The average price of solar panels, including materials and professional installation, is $20,000. Most homeowners will pay $15,000 – $26,000, but some will pay as little as $5,000 or as much as $50,000. The typical cost per watt, including materials and labor, is $2.50 – $3.50, and the panels alone typically cost $0.70 to $1.50 per watt.
Most Americans consider solar panels an investment, not an expense, because solar panels:
- Reduce energy costs
- Qualify for tax credits and government incentives
- Increase home value
- Sometimes generate an income stream
In this price guide:
- Average Costs
- Cost Estimator by Size
- Other Factors That Affect Cost
- Related Services
- DIY Cost
- Cost by Location
Average Solar Panel Costs in 2022
|National Average Cost||$20,000|
|Typical Price Range||$15,000 – $26,000|
|Extreme Low-End Cost||$5,000|
|Extreme High-End Cost||$50,000|
The total cost of installing a solar power system includes:
- Materials (Solar panels, inverters, racking/mount, battery/grid connection)
- Operational costs (Permits, monitoring, connection fees, marketing)
- Installation (Labor)
Solar panels are about 25% of the total cost of a solar energy system, and the total cost of materials makes up about half the price. Installation labor costs are about 10% of the total price and operational costs make up about 40%.
Solar Panel Cost Estimator by Home Size
The U.S. measures electrical energy in watts; thus, most solar systems are sold by kilowatt and priced by watt (1 kilowatt = 1,000 watts). The average solar panel system is $2.50 to $3.50 per watt, and the average cost of solar panels alone is $0.70 to $1.50 per watt.
All else equal, the more watts you need, the more solar panels you will need. However, panels vary significantly in size, wattage, and efficiency.
Although home size affects energy consumption, many more factors are in play. The best way to estimate wattage is to look at recent electric bills. However, the table below provides a rough estimate based on the number of bedrooms in a home. It accounts for average square footage and the likely number of residents.
|Project Size||Average overall cost|
|2 Bedroom House||$5,000 – $28,000|
|3 Bedroom House||$15,000 – $40,000|
|4 Bedroom House||$20,000 – $50,000|
Other Factors that Affect Cost
Estimating solar panel costs can be confusing because so many factors are at play. But there is no need to fear; LawnStarter is here to break it down in simple terms.
Other factors include:
- Energy Use
- Solar Panel Type
- Solar Panel Brand
- Tax Credits and Incentives
- Roof Characteristics
- Financing Options
- Installation Company
- Grid-Tied vs Off-Grid
- ROI (Return on Investment)
Energy consumption is the most significant factor in pricing solar panels. The more energy your household consumes, the more watts you need to power your home. The average American household uses about 10,500 kilowatt-hours (1 kWh = 1,000 watts per hour).
A family of five living in Miami who runs web servers from their home and keeps their house at 50°F will need a lot of solar power. In contrast, a family of two living in Miami who only uses common household appliances and keeps the house at 80°F will require much less power.
When pricing solar panels, check your energy bills to see how much electricity your household consumes. Once you know your energy needs, estimating solar panel installation cost is much easier.
Solar Panel Type
There are three main types of solar panels– monocrystalline, polycrystalline, and thin film.
|Solar Panel Type||Typical price per watt|
|Monocrystalline||$0.90 – $1.40|
|Polycrystalline||$0.70 – $1.00|
|Thin film||$0.60 – $1.00|
Monocrystalline solar panels are made by cutting a single source of silicon into wafers. The panels have a smooth black appearance that most homeowners prefer over the polycrystalline look.
|✓ Highest efficiency rate* (20%)|
✓ Long life span (25-30 years)
✓ Space saving
✓ Aesthetically appealing
✓ Works well in low light
*Note: Efficiency rate is the percent of sunlight that is converted into electricity.
Polycrystalline solar panels are made by melting multiple pieces of silicon together. As a result, they are blue and often contain swirls of discoloration.
|✓ Good efficiency rate (16%)|
✓ Less expensive than Monocrystalline
✓ Long life span (25-30 years)
|✗ Less efficient than monocrystalline|
✗ Not aesthetically appealing
Thin film solar panels are made by putting a thin layer of PV material on glass, plastic, or metal. They are the least efficient but most budget-friendly option.
Less efficient panels take up more surface area, so people use thin film when system size isn’t an issue, but system cost is. For example, a utility company may have many acres of space to install panels. Since they also need a lot of power, the thin film saves them a ton of money.
|✓ Least expensive option|
✓ Aesthetically appealing
|✗ Low-efficiency rate (10%)|
✗ Shortest life span (15-20 years)
Solar Panel Brand
The price of cars, bedsheets and just about every consumer product partially depends on the brand. Solar panels are no different.
Factors that influence a solar company’s price include:
- Manufacturing location
- Economies of scale
- Manufacturing efficiency
The table below shows the typical price range by brand for a 6 kW system.
|Brand||Typical Price Range|
|CertainTeed||$14,580 – $17,280|
|Hyundai||$14,880 – $21,360|
|Mission Solar||$13,500 – $16,140|
|Panasonic||$14,640 – $18,240|
|S-Energy||$15,000 – $23,520|
|Solaria||$14,820 – $18,780|
|SunPower||$18,480 – $21,120|
|Tesla||$10,500 – $17,520|
Tax Credits and Incentives
Americans are increasingly concerned about renewable energy, climate change, and the impact of our carbon footprint. As a result, federal, state, and local governments have solar incentives that support clean energy by reducing solar panel installation costs.
Federal Solar Tax Credit
The federal government offers a significant tax credit to eligible homeowners who install solar panels from January 1, 2017 – December 31, 2034. People sometimes call this an investment tax credit (ITC) because:
- Solar panels are seen as an investment.
- It reduces your taxes by the tax credit amount.
Please see the federal solar tax credit rates in the table below.
|Year Installed||Tax Credit|
Say you spend $10,000 installing solar panels in 2023. You will get a $3,000 tax credit.
Tax credit = 10,000 x .3 = 3,000
Many states and cities have solar panel incentives. These incentives include:
- State income tax incentives
- Rebate programs (usually filled with utility companies or local governments)
- Low-interest loans
- Reduction in property tax
- Solar RECs (SRECs) and Performance-based incentives
- State sales tax exemptions
Roof characteristics such as roof space, pitch, and the direction it faces also affect your total cost by influencing:
- The type of solar panel you can use
- The efficiency of each solar panel
- Labor costs
The best direction for your roof to face is south, but east and west-facing roofs often work just fine.
The cheapest way to purchase solar panels is by paying cash upfront. But unfortunately, most of us don’t have an extra $20,000. As a result, there are several solar panel financing options. If you, like most Americans, plan on financing your system, your interest rate and financing terms will also contribute to the total cost.
If you don’t have thousands of dollars lying around, a solar loan is your best option. Many people can purchase a system with no money down and a reasonable interest rate. These loans include:
- Government-sponsored loans
- Personal loans
- Home equity loans
- Solar panel company’s in-house financing
When choosing a lender, look at the annual percentage rate (APR), the length of the loan, origination fees, upfront costs, and other loan terms.
Just like furniture and household appliances, leasing is the most expensive option. Instead of owning the panels, you rent them. Unfortunately, this means you are always paying and never gaining any equity.
Solar Power Purchase Agreement (SPPA)
A power purchase agreement is similar to leasing because you do not own the solar panel system. Instead, a third party pays for the installation and owns the system that the homeowner hosts on their roof. In return, the homeowner purchases solar electricity from the system’s owner.
It is best to get several estimates because companies charge different rates, and you want a competitive price. Although you don’t want to get ripped off, you probably shouldn’t look for bargain basement prices either.
When choosing a solar company, here are some things to consider:
- Are they experienced? (At least 3 years)
- Did they pass the NABCEP (North American Board of Certified Energy Practitioners®) test?
- Are they licensed?
- Are they insured?
- What warranties do they offer?
- Do they have a good reputation?
Grid-tied vs Off-Grid
Grid-tied systems connect to the local power grid. Benefits of grid-tied systems include:
- Cheaper price tag
- Access to a utility company for backup energy
- Can often sell electricity back to the energy company in exchange for bill credits
On the other hand, off-grid systems don’t connect to the power company, so they must handle all the household’s energy production needs. As a result, they increase costs in two ways:
- The solar system must be big enough to cover the household’s energy usage (average electricity use as well as spikes and fluctuations).
- Without the utility company as backup, you must purchase your own backup system (generator or battery storage).
The average off-grid system costs $30,000 to $60,000. Although these systems are expensive, some people value energy independence and want to live off the grid.
Solar Panel ROI (Return on Investment)
Residential solar panel systems are increasingly popular due to their environmental benefits and cost savings. However, homeowners often are unsure how long it will take to get a return on their investment. So first, let’s look at the factors that affect ROI:
- Tax incentives: Federal, state, and local governments offer incentives.
- Utility bill savings: Most homeowners with solar panels pay little or nothing to their electric company.
- Net Metering: Many homeowners can sell excess solar energy to their electric company.
- Increased home value: Solar panels are attractive to potential home buyers
You can calculate estimates for all the factors above, to figure out the payback period (how long it will take to get your money back). The average payback period is six to ten years.
Now, let’s talk turkey. Most Americans live on a budget and are more concerned with their net monthly bills than long-term financial gains. Since most Americans also finance their solar power system, their question is- how does my monthly loan payment compare to my monthly savings?
To estimate the short-term change in your monthly bills:
- Look at your monthly electric bills. Pay attention to your average monthly cost and the average monthly energy consumption.
- Figure out which solar power system you plan to buy and the financing option you will use.
- Estimate how much of your electricity needs the panels will cover. Talk to the solar system provider and do your research.
- Do a home energy assessment.
- Estimate how much money you will save on electric bills.
- Subtract your monthly utility savings from the monthly loan payment.
Average monthly electric bill: $200
Estimated reduction in grid dependency: 90%
Estimated monthly loan payment: $225
$225 – ($200 x .9) = $45
In the short term, your monthly bills will increase by $45, but this is before you receive any incentives. So next, calculate how much money you will receive from tax credits, rebates, and other incentives. If you can swing an extra $45 a month until you recoup the entire cost, it probably makes sense to purchase a system.
Your roof must be in good shape to install solar panels, so you may need maintenance and repairs before the installation.
The typical cost of new shingles is $128 – $190 per square or $1,250 – $5,700 per project.
|National Average Cost||$159 per square|
|Typical Price Range||$128 – $190 per square|
|Extreme Low End Cost||$96|
|Extreme High End Cost||$208|
The typical cost of roof cleaning is $375 – $600, and most roofs require cleaning about once a year.
|National Average Cost||$500|
|Typical Price Range||$375 – $600|
|Extreme Low End Cost||$200|
|Extreme High End Cost||$1,000|
Any needed roof repairs should be completed before installing a solar system and the average roof repair costs $350 – $1,150.
|National Average Cost||$750|
|Typical Price Range||$350 – $1,150|
|Extreme Low End Cost||$140|
|Extreme High End Cost||$4,350|
On average, a new roof costs $8,000 – $21,000, with an average price of $14,500.
|National Average Cost||$14,500|
|Typical Price Range||$8,000 – $21,000|
|Extreme Low End Cost||$3,000|
|Extreme High End Cost||$75,000|
Instead of installing solar panels, some consumers prefer a solar roof. The average cost of a solar roof is $49,000.
|National Average Cost||$49,000|
|Typical Price Range||$40,000 – $60,000|
|Extreme Low End Cost||$15,000|
|Extreme High End Cost||$75,000|
A typical roof replacement costs $5,700 to $11,200.
|National Average Cost||$8,450|
|Typical Price Range||$5,700-$11,200|
|Extreme Low End Cost||$2,500|
|Extreme High End Cost||$40,000|
Not sure if your roof needs replacing? The table below estimates how long each type of roof lasts.
|Roof Type||Typical Life Span|
|Asphalt Shingles||15-30 years|
|Wood Shingles||20-25 years|
|Rubber roofs||30-50 years|
|Metal roofs||50-75 years|
Cost of Installing Solar Panels DIY
Installing solar panels is complex and requires some know-how. Furthermore, the installation requires a government inspection, so you can’t cut corners. Therefore, before attempting this project, make sure you have some knowledge about:
- Household electrical systems
- Working on roofs
- Basic handyman skills (e.g., installing lag bolts)
- Solar panels
You may want a DIY solar panel kit if you meet the above requirements. They typically cost $2,000 – $20,000 or $1.00 – $1.50 per watt. These kits include everything you need to install the panels.
How to Install Solar Panels in 8 Steps
Here are the eight essential steps to installing a solar system.
Step 1: Needs assessment
- What do you want to gain from your system?
- How much solar power will you need?
- What can you afford?
Step 2: Select a solar system type
- What type of panels?
- Grid-tied or off-grid?
Step 3: Research laws and regulations
- What does your HOA require?
- What does your state require?
- Are there any city or county guidelines?
Step 4: Select your DIY solar panel kit
You may want to wait for permit approval to make the purchase or carefully research the return policy.
Step 5: Design the system
Design your solar systems using the information you gathered in steps 1-3. Some DIY kit companies will help you with this step because it is difficult to complete.
Step 6: Apply for permits
Your research in step 3 should have uncovered the needed permits and permissions. You will probably have to submit your system design for approval.
Step 7: Install the system
Once your permits get approved, you are ready to install the panels. Your DIY kit should include instructions. Please read them carefully.
Here are the basic steps:
- Install racking and mounting
- Connect microinverters
- Connect copper wire
- Drill a hole in the roof
- Install the junction box
- Install panels
- Connect the system to your house
Step 8: Pass inspections
After construction, you have to pass a government-mandated inspection.
If you found the above process confusing, you probably don’t have the existing knowledge to install solar panels correctly.
DIY Cost vs. Professional Cost
Although the average cost of a DIY solar system kit is less than that of a professional installation, the difference isn’t significant enough to outweigh the potential risks.
|DIY Kit||$1.00 – $1.50 / watt|
|Professional Installation||$2.00 – $2.50 / watt|
If you don’t have the proper knowledge and experience, you risk:
- Not passing inspections
- Not getting permits approved
- Damaging your roof
- Hurting yourself
- Loss of solar efficiency
- Damaging materials
Mistakes made during installation can cost you a lot of time and money. We recommend hiring a professional solar installation company.
Cost of Solar Panels by Location
Your geographic location influences the cost of solar panels. Local factors include:
- Local demand
- Amount of sunshine
- State and local incentives
States with a higher demand for solar panels tend to have higher prices. According to the Solar Energy Industries Association, California, Texas, and Florida are the states with the most solar panel installations. However, these are also states with a lot of sunshine.
Amount of Sunshine
The more sunshine your state gets, the more bang you get for your buck when purchasing solar panels.
According to the World Population Review, the sunniest states are:
- New Mexico
And the least sunny states are:
- New Hampshire
- New York
- North Dakota
State and Local Incentives
The table below shows popular types of incentives by state.
|Income Tax||Rebates||Performance Payment||Property tax||Sales tax|
|District of Columia||✗||✓||✓||✓||✗|
Some states have types of incentives that aren’t in the table above. You can check your state’s incentives in the Database of State Incentives for Renewables & Efficiency.
Additionally, many cities and utility companies offer incentives. For example, Mississippi, Virginia, and Texas don’t have solar rebate programs. However, many local governments in Texas offer rebates, and several residents in Mississippi and Virginia can claim rebates through Tennessee Valley Authority.
FAQ on Solar Panels
How much is one solar panel?
The cost of a single solar panel depends on the type of solar panel and the number of watts. Typically you can expect to pay $150 to $550 for one solar panel.
Are solar panels worth it?
In most cases, solar panels are more than worth it. Benefits include:
- Reducing energy costs
- Reducing your carbon footprint
- Increased property value
- Helping the community with excess energy
It usually doesn’t take long to make a return on your investment. However, solar panels might not be suitable for you if your home doesn’t get a lot of sunlight.
Are there any disadvantages to solar energy?
In most cases, the pros outweigh the cons, but there are disadvantages to solar energy:
- Energy is only generated in the sunlight, so a backup energy source is needed. Furthermore, houses that don’t get a lot of sunlight can’t properly utilize the technology.
- Purchasing a system often requires an upfront cost or a short-term loss in income.
- If you need a large amount of energy, you’ll need a lot of space to accommodate the solar panels.
- Although solar energy is much cleaner than traditional sources, it still impacts the environment. Transporting solar panels leaves a carbon footprint, and toxic chemicals are used in manufacturing.
Do solar panels impact homeowners’ insurance?
Many homeowner’s insurance plans already cover solar panels, so no extra insurance is needed. However, in some cases, you may need to purchase additional insurance. Some people also report a rise in premiums after installation. Therefore, it is best to contact your provider before buying a system.
Solar panels provide many benefits to homeowners, including reducing energy costs and helping the environment. Fortunately, most people recoup their costs in less than ten years. Contact a solar panel professional near you to start saving money and helping your community.