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Home / Solar
By Alora Bopray, Roxanne Downer and Emily Mcnu*tt, CNN Underscored
Published 8:48 AM EDT, Fri May 24, 2024
What's in this guide
- Average cost of solar panels
- Solar panel cost by state
- Cost by type of solar panel
- Cost by solar system
- What impacts solar panel installation costs?
- How can I pay for solar panels?
- Solar incentives
- Are solar panels worth it?
- Bottom line
- Frequently asked questions (FAQs)
With electricity costs rising, you, like many homeowners, may be looking for ways to save on your monthly bills. Solar panels offer a sustainable way to generate energy for your home, but they come at a price.
Let’s explore what goes into the cost of solar panels and installation so that when you get an estimate from a reputable solar installer, the sticker will be less shocking.
Key takeaways
The average cost of solar panels is between $13,620 and $26,686.
The average cost per watt is $2.82 in the United States.
The cost of your system depends on the size, type of panel, labor costs, location and more.
Over the lifetime of your solar panel system, you stand to save an average of $14,000 to $27,000 on energy costs.
Average cost of solar panels
You can expect to pay between $13,620 and $26,686 for your entire solar panel system, on average, before any rebates are applied. This cost includes the panels for a 6-kilowatt (kW) solar system and the labor costs to install them.
Although 6 kW is often enough to offset the power the average U.S. household uses, the size — and, thus, the cost — of your solar system may vary. That said, the total cost of your solar panels will depend on several factors, namely the system size, location and the type of solar panel.
| Average solar system cost (6kW system) | |
|---|---|
| Low cost | $13,620 |
| Average cost | $19,026 |
| High cost | $26,686 |
Calculations include the cost of panels and labor for a 6 kW solar system. They don’t include solar batteries or additional components.
Solar panel cost by state
The national average cost for solar panels is about $2.82 per watt or $19,026 for a 6 kW solar system. However, your location impacts the cost of labor and the availability of solar equipment, which can influence the cost of your solar project.
While these prices may seem high, solar costs have decreased significantly in the past 50 years. Chris Stevenson, a professional roofer with more than 15 years of experience, has seen the growing popularity of solar panels and explains it’s likely due to “technological advancements, government incentives and increased competition” among solar manufacturing companies.
Solar panel manufacturing has become much more streamlined, making them more affordable to build. “Despite the recent increase in the cost of solar panels due to supply chain disruptions, the long-term trend is clear: Solar panels are becoming more and more affordable,” Stevenson said.
| Average cost per watt | Average solar panel cost for a 6kW system | |
|---|---|---|
| Alabama | $2.45 | $13,893 |
| Alaska | $2.41 | $16,002 |
| Arizona | $2.53 | $18,465 |
| Arkansas | $2.80 | $16,726 |
| California | $2.80 | $19,223 |
| Colorado | $3.07 | $18,995 |
| Connecticut | $3.01 | $18,103 |
| Delaware | $2.67 | $20,422 |
| District of Columbia | $3.33 | $20,357 |
| Florida | $2.56 | $18,586 |
| Georgia | $2.88 | $23,757 |
| Hawaii | $2.67 | $26,686 |
| Idaho | $2.77 | $18,641 |
| Illinois | $2.95 | $19,290 |
| Indiana | $3.16 | $20,682 |
| Iowa | $3.11 | $16,201 |
| Kansas | $2.49 | $18,930 |
| Kentucky | $2.34 | $17,696 |
| Louisiana | $2.87 | $17,507 |
| Maine | $3.14 | $17,462 |
| Maryland | $2.95 | $19,157 |
| Massachusetts | $3.24 | $21,723 |
| Michigan | $3.30 | $17,539 |
| Minnesota | $3.15 | $19,537 |
| Mississippi | $2.64 | $18,526 |
| Missouri | $2.72 | $21,894 |
| Montana | $2.48 | $15,187 |
| Nebraska | $2.83 | $16,910 |
| Nevada | $2.56 | $18,787 |
| New Hampshire | $3.26 | $25,646 |
| New Jersey | $2.86 | $18,946 |
| New Mexico | $3.04 | $20,831 |
| New York | $3.21 | $20,435 |
| North Carolina | $2.79 | $23,144 |
| North Dakota | $2.42 | $13,753 |
| Ohio | $2.77 | $18,769 |
| Oklahoma | $2.62 | $19,465 |
| Oregon | $2.81 | $18,340 |
| Pennsylvania | $2.81 | $21,079 |
| Rhode Island | $3.23 | $21,388 |
| South Carolina | $2.81 | $21,388 |
| South Dakota | $2.39 | $13,620 |
| Tennessee | $2.73 | $15,395 |
| Texas | $2.73 | $21,579 |
| Utah | $2.69 | $17,473 |
| Vermont | $3.01 | $18,446 |
| Virginia | $2.90 | $22,806 |
| Washington | $2.97 | $18,630 |
| West Virginia | $2.78 | $15,529 |
| Wisconsin | $3.01 | $21,584 |
| Wyoming | $2.57 | $14,570 |
Cost data are based on averages in each state as of April 2024. Contact your local solar panel installer for the most accurate estimates for your home.
Cost by type of solar panel
The type of solar panel you invest in plays a major role in the total cost of your solar project. Monocrystalline solar panels tend to be the most expensive type to install, but they are more efficient than their more economical polycrystalline counterparts.
| Cost per watt | Cost for 6 kW system | |
|---|---|---|
| Monocrystalline | $1 - $1.50 | $6,000 - $9,000 |
| Polycrystalline | $0.75 - $1 | $4,500 - $6,000 |
| Thin-film | $0.43 - $1.50 | $2,580 - $9,000 |
Monocrystalline
Monocrystalline solar panels are the most efficient type of solar panel, so it shouldn’t be a surprise that they’re also the most expensive. Before adding installation and labor costs, you can expect to pay between $1 and $1.50 per watt. This means that the base cost of a 6 kW solar system will be between $6,000 and $9,000. After you factor in labor and equipment costs, this cost can easily double or even triple.
Polycrystalline
At the more economical price of $0.75 to $1 per watt or a starting point of $4,500 to $6,000, polycrystalline solar panels are the most common type of solar panel to install. These panels may be less efficient than monocrystalline solar panels, but they can still produce enough energy to offset your home’s energy usage. These panels are your best option if you live in a region that experiences year-round daily sunlight.
Thin-film panels
Thin-film solar panels have the most variable cost of solar panel types because they have a wide variety of uses. They can be used for small DIY solar projects or also at an industrial scale.
Depending on the quality and intended use of your thin-film solar panel, you can expect to pay as little as $0.40 per watt or as much as $1.50 per watt. This puts thin-film panels at a starting point of $2,580 to $9,000 for a 6 kW solar panel system.
Cost by solar system
Each solar panel is a single part of the whole solar system. There are three solar system types, each with different installation and equipment requirements.
Grid-tied system
If you live in a residential area, you’ll likely install a grid-tied system. These on-grid systems don’t require a solar battery or generator, so you can expect to pay an average cost of $13,620 to $26,686 for the solar panels alone.
Grid-tied system with storage
Some homeowners prefer to have battery storage to keep excess energy for times when energy production is low, such as at night or on an overcast day. If you’re interested in a grid-tied system with a solar battery, you’ll pay $13,620 to $26,686 for the solar panels, plus an additional sum for each solar battery. On average, these batteries cost between $7,000 and $14,000.
Off-grid system
With an off-grid solar panel set-up, you source all your electricity independently of the grid. Off-grid solar systems are the most expensive to install because you’ll need a high-capacity solar battery storage system, backup generator and solar panels. If you’re interested in this type of system, expect to spend between $45,000 and $65,000.
What impacts solar panel installation costs?
Solar panels and cost of labor are two of the biggest cost factors, but these other factors can also impact solar panel installation costs.
Solar system size
The size of your solar system has the biggest impact on cost. The bigger the solar system, the more expensive it is. For example, you’ll pay around $8,460 for a 3 kW system but upwards of $28,200 or more for a 10 kW system.
Financing option
Like buying a car or a home, the more money you put down, the less interest you’ll pay over time. So, to save the most money on your new solar panels, put down as much cash as possible without jeopardizing your financial well-being. Be aware that not all financing options are eligible for solar tax incentives and rebates.
Labor
Labor costs can account for more than half of the total cost of your entire solar project. The most expensive monocrystalline solar panels start at $1 to $1.50 per watt, but this doesn’t account for the extra $1.32 to $1.82 per watt in average solar installation cost per watt.
Mount types
How you mount your solar panels also plays into cost. Most residential homeowners only need fixed mounting systems or adjustable mounts, but you may also choose the higher-tech tracking mount for maximum efficiency:
- Fixed mounts are the cheapest and cost between $10 to $50 each.
- Adjustable mounts can be shifted for better sun exposure and are between $30 and $250 each on average.
- Dual-axis tracking mounts are the most expensive at $450 to $775 each because they follow the sun as it moves throughout the day.
Roof pitch
Roof pitch, or how steep your roof is, also impacts cost. Steeper roofs make solar installation trickier, so it can impact labor costs and the time it takes to install.
Sunlight exposure
The more sunlight your panels can access, the more energy they can produce. If you live in a state that allows net metering or other solar energy buy-back programs, you’ll want exposure to as much sunlight as possible. But to make your roof prime real estate for solar panels, you may need to cut down or trim a tree, which can easily cost an extra $250 to $700 on average.
Time of year
Summer is the peak solar panel installation season, which means solar installers are busier. The opposite is true in the winter, so a quote in the winter months may be lower simply because there isn’t as much demand for solar installation.
How can I pay for solar panels?
Several options are available to pay for solar panels, and each has pros and cons. The common ways to pay for solar panels include the following.
Cash
If your personal financial situation allows, consider paying for your entire solar system upfront. The main advantage of paying all cash for your solar panels is that you won’t have to pay back any interest on a loan, so this is often the cheapest buying option. The downside: you’ll be out a large sum of cash and may forfeit your return on investment if you decide to sell your home.
Solar loan
Solar loans are a popular option because you only need a down payment instead of paying for your entire system upfront. Solar loans make it possible for nearly every homeowner to access solar panels. Plus, you’ll still benefit from solar incentives and rebates.
A solar loan operates a lot like a mortgage; you’ll pay for them over time (with interest) until you eventually own the solar panels. This means your panels cost more than if you had paid for them in cash.
Power Purchase Agreement
With a Power Purchase Agreement (PPA), a third party installs and maintains your solar panels. The energy generated by your solar panels doesn’t go directly to your energy provider. Instead, you buy the energy from your PPA holder, albeit at a lower cost than conventional electricity. The main disadvantage of PPAs is that you don’t own your solar panels; a third party does. This means you can’t benefit from solar incentives and rebates.
Solar lease
Solar leases are similar to PPAs because you don’t own the solar panels. What distinguishes the two is what you pay for each month. With a solar lease, you pay a fixed monthly lease fee. The benefit of solar leases is that they are often $0 down, but because you don’t own the panels, you won’t qualify for solar incentives and rebates.
Solar incentives
Solar panels aren’t cheap, but there are many ways to make them more affordable. From federal tax incentives to local rebates and energy buy-back programs, there are many ways to make solar panel systems more affordable.
- Federal investment tax credit (ITC): If you install solar panels by 2032, you’re eligible for a tax credit equal to 30% of the cost of your installation. This is claimed on your federal income taxes and decreases your tax debt.
- State tax credits: Like the federal ITC, some states, like New York, can receive an additional tax credit toward state income tax. Although the total amount depends on what’s available in your state, this tax credit can be as much as 25% of the cost of your solar project.
- Solar rebates: Some utility companies, such as Xcel Energy, will reward you for solar panel installation. The amount can be as much as $2 per watt, which can amount to hundreds of dollars for larger systems. States, solar manufacturers and installers may also offer rebates to make going solar more affordable. Available rebates depend on your location, so ask your solar installer about what’s available.
- Performance-based incentive (PBI): PBIs will pay you for the electricity produced by your solar system. So, if you produce more energy than your home consumes, you can sell that extra energy.
- Solar renewable energy certificates (SRECs): Many states now have renewable portfolio standards, which require utility companies to generate a certain percentage of electricity from renewable sources. Some utility companies will buy solar energy from homeowners, which can be profitable.
- Tax exemption: Solar panels can increase the value of your home, but that added value won’t impact your property taxes in 35 states. Solar panels may also be exempt from state sales taxes, which can lower the installation cost.
Are solar panels worth it?
According to the U.S. Energy Information Administration (EIA), U.S. households’ average monthly energy bill in 2022 was $137, a 13% increase from 2021. This means the average American will spend roughly $1,644 on electricity yearly, and more if you live in states with high energy costs, like California and New York.
Although there is a steep upfront cost for solar panel installation, a complete offset of energy can save you money in the long run: An average of $14,000 to $27,000 over the lifetime of your solar system. With US energy bills continuously on the rise, the opportunity for savings will continue to increase. And if you live in a state with high energy costs, you’ll benefit the most from installing solar panels.
But just because solar panels can be worthwhile doesn’t mean they are worth it for every homeowner. It may seem obvious, but solar panels need sunlight to produce energy. So, if you live in a region with less sunlight, you won’t produce as much energy as someone who experiences full days of sunlight year-round. Less sunlight means less energy, which ultimately equals less energy savings.
Bottom line
On average, solar panel installation costs between $13,620 to $26,686, or $2.82 per watt, for a 6 kW system. Of course, the cost of your solar panels depends on the size of your solar system, where you live, your labor, your financing options and more. To get the most accurate estimate for your solar project, contact a professional solar installer.
Frequently asked questions (FAQs)
According to a 2019 study by Zillow, solar panels may increase the value of your home. By comparing homes sold with and without solar panels, the researchers at Zillow found that in some states (such as California, New York and Florida), homes with solar panels sold for an average of 4.1% more than homes lacking these systems.
There isn’t a one-size-fits-all answer to the number of solar panels you need for your home, but the average homeowner needs between 17 and 25 solar panels. This number primarily depends on the amount of energy you use, the size of your home, your energy goals and the type of solar panels you use.
In 38 states, such as Minnesota, California, and Colorado, you can send excess energy produced by your solar panels back to the grid and credit it toward future use.
For instance, if you generate more energy during the day than your home consumes, you can credit that extra energy towards when your home’s energy use exceeds the energy produced. You will then only be charged for your net energy usage.
If your solar panel system is large enough to offset your energy costs, they can save you money. Because the average American pays about $137 per month (or $1,644 per year) on electricity, solar panels can save you money each month.
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