What Is the Cost of Solar Panels?

Installing solar panels lets you harness the power of the sun to save on energy costs. The typical cost of solar panels ranges between $17,000 and $34,174, with the national average at $25,633.

By Katie Flannery | Updated Jan 26, 2023 2:49 PM

We may earn revenue from the products available on this page and participate in affiliate programs.

Cost of Solar Panels

Photo: istockphoto.com

  • Typical Range: $17,000 to $34,174
  • National Average: $25,633

There are plenty of good reasons to install solar panels on your home: lower utility bills, a significant return on investment, tax breaks, and a reduced carbon footprint. But what is the investment? According to HomeAdvisor and Angi, the cost of solar panels runs between $17,000 and $34,174, with the national average at $25,633. This comes out to $2.50 to $3.50 per watt, where most solar power systems range from 3kW (kilowatt) to 10kW on average.

Expect to pay from $.70 to $1.50 per watt for solar panels for home use. Labor costs—typically up 15 percent of the overall cost—can average around $.50 per watt, and the price can vary widely due to differences in system sizes. Prices for solar roof panels ultimately depend on your location, the labor involved, permit and inspection fees, and the type of solar panel system installed, all of which we’ll detail ahead. Many homeowners consider the investment cost of solar panels worth it given the savings and benefits from channeling the sun to power your home, but keep reading to decide for your own household.

Factors in Calculating Cost of Solar Panels

Cost of Solar Panels Factors in Calculating the Cost

Photo: istockphoto.com

Calculating the cost of solar panels involves several factors. Prices can differ due to location and how much energy is needed to power heating and cooling units. Whether solar panels are installed on the roof or on the ground will also change the installation and labor costs. Additional factors include permit and inspection fees, on-grid vs. off-grid systems, the size and type of solar panel system, equipment, and operational costs.

Geographical Location

Geographical location is a significant factor when determining the cost of solar panels. Solar panels work in every area of the United States, but where you live makes a difference with how much direct sunlight you need to power your home. Solar panels can cost more depending on the region due to the overall cost of electricity, available tax incentives, and the maximum number of sunlight hours in that area. Search “solar installers near me” to get an accurate estimate of how much a solar panel system will cost in your area.

Installation and Labor

Solar panel installation averages $2.50 to $3.50 per watt. Geographic location, the location of the solar panels, and the type and size of the system will determine the installation and labor prices. The average labor cost is around $.50 per watt and can vary due to the size and location of the solar panel system. On average, installation permits and labor costs make up approximately 35 percent of the price to install solar panels.

Start saving energy today
A pro can install solar panels for you. Get free, no-commitment estimates from experts near you.

Permits and Inspections

Required permit prices can vary depending on city and state ordinances. Plan on permit and inspection fees to take up 3 percent of the overall budget. These prices are usually rolled into the overall cost of an installation estimate. On average, permit and inspection costs around $.06 per watt or between $360 and $600.

On-Grid vs. Off-Grid Solar Power Systems

When installing a solar panel system, on-grid or off-grid systems are available. An on-grid system will reduce your dependency on the power grid but not eliminate it. The more panels you install, the lower your energy costs will be. With an on-grid system, if you produce more energy than you use, it will be sent to the power grid, and you’ll receive a credit on your energy bill. On average, the cost of an on-grid system ranges from $15,000 to $21,000. Off-grid systems need to be large enough to produce the energy that you need to power everything in your home. In this case, you will also need to install batteries and generators since there is no option for extra energy to be provided by the grid. The average off-grid system costs between $30,000 and 60,000.

Roof vs. Ground-Mounted Solar Power Systems

Roof-mounted solar panels typically cost between $15,000 and $21,000 for a 6kW system. A roof-mounted system costs less to install than a ground-mounted system, although this type of system is more difficult to access for maintenance and cleaning. A ground-mounted system can run from $18,000 to $25,000 for a 6kW system. This is a good option if you have a roof that cannot support the weight of solar panels or if your roof is shaded and doesn’t receive adequate sunlight. Ground-mounted systems take up space in your yard but are easy to access for maintenance and cleaning.

Type and Size of Solar Panels

There are three types of solar panel systems that differ in price and efficiency: monocrystalline, polycrystalline, and thin film. The size of the solar panel system also affects the cost of installation. Choose the system size according to how much energy is needed to power your entire home. This depends on the age and size of the house, yearly energy usage, and geographic location. The average system size can range from 2kW to 10kW.

Want to install solar panels?
Top pros in your area are ready to help. Get free, no-commitment estimates from experts near you.


Almost half of the solar panel budget will go to equipment fees. This includes the solar panels, batteries, mounting hardware, inverter, metering tools, cables, and wiring. The larger the system, the more equipment is needed for installation. If you choose to use batteries to store energy in case of emergencies or are living off the grid, this will also up the costs. The number of batteries will depend on how much sun you receive and how much power your home needs.

Operational Costs

Operational costs include maintenance, monitoring, and inspections. The average costs related to solar panel maintenance and repair range from $200 to $1,200, depending on the service needed. Solar panels require regular cleaning and inspections, and annual inspections can range from $100 to $150.

Cost of Solar Panels Additional Costs

Photo: istockphoto.com

Additional Costs and Considerations

When budgeting to cover the cost of solar panels, there are usually additional factors and considerations. These include the roof, the number of sunlight hours, energy-saving incentives, electricity use, and financing options.

Size, Shape, and Condition of the Roof

The size and shape of the roof will directly affect the cost of solar panels. A smaller roof may not accommodate the number of solar panels needed to provide the required energy. Labor costs can vary because of the roof’s pitch and size, and the type of mounting equipment and materials will depend on the size, shape, and condition of the roof. Before installing solar panels, make sure the roof is in good condition; solar panel removal and reinstallation can be costly.

Shade and Sunlight Conditions

The amount of shade or sunlight your home receives impacts installation costs. Sunny areas need fewer panels, while shadier ones require a larger solar panel system. How much sunlight the panels absorb affects the overall cost of the system and utility bill savings. Sunnier locations have a higher energy output. In the northern hemisphere the sun is always in the southern sky, so it’s ideal to put solar panels on a south-facing roof for maximum exposure. However, solar panels can be installed in other directions with variable energy production.

Federal and State Incentives

The Energy Policy Act of 2005 ensures that homeowners can deduct up to 26 percent of a solar panel system’s price and installation costs. This investment tax credit (ITC), along with state and local incentives, increases homeowners’ potential savings when switching to solar. Some gas and electric companies offer 10 to 20 percent rebates on installation costs. Combining the federal and state incentives, homeowners can save upward of 50 percent on the cost of solar panels. You’re only eligible for these incentives if you purchase the panels, though—not if you lease them.

Solar is more affordable than ever.
Get solar panels installed today. Get free, no-commitment estimates from experts near you.

Electricity Use

The overall cost of solar panels depends on how much electricity you use daily. If you have high energy usage, you’ll need more panels and a larger system to accommodate your needs. The more electricity you use, the more it will cost to install the solar panel system.

Financing Options

Financing is an option when budgeting for the cost of solar panels. By taking out a loan, you may end up paying more than if you paid for the solar panels upfront. Weigh your options and evaluate installation estimates with financing details. Many companies also offer the option for solar leasing, where you lease the solar panels (much like you would a car) for a certain length of time, usually about 25 years. The main difference between financing and leasing is that with leasing, a third party owns them. With financing, you own the panels and you’re eligible for federal and state incentives. Some pros warn against leasing, especially if you plan to sell your home before the end of the lease. If you choose financing, check for options through credit unions and local lenders and make sure to ask if they’ll put a lien on your home. This can make refinancing in the future challenging.

Cost of Solar Panels Types

Photo: istockphoto.com

Cost of Solar Panels Types

The type of system installed influences solar panel cost. Each type has its advantages and efficacy. To help guide your decision, here are the three common types of solar panels for home use.


Monocrystalline solar panels cost from $1 to $1.50 per watt. These space-saving panels are considered the most efficient. They’re made from solar cells constructed from whole silicon crystals. Because of this single-cell structure, the electrons that generate electricity have more room to move and create more power per cell. Monocrystalline panels are long lasting and usually come with a 25- to 35-year warranty. Monocrystalline panels typically have a black hue.


Polycrystalline solar panels can run from $.70 to $1 per watt. These panels use crushed-up fragments of silicon, which results in a lower price point than monocrystalline panels. While these panels are a budget-friendly option, they aren’t as efficient as monocrystalline panels. This is because the crushed silicon gives the electrons less room to move, meaning slightly less energy production. Polycrystalline panels may also be advertised as multi-crystalline. These panels usually have a blue hue instead of the black hue like monocrystalline panels. Polycrystalline panels have the same lifespan as monocrystalline panels

Thin Film

Thin-film solar panels average from $1 to $1.50 per watt. Thin-film panels are the most popular option since they’re flexible, lightweight, and versatile. They’re easy to mount and take less time to install, which cuts down on labor costs. However, they’re not as efficient, and more panels are required to power a home compared with the crystalline alternatives. On average, these panels also have a shorter lifespan—14 to 17 years. They can be made from an array of photovoltaic materials organized into a thin film on a panel and layered with metal and glass or plastic. Thin-film panels might be a better choice for hotter, sunnier climates like deserts as they don’t lose as much efficiency when temperatures rise. Cadmium telluride (CdTe) is the most popular and efficient choice for thin-film solar panels, but cadmium is a highly toxic element. While there’s no harm in using these panels, ensure that they’re handled by a professional and recycled properly at the end of their lifespan.

Cost of Solar Panels: Is It Worth Getting Solar Panels?

When you install solar panels, you can save between $650 and $1,500 annually on energy costs. Solar panel systems can produce electricity that is 30 percent cheaper than paying for it from a utility company. Not only can you save money by installing solar panels, but you can also reduce your carbon footprint, receive tax breaks, and earn a significant return on investment for your home. For most homeowners, solar panels are worth the installation cost.

Reduced Carbon Footprint

If you’re interested in transforming your home into a green-living sanctuary, installing solar panels is a step in the right direction. A solar panel system has the potential to reduce a home’s carbon emissions by up to 80 percent compared to fossil fuels. By powering your home with a renewable energy source, you can achieve peace of mind by knowing you’re not contributing to the use of nonrenewable fossil fuels and harmful greenhouse gas emissions.

Lower Utility Bills

Even though the upfront cost of solar panels may be high, there is an advantage of saving on utility bills after installation. A solar panel system can cut utility bills by up to 50 percent. If you own your home for 25 years, that could add up to a savings of $15,000 to $40,000. If your home happens to use less power than your panels produce, the energy will be routed to the rest of the power grid and you may receive a credit on your energy bill.

Tax Breaks

You can save even more money with federal and state tax breaks. Federal investment tax credit allows homeowners to save up to 26 percent on installing a solar panel system in their homes. Some states provide a tax credit of 25 percent, and others offer a permanent tax exemption for solar goods for the home.

Increase your home's worth and save on your electricity bill.
Solar panels are worth the investment. Get free, no-commitment estimates from solar panel installation experts near you.

Return on Investment

The size of the solar panel system and the local cost of electricity will affect the return on investment (ROI). Most homeowners find that the solar panels will pay for themselves within 7 to 10 years. By taking advantage of local and federal incentives and tax breaks, your ROI may not take as long.

Cost of Solar Panels: DIY vs. Hiring a Professional

When you consider that solar panel installation can cost between $2,000 to $20,000 for the panels alone, you may not save very much money by doing it yourself. Professionals can buy high-quality materials directly from the manufacturer and get lower prices than a homeowner. A professional has the knowledge and experience to develop a solar panel design, know all about the tax credits, and navigate the permit-pulling process. Additionally, the solar panel manufacturer may require the panels to be installed by a professional in order for any warranties to be valid. In general, it is well worth leaving the highly technical solar panel installation to the professionals.

How to Save Money on the Cost of Solar Panels

The cost of solar panels can be expensive, and the additional costs associated with the project can quickly add up. One way to save money on the cost of solar panels is to install the least expensive panels, but there are other ways to save money without skimping on quality.

  • Get multiple quotes. By shopping around different solar companies, you can find the right price for you and your budget. A good way to find a professional is to search for “solar providers near me.”
  • Look for incentives. Federal and state tax breaks along with utility company discounts and incentives for installing solar panels can increase your overall savings.
  • Use the PACE Program. The Property Assessed Clean Energy (PACE) model is a program that enables homeowners to finance the costs of improvements, including solar panels, and pay back the costs via a property assessment.
Cost of Solar Panels FAQs

Photo: istockphoto.com

Questions to Ask About the Cost of Solar Panels

Asking a solar panel installation professional the right questions can help minimize miscommunication, save money, and get the right solar panel system for your home. Here are some questions to ask about the cost of solar panels.

  • What licenses do you have?
  • Do you have references?
  • What warranties do you offer?
  • What size solar panel system do you recommend for my home?
  • How can I take advantage of tax breaks and incentives?
  • How much can I expect to save?


Deciding on the right solar panel system while keeping the cost down can be a daunting process. Here are some frequently asked questions about the cost of solar panels to help guide you in your decisions.

Q. Is it expensive to install solar panels?

The average size 5kW solar panel system can run between $15,000 and $18,200 to install, and larger systems will cost even more. The savings, increased home value, and ROI outweigh the upfront costs.

Q. How much energy can I save with solar panels?

The average yearly savings on energy costs are between $650 to $1,500. Most homeowners save up to 50 percent on their monthly energy bills.

Q. How long will my solar panels last?

Solar panels can last up to 25 to 30 years with proper maintenance and cleaning.

Q. Do solar panels work at night?

Solar panels do not generate power at night. They need sunlight to function.

Sources: HomeAdvisor, Angi, Nerdwallet, HomeGuide, Fixr, Investopedia, Modernize, Thumbtack

Find trusted local pros for any home project