Solar panels cost, on average, about $16,000, or between $3,500 to $35,000 depending on the type and model. While solar panels can help save you money on energy costs, it’s important to know the overall startup solar panel costs so you can plan a budget.
Although solar energy is now more affordable than ever, it is important to understand how residential solar systems work and the general pricing guidelines for equipment and ongoing maintenance. Armed with this information, you can avoid overpaying for your panels.
As the accessibility and popularity of solar energy continue to increase, the average cost of solar panels continues to decrease.
The price of a residential solar array has fallen by more than 60% on average over the past decade – from over $50,000 for a 6 kilowatt-hour (KWh) array in 2011 to between $16,000 and $21,000 in the year 2021.
Solar energy is a popular alternative energy source that can reduce energy costs and increase home value. Our overview of the cost of solar panels will help you learn more about the advantages and disadvantages of a solar system.
Average Cost of Solar Panels:
| Average Cost | $16,000 |
| Lowest Cost | $3,500 |
| Highest Cost | $35,000 |
How Much Is Solar Panels Cost?
Switching to solar energy requires an upfront investment in equipment and involves initial installation costs. But after that initial cost, the only recurring charge is the electricity you consume beyond the power your panels generate.
Provided your solar system is the right size for your home and is properly installed and maintained, homeowners will typically see long-term savings on utility bills and payback on their investment in several years.
The Solar Energy Industries Association (SEIA) estimates the national average cost of a residential solar installation at $2.94 per watt. * For comparison, the price per watt is just under $11,000 for a 5-kilowatt (kW) system, which is the average size of a standard residential solar system in the United States.
The price of solar panels varies by brand and retailer. However, remember that solar panels represent a tiny fraction of the total initial cost of setting up a solar system.
Installation (including supporting equipment) and ongoing maintenance make up the remaining cost of the solar panel system.
Solar Panel Installation Costs by Size
| Solar Panel Size | Average Solar Installation Costs |
| 2 kW | $6,015 |
| 3 kW | $9,225 |
| 4 kW | $12,035 |
| 5 kW | $14,893 |
| 6 kW | $18,500 |
| 7 kW | $21,008 |
| 8 kW | $24,552 |
Solar panel costs by state
Solar panel costs in the US typically include equipment and installation services. Visit the Solar Energy Industries Association website to learn more about local incentives and tax credits in your area.
It’s usually in your best interest to take advantage of government clean energy programs when you can – it lowers your upfront costs and shortens your payback period.
According to our analysis, Washington is the greenest state, followed by Oregon and New Hampshire.
| State | Starting cost for 6-kW system* | Average cost per watt** | 2020 federal tax credit value (26%) | 2021 federal tax credit value (22% |
| Alabama | $13,706 | $2.45 | $3,564 | $3,015 |
| Alaska | $13,454 | $2.41 | $3,498 | $2,960 |
| Arizona | $13,680 | $2.67 | $3,557 | $3,010 |
| Arkansas | $14,713 | $2.63 | $3,825 | $3,237 |
| California | $15,240 | $2.68 | $3,962 | $3,353 |
| Colorado | $17,100 | $2.44 | $4,446 | $3,762 |
| Connecticut | $15,540 | $2.86 | $4,040 | $3,419 |
| Dist. of Columbia | $15,720 | $2.88 | $4,087 | $3,458 |
| Delaware | $15,300 | $2.65 | $3,978 | $3,366 |
| Florida | $13,920 | $2.41 | $3,619 | $3,062 |
| Georgia | $15,840 | $2.33 | $4,118 | $3,485 |
| Hawaii | $19,560 | $2.67 | $5,086 | $4,303 |
| Idaho | $17,100 | $2.52 | $4,446 | $3,762 |
| Illinois | $16,740 | $2.57 | $4,352 | $3,683 |
| Indiana | $15,300 | $2.49 | $3,978 | $3,366 |
| Iowa | $14,160 | $2.53 | $3,682 | $3,115 |
| Kansas | $13,353 | $2.39 | $3,472 | $2,882 |
| Kentucky | $13,101 | $2.34 | $3,406 | $2,882 |
| Louisiana | $15,660 | $2.38 | $4,072 | $3,445 |
| Maine | $16,073 | $2.87 | $4,179 | $3,536 |
| Maryland | $15,540 | $2.74 | $4,040 | $3,419 |
| Massachusetts | $16,440 | $2.87 | $4,274 | $3,617 |
| Michigan | $16,020 | $2.66 | $4,165 | $3,524 |
| Minnesota | $17,280 | $2.74 | $4,493 | $3,802 |
| Mississippi | $14,763 | $2.64 | $3,838 | $3,248 |
| Missouri | $14,461 | $2.59 | $3,760 | $3,181 |
| Montana | $16,560 | $2.42 | $4,306 | $3,643 |
| Nebraska | $15,820 | $2.83 | $4,113 | $3,480 |
| Nevada | $14,760 | $2.61 | $3,838 | $3,247 |
| New Hampshire | $17,460 | $2.83 | $4,540 | $3,841 |
| New Jersey | $14,520 | $2.77 | $3,775 | $3,194 |
| New Mexico | $16,680 | $2.44 | $4,337 | $3,670 |
| New York | $15,900 | $2.86 | $4,134 | $3,498 |
| North Carolina | $14,040 | $2.49 | $3,650 | $3,089 |
| North Dakota | $13,555 | $2.42 | $3,524 | $2,982 |
| Ohio | $14,400 | $2.50 | $3,744 | $3,168 |
| Oklahoma | $14,667 | $2.62 | $3,813 | $3,227 |
| Oregon | $15,060 | $2.50 | $3,916 | $3,313 |
| Pennsylvania | $15,420 | $2.38 | $4,009 | $3,392 |
| Rhode Island | $16,200 | $2.69 | $4,212 | $3,564 |
| South Carolina | $16,500 | $2.62 | $4,290 | $3,630 |
| South Dakota | $13,535 | $2.39 | $3,519 | $2,978 |
| Tennessee | $13,909 | $2.49 | $3,616 | $3,060 |
| Texas | $14,820 | $2.60 | $3,853 | $3,260 |
| Utah | $15,420 | $2.66 | $4,009 | $3,392 |
| Vermont | $16,620 | $2.85 | $4,321 | $3,656 |
| Virginia | $15,780 | $2.66 | $4,103 | $3,472 |
| Washington | $14,040 | $2.73 | $3,650 | $3,089 |
| West Virginia | $14,763 | $2.64 | $3,838 | $3,248 |
| Wisconsin | $17,580 | $2.60 | $4,571 | $3,868 |
| Wyoming | $14,360 | $2.57 | $3,734 | $3,159 |
* Before tax credits, according to EnergySage and Solar Reviews.
What Size Solar Panel System Do You Need?
An average household uses 905 kWh per month or around 10,850 kWh per year of electricity. An average-sized home with a decent amount of sunshine could install a 5kW to 6kW solar panel system to reduce utility bills.
You may want to learn about your sun number score for solar based on your home’s location and average sunlight exposure. Also, look at the different dimensions and sizes of solar panels for more context.
- The larger the solar panel system you install for your home, the lower the cost per watt. The cost per watt — including solar panels, parts, labor, permits, and overhead — ranges from $6 to $8 per watt.
With solar panels, the money you save on your utility bills can more than offset your initial installation costs in 7 to 20 years. Numerous solar rebates and incentives are available from both government and local energy suppliers that can significantly accelerate your return on investment.
You may also be able to participate in the sale of surplus electricity from your solar panels through Net Metering in your area.
Cost of Solar Panels by Type
Monocrystalline Solar Panels
On average, monocrystalline solar panels cost $1 to $1.50 per watt which was the most energy-efficient option. which means that outfitting a 6-kW solar panel system (also known as a solar system) costs between $6,000 and $9,000.
Polycrystalline Solar Panels
Polycrystalline solar panels are less energy-efficient than monocrystalline solar panels and cost $0.90 to $1 per watt, so outfitting a 6 kW solar panel system would cost between $5,400 and $6,000, making it a more affordable option.
Thin-Film Solar Panels
On average, thin-film solar panels cost between $1 and $1.50 per watt, which means that a 6kW solar panel system costs between $6,000 and $9,000 to outfit.
Thin-film solar panels are less expensive than their counterparts, but they take up a lot of space and are therefore mainly used in industrial environments.
Solar Panel Installation Costs
Installing solar panels can cost anywhere from $15,000 to $25,000. That price depends on location, with solar power costing more in regions farther from the equator, like Alaska, and less in sun-drenched regions.
Additional Solar Panel System Costs
There are a few things you should add to the total cost of your solar energy system to get the most accurate price estimate possible. Here are a few additional factors that affect the cost of your solar panels:
- Labor Costs – Local labor costs for solar installation will vary depending on your region and the average cost charged by solar installers in your area.
- Installing Solar mounts – The cost of installing the racks that hold your residential solar panels also affects costs. There are a few options for solar mounting.
- Solar Inverter Installation – A solar inverter must be installed to convert Direct Current (DC) from the panels to Alternating Current (AC) for use in your home
- Other Costs: There may also be costs for local permit fees, inspection fees and taxes on the solar panels.
With solar panel prices falling, this “solar panel soft cost” now makes up the majority of what you pay when you install solar for your home.
Fortunately, the soft cost has come down as more people use solar power – a trend that is very likely to continue in the future.
An analysis by the federal government’s National Renewable Energy Laboratory (NREL) found that installed prices have fallen by an average of 13% to 18% annually.
How Many Solar Panels Will You Need?
To know how many solar panels you need, you should determine how much electricity you use in your home and what types of solar panels are installed.
An average home in the United States uses about 900 kilowatt hours (kWh) a month—roughly 11,000 kWh a year. You can easily calculate your actual consumption by looking back at your electricity bill. As a general rule of thumb…
- A 3-kWh solar system generates around 3,600 kWh – 4,800 kWh per year.
- A 5-kWh system produces around 6,000 – 8,000 kWh per year.
- A 10-kWh system can produce around 12,000kWh – 16,000kWh per year.
Depending on the size of the system, the cost of the solar panels would range from $4,000 to $16,000.
Add another $3,000-$10,000 for other necessary components such as Racks for the panels, wiring, solar inverter costs, and the total cost of installing solar panels would now be closer to $20,000.
When To Install Solar Panels?
Contrary to popular belief, winter is actually the best time to install solar panels. There is simply less demand for this service in winter, so the installation should cost less overall.
Even if you live in a region that tends to be cloudy and/or cool, your solar panels can still generate energy, and in some cases even more energy than in warmer months.
Installing solar panels in winter is not only inexpensive but also efficient. Because installers do less work during the off-season, your panels are likely to be installed faster and ready to go in no time.
How Much Do Solar Panels Save?
Although solar panels cost money upfront, they will surely save you money in the long run.
How many solar panels you save depends on a number of factors, including the hours of daily direct sunlight available to the panels, the pitch of your roof, and the size of your solar panel system.
However, the most important factor in determining how much money you’ll save with solar panels is simply your local electricity rates.
To determine how much money your solar panels save you each year, calculate how much you spend on electricity annually (for reference, a typical American family spends about $1,450 a year on electricity).
Then determine what your current electricity tariff is, and remember that electricity tariffs are increasing by about 2.2% each year (yet another reason to install solar panels).
Use an online calculator to estimate your annual savings by entering information such as your location, energy usage, and the current average price of installing solar panels in your area.
A common misconception is that solar panels will completely wipe out your electricity bills. While this is sometimes the case, solar panels will significantly reduce your electricity bill each month and are worth the overall investment.
Bottom line
The average total cost of installing a residential solar system before tax credits or rebates is comparable to the price of a new car.
When you decide to install solar panels in your home, you also need to consider the cost of equipment and installation, as well as the cost or fees of labor, permits, inspections, and system maintenance.
Because the sun is a free source of energy, once you’ve paid for your panels and installation, returns are high and maintenance costs are minimal. Next, read about the pros and cons of solar panels or learn how solar panels work.