How much does it cost to install solar panels in the US? As it turns out, solar is pretty affordable in some states, with an average cost per watt of $3.16 in 2017.1 However, solar panel costs can vary significantly from state to state and even between towns. Tax incentives, rebates, and subsidies from your utility company, your state government, and the federal government can all reduce the cost of your solar installation.
Your local solar installers will be able to tell you about cost reductions in your area, and it’s always a good idea to collect a few estimates before deciding on an installer. You can also use our solar calculator to estimate the cost of solar panels for homes in your area.
Why Solar?
Solar panel installations can significantly lower or even eliminate your monthly electricity bill. Most homeowners save enough money over time to pay back their entire solar power system cost in just a few years, and solar power is 100% renewable, which means it’s great for the environment. Solar installations can produce power with reasonable efficiency for 25 years or more—and often with very limited maintenance, making them excellent long-term investments.2
How Solar Works
Solar installations produce electricity using photovoltaic panels, usually made from silicon, glass, and aluminum. Solar panels are wired together and produce direct current (DC). A string of panels, called an array, feeds power into an inverter, which converts direct current (DC) to alternating current (AC) so it can be used to power your home.
In most cases, solar installations are grid-tied, and the electricity flows directly into your town’s electricity grid. You’ll get a discount on your bill from the electric company, which meters the power generated by your solar panels. Solar panels naturally lose efficiency over time, but again, they can operate effectively for 25 to 30 years or more.3
Learn more about solar power with our visual guide to solar technology.
Key Terms to Know
When comparing solar quotes from different installers, you’ll want to know a few key terms:
- Watts/kilowatts: Watts and kilowatts are measurements of the power in an electrical circuit. Solar panels are measured by their output, which is based on their nameplate capacity (defined below). Most solar panels have an output of 250 to 400 watts.4 The average solar installation size in the US is 5 kilowatts, or 5,000 watts.5
- Kilowatt-hour: This is a measurement of solar production (kilowatts) over time (hours). This is the standard unit of measurement for electricity bills in the US.
- Nameplate capacity: The nameplate capacity, or nominal capacity, is the maximum output of a solar panel or system when operating at 100% efficiency. Panels will invariably produce less than their nameplate rating due to a natural degradation of efficiency over time and less-than-ideal conditions.
- Photovoltaic efficiency: Photovoltaic efficiency is a measurement of how much solar energy a panel can convert into electricity. Variance from the nameplate capacity can be caused by the panel’s age or position; the amount of sunlight the panel is exposed to; and any obstructions like trees, fallen leaves, or cloud cover.
How Solar Panels Are Sold and Priced
Solar panels are almost always sold in bulk. Several solar panels installed on a single rack can be wired together to function as a single unit, or there can be a series of separate units when roof space is limited.
The solar panel price depends on the efficiency rating and overall quality of the panel. Installers often provide a discounted price on solar panels through bulk purchasing, which can be much cheaper than the sticker price for DIY installations. This makes professional installation the preferred option for almost all homeowners. The overall price of a system also depends on the cost to install solar panels and other equipment like the rack, inverters, and wiring.
Learn more about the pros and cons of professional installations vs. DIY installations with our guide to solar installation.
The Average and State Costs of Solar Installations
To compare solar panel system costs between states, most photovoltaic data collectors use the cost-per-watt metric. This is a measurement of the total cost of the system divided by the total power output, which is in watts, of the combined solar panels. As mentioned before, the average solar installation in the US is about 5 kW, or 5,000 watts.6
Currently, the average cost per watt of a residential solar panel installation in the United States is $3.16 per watt.7 After tax credits, an average system size of 5 kW costs approximately $11,060, or $16,800 before rebates, tax breaks, and incentives.8 Total system cost decreases significantly after state and municipal incentives and local utility subsidies are applied.
States like California, Massachusetts, New York, and others offer financial incentives in the form of tax breaks and rebates for new solar panel installations or upgrades to existing installations. Your local utility may also offer incentives, sometimes subsidizing as much as 50% of the total system cost.9
To give you a better idea of what solar costs in different areas, we’ve collected data from the National Renewal Energy Laboratories for each state. Check out what we’ve found below.
Get a quote for solar installation costs in your area with our solar power calculator.
| Rank | State | Total Installations | Total Capacity (MW) | Avg. Cost Per Watt | Avergae System Cost Before reabtes (5kW) |
| 1 | California | 626,820 | 7378.81 | $6.27 | $31,350.00 |
| 2 | Arizona | 89,361 | 1647.18 | $5.14 | $25,700.00 |
| 3 | Massachusetts | 71,421 | 1941.27 | $5.27 | $26,350.00 |
| 4 | New Jersey | 51,046 | 2283.74 | $7.39 | $36,950.00 |
| 5 | New York | 51,005 | 575.34 | $5.56 | $27,800.00 |
| 6 | Connecticut | 23,643 | 248.61 | $5.35 | $26,750.00 |
| 7 | Nevada | 16,048 | 359.85 | $4.60 | $23,000.00 |
| 8 | Texas | 14,343 | 333.38 | $4.91 | $24,550.00 |
| 9 | Pennsylvania | 11,432 | 241.55 | $6.11 | $30,550.00 |
| 10 | Maryland | 11,419 | 183.95 | $6.14 | $30,700.00 |
| 11 | New Mexico | 8,356 | 187.71 | $5.89 | $29,450.00 |
| 12 | Missouri | 5,504 | 92.83 | $4.82 | $24,100.00 |
| 13 | Delaware | 5,119 | 94.28 | $5.89 | $29,450.00 |
| 14 | Oregon | 4,280 | 56.98 | $5.99 | $29,950.00 |
| 15 | New Hampshire | 3,501 | 33.77 | $4.61 | $23,050.00 |
| 16 | Wisconsin | 3,321 | 22.84 | $7.14 | $35,700.00 |
| 17 | Washington, DC | 3,296 | 19.16 | $6.39 | $31,950.00 |
| 18 | Florida | 2,984 | 135.96 | $6.88 | $34,400.00 |
| 19 | Colorado | 2,606 | 135.30 | $5.79 | $28,950.00 |
| 20 | Hawaii | 2,324 | 26.81 | $6.52 | $32,600.00 |
| 21 | Ohio | 2,261 | 138.67 | $6.85 | $34,250.00 |
| 22 | Vermont | 1,642 | 39.39 | $6.69 | $33,450.00 |
| 23 | Minnesota | 1,570 | 18.44 | $6.91 | $34,550.00 |
| 24 | Illinois | 1,483 | 27.95 | $6.74 | $33,700.00 |
| 25 | Indiana | 827 | 132.74 | $4.44 | $22,200.00 |
| 26 | Utah | 817 | 12.47 | $5.42 | $27,100.00 |
| 27 | Maine | 702 | 7.00 | $4.08 | $20,400.00 |
| 28 | Tennessee | 601 | 22.36 | $8.18 | $40,900.00 |
| 29 | Rhode Island | 583 | 18.81 | $4.34 | $21,700.00 |
| 30 | Louisiana | 345 | 2.15 | $8.30 | $41,500.00 |
| 31 | Michigan | 263 | 7.63 | $7.46 | $37,300.00 |
| 32 | Arkansas | 239 | 4.85 | $6.22 | $31,100.00 |
| 33 | Washington | 209 | 2.06 | $8.13 | $40,650.00 |
| 34 | Iowa | 206 | 4.15 | $4.21 | $21,050.00 |
| 35 | Wyoming | 157 | 0.21 | $8.31 | $41,550.00 |
| 36 | South Carolina | 132 | 0.64 | $9.27 | $46,350.00 |
| 37 | West Virginia | 92 | 1.14 | $6.86 | $34,300.00 |
| 38 | North Carolina | 75 | 56.26 | $6.94 | $34,700.00 |
| 39 | Mississippi | 71 | 0.76 | $5.17 | $25,850.00 |
| 40 | Montana | 61 | 0.30 | $8.06 | $40,300.00 |
| 41 | Virginia | 55 | 2.49 | $6.46 | $32,300.00 |
| 42 | Georgia | 53 | 6.09 | $5.83 | $29,150.00 |
| 43 | Idaho | 44 | 1.05 | $7.79 | $38,950.00 |
| 44 | Alabama | 32 | 3.14 | $7.57 | $37,850.00 |
| 45 | Kentucky | 31 | 3.30 | $5.15 | $25,750.00 |
| 46 | Kansas | 28 | 1.64 | $7.81 | $39,050.00 |
| 47 | Alaska | 22 | 0.12 | $6.47 | $32,350.00 |
| 48 | Nebraska | 17 | 0.28 | $7.15 | $35,750.00 |
| 49 | South Dakota | 16 | 0.28 | $5.90 | $29,500.00 |
| 50 | Oklahoma | 10 | 0.31 | $7.93 | $39,650.00 |
| 51 | North Dakota | 3 | 0.09 | $4.70 | $23,500.00 |
| Source: National Renewable Energy Laboratories (NREL) Open PV Project (https://openpv.nrel.gov/rankings) | |||||
Get a quote for solar installation costs in your area with our solar power calculator.
Factors That Affect the Overall Cost of Solar Panels
Labor costs and other soft costs are generally 64% of the solar panel installation cost, with panels and other hardware taking up the remaining 36% of the overall cost.10 But prices can vary according to several factors:
- Site conditions: The available roof space, roof angle, and obstructions like trees can all impact the quoted price from an installer. Ask the installer if they’ll provide information from similar projects they’ve completed in the past.
- Local incentives and subsidies: Federal, state, and local governments may all offer incentives, tax breaks, or rebates in your area. Check with your local installers to get the scoop on solar rebates to determine your final system cost.
- Installation fees: Not all solar installers provide the same level of service. Shop around to get the best price for your home. Remember to consider factors like customer reviews, certifications, and past projects when evaluating a solar installer—the cheapest bid may not be the best choice for a long-term investment like solar power.
- Solar panel quality: Premium solar panels last longer and produce more power than low-grade solar panels, but they come with a premium price. Consider your solar needs and budget carefully to determine the best compromise between cost and quality.
- Roof renovation: The weight of a solar panel array can be considerable. In some cases, a roof renovation or replacement is necessary before solar panels can be installed. Most installers have a good relationship with a roofing contractor, or they’re certified to do the job themselves.
Solar Financing
Despite their lucrative payoff over time, most homeowners don’t have several thousand in savings to buy their installation outright. Solar financing provides alternative options for homeowners looking to pay their system down over time, using the money they save on electricity. In addition, other arrangements like solar leases and Power Purchasing Agreements (PPAs) open doors for homeowners to go solar at every budget.
Solar Loans
Most installers are well-versed in solar financing options, including solar loans. Solar loans provide a payment plan with low interest rates for homeowners with good credit. These loans are great options for homeowners looking to own their installation instead of leasing them with an installer. As solar projects become more and more common, many banks and credit unions have begun offering special financing for solar installations.
Solar Leases and Power Purchasing Agreements (PPAs)
Many homeowners are happy to enjoy a discount on their electricity bill without owning their solar panel installation themselves. Under a solar lease or PPA, ownership stays with the solar installer, which sells a portion of the produced electricity back to the grid in the form of solar renewable energy credits (SRECs).
Homeowners who choose a PPA will never own their system and are not responsible for any maintenance costs over the PPA term. With a lease, you can sometimes purchase the installation at the end of the contract. Both of these alternative financing methods are helpful for homeowners who want to reduce the up-front cost of an installation.
Learn more about paying for your solar panels with our guide to solar financing options.
Take the Next Step
Solar system installation costs vary significantly across the country, but the trends are clear: solar is growing rapidly across the United States, with new installations almost doubling in 2016. If you’re ready to start investing in solar energy and a greener future, fill out our form to request a free quote, and talk to your local installation experts about available solar incentives in your area.
- EnergySage, “How Much Do Solar Panels Cost in the US in 2017?”
- EnergySage, “How Long Do Solar Panels Last?”
- EnergySage, “How Long Do Solar Panels Last?”
- EnergySage, “What Is the Power Output of a Solar Panel?”
- EnergySage, “How Much Do Solar Panels Cost in the US in 2017?”
- EnergySage, “How Much Do Solar Panels Cost in the US in 2017?”
- EnergySage, “How Much Do Solar Panels Cost in the US in 2017?”
- EnergySage, “How Much Do Solar Panels Cost in the US in 2017?”
- EnergySage, “Solar Panel Incentives, Rebates & Tax Breaks”
- Office of Energy Efficiency & Renewable Energy, “Soft Costs 101: The Key to Achieving Cheaper Solar Energy”
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How Much Do Solar Panels Cost in the US? was originally posted by Energy News That Matters
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