How Much Do Solar Panels Cost?

National Average Range:
$10,980–$19,978 (before incentives)

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Solar Panel Installation Cost Guide

Updated: January 16, 2024

Reviewed by Joe Roberts remodeling expert. Written by

To provide you with the most accurate and up-to-date cost figures, we gather information from a variety of pricing databases, licensed contractors, and industry experts.

How much do residential solar panels cost?

On average, U.S. homeowners pay about $15,250 to install residential solar energy systems.

Getting photovoltaic solar panels for your home is the best way to switch to clean, renewable energy. It can also save you a ton of money in the long run.

The total cost of solar panels can vary dramatically depending on factors like where you live and how many solar panels you need. On the high end, solar panel installation can cost over $40,000. On the low end, it only costs a few thousand. It all depends. 

Additionally, none of these prices account for incentives like the federal investment tax credit (ITC), which can make your solar system up to 30% more affordable.

See how much solar installation costs in your area

Are solar panels worth the cost?

Solar is often worth its high price, but there’s a caveat: it takes years to see a return on a solar investment. Every solar system eventually pays for itself by bringing down the owner’s utility bills. The length of time between when you pay for your solar system and when it fully repays you for its costs is called the “payback period,” and it often lasts 9–12 years. After your panels pay themselves off, all the money they’ll save you is just gravy.

It’s also worth noting that solar panels don’t pay themselves off at equal speeds in all areas. If your state doesn’t offer net metering, you don’t get much sunlight where you live, or your area's standard electricity rates are meager, your payback period will be much longer. In some states, payback periods can stretch over 14 years.

So, while your solar system should eventually pay for itself, it might take too long to be worth the price. To really determine if solar energy is a sound investment for your home, you need to find out exactly how much you’ll pay for your system and how much money it will save you during its lifespan. We’ll help you approximate all that, but there’s no substitute for actually getting an installation quote from a solar company. 

Factors that can affect the price and value of your solar panels


Where you live will greatly impact the overall cost of your solar power system, and local market conditions are part of the reason. Depending on local policies, manufacturing rates, product popularity, and competition between providers, parts and labor costs vary. 

Additionally, because of the shape of the earth and its angle relative to the sun, different states get different amounts of direct sunlight each day. If you live in a sunny state, each solar panel you install on your home will operate more efficiently and produce more electricity daily. If you live in a less sunny state, you’ll need more solar panels to produce the same amount of electricity, so your system will be more expensive. 

Since electricity rates from utility companies also vary by location, where you live can extend or shorten your payback period. In areas where the power company charges more for grid electricity, your solar panels will save you more money on your monthly electricity bills and pay themselves off quicker.

For example, solar system installation in Hawaii is more expensive than in many other states, but Hawaii’s electricity rates are the highest in the country. So, despite the state’s high costs for solar installation, you can save so much money by foregoing grid electricity in Hawaii that we’ve calculated that the state actually has the nation’s shortest solar payback period. That is, as long as your panels can completely offset your electric bill.

This table provides a quick overview of solar installation costs, electricity prices, and estimated payback periods in every state. 

Solar panel installation costs, electricity rates, and payback periods by state


Average solar system costs

Average cost of electricity (cents/kilowatt hour)

Estimated annual electric costs 

Estimated payback period





5.6–6.8 years





6.3–7.6 years





7.1—8.7 years





5.3–6.5 years





5.4–6.6 years





7–8.5 years





5.3–6.4 years





10.8–13.2 years





11.9–14.5 years





5.5–6.8 years





4.4–5.4 years





6.1–7.5 years





5.4–6.6 years





5.5–6.7 years





5.8–7.1 years





6–7.3 years





5.2–6.3 years





6.1–7.5 years





6.2–7.5 years





6.1–7.5 years





3–3.7 years





10.1–12.3 years





5.5–6.7 years





5.8–7.1 years





6–7.4 years





5.2–6.3 years





6.3–7.7 years





7.4–9.1 years

New Hampshire




6.1–7.4 years

New Jersey




4–4.9 years

New Mexico




4.9–6 years

New York




3.2–3.9 years

North Carolina




9.7–11.9 years

North Dakota




5.2–6.3 years





5.6–6.9 years





5.8–7.1 years





10.5–12.9 years





5.4–6.6 years

Rhode Island




1.4–1.7 years

South Carolina




7.2–8.8 years

South Dakota




9.4–11.5 years





5.8–7.1 years





7.5–9.1 years





10.1–12.4 years





6.6–8.1 years





5.6–6.8 years





5.6–6.9 years

West Virginia




5.6–6.8 years





10.7–13 years





6–7.3 years

Data as of January 2024. Solar installation prices are calculated post-federal tax incentives. State-by-state electricity prices are sourced from the U.S. Energy Information Administration. Annual electric costs are based on the U.S. residential average electricity consumption of 10,632 kWh/year. Payback periods calculated assuming solar panels completely offset energy bills.

Keep in mind that every price in this table is a simple estimate that may not accurately account for the specifics of your situation. For example, it doesn’t account for any state incentives. Therefore, you could pay more or less than we’ve stated for your solar system. 

Additionally, the payback periods we’ve estimated are based on the national average energy usage, and they’re only accurate in situations where the given customer’s system is able to completely offset their monthly power bill. Because of this, your actual payback period may differ from our estimates. 

Solar system size

As we’ve alluded to, the more solar panels you get, the more your system will cost. The ideal size of your system will depend on two factors: your energy needs and how much sunlight your home gets. 

Calculating your energy needs

To get a system that completely offsets your electricity bill, you must first calculate your electricity consumption. Review your monthly electric bills for an entire year and see how many kilowatt hours (kWh) of electricity you used each of those months. Then, add the numbers together and divide them by 12 to find your average monthly consumption.

Let’s say your house used an average of 886 kWh every month. This means you’d need a system that can produce at least that much solar energy to offset your electric bills completely. 

Accounting for peak sun hours

Now comes the tricky part. You must also determine how much direct sunlight your panels will get daily. The hours when the sun is shining directly at a solar panel are the only times when that panel will provide as much energy as it’s designed to. These hours are called “peak sun hours.”

To illustrate, a 6 kW system will produce 6 kWh of electricity during a peak sun hour, but it will produce less power at other times and no energy at night.

Use this resource to determine how many average peak sun hours your state gets. 

Adding it all together

To determine how large your solar system must be, you need to take your monthly energy consumption of 886 kWh and divide that by 30 because there are approximately 30 days in a month. We’re left with roughly 29.5 kWh. This is how much electricity your system needs to generate every day to cover your energy needs.

Now, let’s say you live in New York, a state that gets about three peak sun hours every day. Divide 29.5 by 3. We’re left with 9.8, so you’d need a 10 kW system to provide all the electricity you need. California, on the other hand, gets five or more peak sun hours per day, so you’d instead divide 29.5 by 5 and be left with 5.9. This means you’d only need a 6 kW system in California to generate the same amount of energy as a 10 kW system in New York.

However, generating all the wattage you need daily doesn’t necessarily mean eliminating your electric bill. Solar panels don’t generate electricity at night, and you need less energy during peak sun hours when your panels are producing the most energy. 

To solve this problem, you either need to take advantage of net metering (if you live in a state where it’s available) or install expensive solar battery storage with your system. Without one of these two solutions, it’s impossible to completely offset your monthly power bill, no matter how large your system is. 

The importance of net metering

As previously mentioned, solar batteries are quite expensive (typically between $7,000 and $15,000 per battery), so the most budget-friendly way to completely offset your power bills with solar is to utilize local net metering policies. Without comprehensive net metering, solar isn’t a realistic option for average homeowners yet. The equipment is still too expensive, though prices have been dropping for years

Here’s how full-retail net metering works. During peak sun hours, your solar panels produce more energy than your home needs. If your system is grid-tied (connected to the local power grid), this excess electricity gets sent to the grid, where it can light other homes and businesses.

For every kWh your system sends to the grid, you get credited the market price for that kWh, so you can pull a kWh from the grid later free of charge. This allows you to get the full financial benefit of your solar system’s energy production without adding a costly battery. 

Unfortunately, not all states have full-retail net metering, so you may not be able to make use of it. To learn if your state offers net metering, check out this resource. If your state doesn’t offer net metering and your primary motivator for switching to solar is to cut energy costs, then solar may not be the best choice for you until the tech becomes more affordable.  

Different types of solar panels

There are three main types of solar panels, and each one has its unique strengths and weaknesses. Finding the best solar panels for your home means understanding these differences before you purchase anything.

Monocrystalline solar panels

Monocrystalline panels are the most efficient type of solar panel on the market. They’re also the most popular for residential systems since their efficiency allows you to get all the power you need from fewer total panels. Unfortunately, these panels are also the most expensive of the three types, but only by a little bit

Popular monocrystalline panel manufacturers include Tesla, Qcells, and Sunpower.

Polycrystalline solar panels

Polycrystalline panels are a slightly more budget-friendly option than monocrystalline options, though they’re also less efficient. They typically have shorter lifespans than monocrystalline panels as well, so you get less bang for your buck with a polycrystalline panel. Still, if you’re trying to go solar on a budget, they might be a more realistic option price-wise, especially if you live in an especially sunny area.

Popular polycrystalline panel manufacturers include ZNSHINE and KF Solar.

It’s worth noting that as monocrystalline panels have become more affordable, polycrystalline panels have become rarer, so you may have difficulty finding a solar installer that carries them. 

Thin film solar panels

Thin film solar panels are the least efficient, least durable, and least expensive panels on the market. However, because of their low efficiency, they aren’t actually a good option for most residential rooftop systems. The average roof doesn’t have the surface area to accommodate a thin film system large enough to generate all the electricity the home needs. As such, they’re only really used for industrial or corporate installations. 

Solar installation pricing tiers

The budget option

If you want to go solar on a tight budget, then opt for a grid-tied solar system that uses polycrystalline solar panels. Polycrystalline panels offer the most wallet-friendly blend of efficiency and durability. However, even this low-cost system is only really affordable if your state offers comprehensive net metering and your home gets a lot of direct sunlight.

Without net metering in place, it could take well over a decade for even a relatively affordable system to pay itself off.

To save as much money as possible, don’t forget to apply for all the incentives you’re eligible for!

The mid-range option

If you’ve got room in your budget for a better solar system, we recommend getting a grid-tied system that uses monocrystalline panels. While this system will be a bit more expensive, it will more than make up for the extra costs with its great energy efficiency and lifespan.

That said, even if you’ve got a bit of money to put towards this type of system, it’s still only a wise investment if your state offers net metering. Otherwise, your solar system won’t net you any savings for a long time. 

The high-end option

If money is no object and you just want to shrink your carbon footprint as much as possible, then take your home’s electrical system completely off the power grid with a lot of monocrystalline panels and a few solar batteries to rely on during dark times.

This type of system is far and away the most expensive, but it’s the best way to make your home completely self-reliant. It’s also the only realistic way to offset your power bill completely if your state doesn’t have net metering. 

How to pay for your solar panels

Take advantage of solar incentives

In an effort to combat climate change, the federal government, along with many state and city governments, offer incentives to encourage private citizens to go solar. Monopolizing on as many of these incentives as possible is a fantastic way to make your system more affordable.

The most significant of these incentives is the federal solar tax credit. From now until 2033, all new residential solar installations are eligible for a tax credit of 30% of the installation costs.

So, if your solar system costs $10,000, you’d be credited $3,000 on your federal taxes. If you ended up owing any money on your taxes the following year, $3,000 would be knocked off what you owed. If you owed less than $3,000, any remainder from your credit would be applied to the next year’s taxes. And so on for up to five years.

The tax credit is only this good until 2033, though. In 2033, it will drop from 30% to 26%. Then, in 2034, it will drop again to 22%. In 2035, it’s slated to go away completely.

So while the solar tax credit doesn’t actually mean you get a written check refunding you 30% of your solar system’s installation costs, it can significantly lighten the financial burden by making your taxes far more favorable for a while.

In addition to the federal tax credit, you can also apply for local incentives to cheapen your solar installation. Be sure to utilize this list of solar incentives and rebates to help you pay for your panels. 

Take out a solar loan

If you want to go solar, but can’t afford a system, worry not! There are many financing options and solar loans available. Many of these loans work similarly to standard home improvement loans, and you can use the money your panels save you from paying down your loan.

The best part is that you can still apply for the federal solar tax credit if you pay for your solar system with a loan. Read this resource from the Department of Energy to learn more about solar financing. 

Enter a solar power purchase agreement

A solar power purchase agreement (also called an SPPA or PPA) is an agreement between a homeowner and a third-party—typically a solar installer or developer. In this type of agreement, the third party pays for and owns the solar panels on the homeowner’s roof, and the homeowner pays the third party for the power the panels generate.

Essentially, you buy solar energy instead of buying solar panels. Entering an SPPA can be a great way to quickly and affordably switch to clean energy and shrink your carbon footprint, especially if you aren’t eligible for a solar loan. However, it usually won’t save you as much money in the long run as simply buying your solar panels outright.

Also, opting for an SPPA means you can’t take advantage of the federal tax credit since you won’t own the solar panels on your roof. 

Other factors to consider

Picking a trustworthy and accredited solar installer is essential to getting a reliable solar system worth the time and money you’ll invest in installing it. These issues aren’t common, but a few things can go wrong with solar installation. Panels can sometimes damage a roof during installation, and if they’re installed incorrectly, they can even void your roof’s warranty.

Additionally, there are various legal hoops to jump through when installing solar panels. You need to file a building permit before the project begins and ensure the panels follow all applicable building, fire, and electrical codes.

To solve all these problems before they become problems, make sure you work with a solar installer that’s been accredited by The North American Board of Certified Energy Practitioners (NABCEP). This organization certifies that installers are trustworthy and competent, so checking for a NABCEP certification should be an important part of your research when hiring an installer. 

Are solar panels right for your home?

Solar energy is one of the best tools in the fight against climate change, especially for homeowners. While the costs for residential solar installation are pretty high, they’re no longer much higher than other types of home improvement projects. With financing options and comprehensive incentives, switching to solar has never been more affordable.

The only caveat is that you probably won’t save much money for a long time if your state doesn’t have net metering, so check your state’s net metering rules before committing to solar panel installation.

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