence becomes especially valuable during peak rate periods or energy shortages.
- Environmental impact: A typical residential solar system eliminates 3-4 tons of carbon emissions annually, equivalent to planting 100 trees each year. This reduction helps combat climate change while improving local air quality.
- Home value increase: Solar panels typically raise property values by 4%–6%, with a median increase of $15,000 for middle-priced homes. Unlike many home improvements, solar installations often retain their value well over time.
- Reliable performance: Modern solar panels come with 25-year warranties and typically maintain 85% or more of their original efficiency after 25 years, providing predictable energy production for decades.
However, solar panels might not be the best investment if you have heavy shade coverage, plan to move within five years, need roof replacement soon, or live in an area with electricity rates below 10 cents per kWh. Additionally, homes with very low electricity usage (under 500 kWh monthly) may take longer to recoup their investment.
Advice From Our Solar Expert
- “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?
The average solar payback period ranges from six to 10 years, with most homeowners breaking even in about seven and a half years. However, this timeline varies significantly based on your location, electricity rates, and available incentives. For example, homeowners in Hawaii or California often see payback periods as short as four to six years due to high electricity rates, while those in states with lower rates might need eight to 12 years to break even.
To calculate your specific break-even point, add up your total costs (including installation, equipment, and any loan interest) and subtract all incentives and tax credits. Then, divide this net cost by your annual energy savings (your current electricity bill multiplied by 12, adjusted for any expected utility rate increases).
For instance, if your net system cost is $15,000 and you save $2,000 annually on electricity, you would divide 15,000 by 2,000 for a payback period of seven and a half years. Remember to factor in potential electricity rate increases, which can actually shorten your payback period as utility costs rise.
What Are the Hidden Costs and Downsides of Going Solar?
While solar panels offer significant long-term benefits, several often-overlooked costs and considerations can impact your overall investment. Beyond the advertised installation price, homeowners should prepare for additional expenses throughout their system’s lifetime and understand certain limitations that might affect their solar experience. Understanding these hidden factors helps set realistic expectations and allows for better financial planning.
The most significant hidden costs and potential drawbacks include:
- Annual maintenance: Professional panel cleaning and inspection services are needed once or twice per year to maintain optimal performance. While panels are generally low-maintenance, neglecting this routine care can reduce efficiency over time.
- Roof repairs: If your roof needs maintenance after solar installation, removing and reinstalling panels adds to typical roof repair costs. Some installers recommend preventative roof maintenance before installation.
- Home insurance: Adding solar panels increases home insurance premiums, though the exact amount varies by provider and coverage level. Some insurers may require specific coverage riders for solar equipment.
- HOAs and permitting: In addition to basic permit fees, some homeowners face unexpected costs when meeting HOA requirements or local building codes. These requirements might include specialized mounting hardware, screening materials, or system modifications.
- Inverter replacement: Most string inverters need to be replaced after 10–15 years. While this expense is predictable, it’s often overlooked in initial cost calculations. Microinverters last longer but cost more upfront.
- Monitoring fees: While many monitoring systems are free initially, some require annual subscriptions after the first few years to maintain advanced monitoring capabilities and smartphone app access.
- Utility connection: Some utility companies charge additional fees for grid interconnection or require system upgrades to accommodate solar installations.
- Winter performance: Snow removal services might be necessary in colder climates. Additionally, reduced winter sunlight can lower system production during these months, affecting your overall return on investment calculations.
Advice from 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
Expert 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.
How We Evaluated Solar Panel Installation Companies
We ranked the top solar energy system installation companies on their service options, performance guarantees, certifications, and experience. We make sure every company offers at least high-quality monocrystalline solar panel installation and backup battery storage options.
Our Rating System
To determine the best of the best in residential solar energy, we’ve developed a rigorous methodology that helps us analyze providers on significant service options to the most minute details of warranty coverage. We assess each company in six key areas.
Here’s a breakdown of our solar panel installer methodology:
- Solar equipment and services: We review each provider’s service catalog to determine which residential solar services they offer and whether they offer helpful additional services, such as a dedicated app or web portal, energy audits, monitoring services, and roofing services. These services help speed up and maintain solar panel installation. We also investigate whether a provider uses in-house installation crews or outsources to a third-party company.
- Warranty and performance guarantees: We evaluate each company’s warranty coverage and guarantees to make sure you receive adequate coverage and protection for factory malfunctions or improper installation issues. Companies that offer 25 years or more on workmanship and performance receive the most points, while companies that include a production guarantee or roof-leak coverage receive additional points.
- Brand reputation and professional certifications: We check each provider on the Better Business Bureau (BBB) and analyze hundreds of its most recent customer reviews for realistic insight into what it’s like to work with that company. Additionally, we check for ongoing lawsuits or company alerts and whether the company holds NABCEP (North American Board of Certified Energy Practitioners) certification.
- Financing options: We review each company’s payment and financing options. The more payment methods a company offers, the more points it receives. However, we award fewer points to leasing and PPAs, as we find them less desirable for long-term cost-effectiveness. We also give additional points if the company provides in-house financing rather than relying on you to find a third-party lender.
- Industry experience: The longer a company has been in the residential solar industry, the more points it receives.
- State availability: We check each provider’s service area. The more states it offers solar panel and battery installation in, the more points it receives.
To share feedback or ask a question about this article, send a note to our team at reviews@thisoldhousereviews.com.