Solar panel costs typically range from $17,430 to $23,870, but many homeowners will pay around $20,650 on average. Solar panels are a considerable investment. Various factors influence your project price, including the panels you choose, your home’s energy needs, and applicable state and federal tax incentives.

We have conducted in-depth research on the best solar companies in the United States and the industry overall. This guide breaks down the significant factors that influence what solar panels cost, as well as the national average for a solar energy system.

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Note: All cost data in this article is based on data from EnergySage, Consumer Affairs, Home Advisor, and Angi.

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Average Cost of Solar Panels

Though solar pricing varies by location, system size, and other project variables, EnergySage data shows these figures as the national average:

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How Much Do Solar Panels Cost in Each State?

Solar panel costs can vary according to your state’s energy rates and access to solar technology. Check the table below to get an idea of what solar panels might cost you in your state.

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Solar Panel Cost Breakdown

EnergySage estimates that the national average cost for a typical 6-kilowatt (kW, or 6,000 watts) residential rooftop solar system is roughly $20,650 before any federal tax credits or local incentives.* Overall, you should expect to pay anywhere between $17,430 and $23,870, depending on your system size and location.

The total cost of a solar system includes solar panel prices, which vary in price by brand and type, installation labor, system size, and additional equipment. A solar installation company will charge a combination of labor costs and a price per watt for each solar panel.

*Based on a June 2024 report.

Types of Solar Panels

The type of solar panel you order will influence your total price. Below is a breakdown of the three most popular types of solar panels and their average price. 

 

Labor

Installation costs—including labor and permits—average around 25% of the cost of the solar panel system itself. So, for example, if you purchase a 6-kW monocrystalline solar panel system for $20,000, then a solar installation company will likely charge approximately around $25,000 for the system and the installation, combined. The installation of a larger system will naturally increase labor costs.

System Size

Determining the right system size for your property requires looking at a few factors: energy needs, roof size, and layout. You can determine how much energy it typically takes to power your home by looking at your monthly electric bill. We’ve included more on this in the next section. The size and shape of your roof, or wherever you intend to install the panels, also influences the system you can install. EnergySage estimates that the typical household needs an average of 19 panels to fulfill its electricity needs, which is roughly a 7-kW system.

Additional Equipment

Residential solar systems also typically require a battery to store energy and an inverter, which converts the variable direct current (DC) output of your PV solar panels into alternating current (AC). Most solar companies will include these components in your solar system’s design. However, if you request specific brands of inverters or batteries, they may come at a premium.

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Solar Incentives and Rebates

Most states offer several solar tax credits and rebates that help purchasers save money, incentivizing them to switch to solar and power their homes more sustainably. You can check on your state’s Department of Energy website to learn which programs are available in your area and on websites such as EnergySage and the Solar Energy Industries Association (SEIA).

Common state-level solar incentives include:

• Renewable energy tax credits
• Sales and property tax exemptions
• Solar easements and right-to-solar laws

At the local level, many utility companies offer net-metering programs that allow solar owners to send any excess energy their system generates to the power grid, earning them credits in return. If the system owner ever needs to rely on the power grid for electricity during cloudy days or at night, they can use their credits to pay their utility bill.

The biggest financial incentive is the federal solar tax credit (ITC). This federal-level credit lets solar buyers claim 30% of the total system cost on their income taxes the year of installation. However, this credit is only for those who own their system, meaning anyone who buys it outright or via a solar loan. Those with a solar lease or power purchase agreement (PPA) are not eligible.

We recommend using the Database of State Incentives for Renewables & Efficiency (DSIRE) to see which solar rebates and state tax credits you can receive.

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Other Factors to Consider About Solar Panel Costs

In addition to the cost per watt for each solar panel, other factors influence the overall cost of a solar power system. We have listed some of the most critical factors for you below. 

Energy Needs 

Take note of your current cost of electricity, as switching to solar may or may not save you money on your energy costs. The larger your home and higher your monthly electric bill, the more benefits you are likely to see from switching to solar. A solar system can eliminate a homeowner’s electricity bill in some instances.

On the other hand, if you already have relatively low utility bills, you may not see enough savings to justify the expense of installing a home solar system. 

Location

The location of your home plays a vital role in how much money solar panels can save you. Using data from the Centers for Disease Control and Prevention (CDC), the data analysis site Stacker determined that states such as Arizona, California, Colorado, and Florida are among the sunniest in the country, making these top locations to get great sun exposure. The sunnier the state and the higher the electricity rate, the more return on investment that location will see.

Roof Type

You can use a solar panel system even if you don’t live in these blue-sky states. Most solar panel installers use photovoltaic (PV) panels, which can absorb both direct and indirect sunlight. However, these solar panels generate the most energy on angled roofs that allow maximum sun exposure. On the other hand, a flat roof will require the construction of angled platforms, which will add to your labor costs and increase the overall cost of your solar system installation. 

Additionally, south-, west- or southwest-facing roofs get more sun exposure. For example, a home that experiences less shade and has a south-facing roof with a slope between 15 and 40 degrees will receive the most sunlight. Therefore, these homes receive and retain more solar energy. On the other hand, a home with trees around it or in a less sunny region, like the Pacific Northwest, may not save as much money as a homeowner in Arizona or California. 

Your roof’s age and structural soundness will also influence the overall cost of solar panel installation. Repairing your roof or upgrading your roofing material to support panels will come at an additional expense ahead of installation and affect your total cost.

Payment Options

Solar providers offer various payment methods that influence how cost-effective your investment in solar is. Here are the four payment options you can choose from with most solar companies: 

• Purchase: Paying for your solar system up-front is the most cost-effective payment method for a solar system. Not only will you avoid paying interest over time, but you will also be eligible to file for the federal tax credit at your next income-tax filing.
• Solar Loan: Solar companies understand that not every homeowner is willing or able to pay for their system up-front, so they partner with a lending company to provide loan options. As with all bank loans, your interest rate will depend on your credit score.
• Solar Lease: Some homeowners may elect to lease their solar panel systems. With this arrangement, the solar company still owns the system, and you pay a set monthly amount for the installed solar panels. This option is not as cost-effective over time as purchasing or financing your system, as you are not eligible to receive state or federal incentives. However, you avoid paying hefty up-front sums.
• Power Purchase Agreement (PPA): A solar PPA lets you pay little to nothing for the actual installation of the PV system. Instead, you pay monthly payments to a utility company based on the energy generated by the system. Think of this as if you are paying for your usual electricity bill. As with a lease, you don’t own the system and are thus ineligible for tax incentives.

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Are Solar Panels Worth the Cost?

In most cases, solar panels are worth the cost. Transitioning to clean energy saves you money and reduces your carbon footprint, fossil fuel use, and greenhouse gas emissions. Nonetheless, the worth of solar panels varies across households and locations.

There are a few things to consider when determining whether solar panels are worth it for you, such as:

• Your energy usage: If you have a smaller home, don’t use many appliances, and tend to keep the lights off, you may not use enough power to make switching to solar worth the investment. The cost of electricity in your area also plays a role. The higher the cost, the more value you’ll get from going solar.
• Your payback period: If it takes an excessive amount of time to pay off your panels before you can start enjoying the energy savings, you may be better off financially not getting a system. Read more about payback periods.
• Your property location and position: Those in areas that see year-round sun will get more value from solar panels, as will those whose roofs get good sun exposure.
• Your roof size and dimensions: The best place to install solar panels for most households is on the roof due to fewer obstructions to solar exposure. If your roof is too small or oddly laid out to fit the number of panels you need, getting a system may not be worth it.

One thing that may make getting solar panels worth it is increased property value. The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) found that your home value increases by $20 for every $1 you save on your utility bills. If your solar panel system saves you $800 per year, that translates to an added $16,000 to your home value. Learn more about how to determine if solar panels are worth it for you.

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Hidden Costs of Solar

Maintenance, energy storage, and other costs are necessary to protect your system and get the most value out of it. Common associated costs include the following:

• Cleaning: Your panels may need professional cleaning from time to time. Rainfall may be enough to keep your panels clear of debris, but if you live in an area prone to wildfires, dust, or heavy pollen, this layer of debris can prevent your panels from performing at their best.
• Insurance: Installing solar panels often comes with a home insurance increase. Some states require solar-specific insurance in addition to your usual insurance coverage.
• Maintenance: Solar panels require minimal maintenance. Most installers recommend examining panels every few years to inspect wiring and connections. The cost of professional maintenance isn’t substantial, but it’s one to be aware of.
• Property tax: Most states waive property taxes on any additional home value installing solar equipment gives you, but if yours is one of the few that doesn’t, you’ll see your tax bill go up.
• Repairs: There are occasions when solar panels require repair work if there’s a bad storm or you notice they’re not performing as they normally do. If insurance doesn’t cover repairs, you’ll have to pay out of pocket.
• Roof work: If your roof is old or damaged, you must address this before installing panels. You don’t want to install panels over any damage, and a roof that’s 10 years or less from needing replacement should just be taken care of before laying down panels. Depending on your roof’s condition, this can be the highest or second-highest hidden cost.
• Solar battery: Many homeowners purchase solar batteries with their systems. Solar batteries store excess energy and let you use this energy to power your home at night, during blackouts, or when utility rates are high.
• System monitoring: If you opt to use a solar company’s active monitoring, there’s sometimes a monthly fee included.

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Solar Panel System Installation

Most solar companies follow these steps for installations:

1. Site evaluation: An installer will visit your home to confirm the planned design and estimate the scope of work. This person or their team will also inspect your roof, attic, and electrical setup.
2. Permit approval: Most states require a permit to install solar panels. Your solar provider should handle the paperwork with your local municipality.
3. Installation: Installation typically takes one to three days. You don’t need to be home for it, but we recommend it so you can ask questions.
4. Cleanup: Installers should remove debris and leave your property in good condition.
5. City inspection: Your provider should coordinate with your city to have an inspector check that your system is up to code.
6. Utility connection: Your system must be connected to your local utility system if you’re connecting it to the grid. You’ll apply for connection through your utility company. Your utility company will also want to inspect your system to ensure it follows its utility guidelines. You can turn your system on after you get permission to operate.

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Our Recommendation

Residential solar panels help you cut electricity costs and carbon emissions. Installing solar panels may be a good choice if your location has high electricity costs, solar incentives to help you save money, and a reasonable payback period so you see energy savings sooner.

You can use the tool below to get a sense of what solar costs are like in your ZIP code.

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How We Chose the Top Solar Companies

We researched and analyzed dozens of solar panels and solar installation companies. We then formulated a rating system based on each solar installer or manufacturer’s services and products. We weighed several significant factors, including the quality and type of solar panels offered, the customer support network, warranty lengths and limitations, and additional benefits such as mobile apps for monitoring and customer service.

Speaking directly to representatives, we determined how each solar company personalizes its solar panel installation for each home. We also analyzed each company’s warranty options to ensure their product and performance guarantees match or exceed industry standards.

We evaluated each provider based on their rating and history with the Better Business Bureau (BBB) to determine reputation. In addition, we analyzed the 100 most recent Google Reviews for each provider across various locations and branches.