How Much Do Solar Panels Cost? [2025 Data]

Going solar can be an outstanding investment, not just for increased sustainability and environmental friendliness, but also for your wallet. A properly-sized solar array can drastically reduce your carbon footprint and can come close to eliminating your electric bill, providing substantial utility bill savings over time.

The average cost of installing a 7.6kW solar system on your roof is $23,100 before any incentives or tax credits, and most homeowners pay somewhere between $19,100 and $23,800. Prices vary widely based on factors like the size of the system you need, the quality of the equipment you choose, how you pay for your system, any add-ons you choose, and more. Your location and access to local incentives can also have a major impact on your all-in costs.

Cost of Solar Panel Installation

Solar Panel Installation Cost Breakdown

A lot goes into pricing solar energy systems, and while the panels themselves can be expensive, they only make up an average of 12% of your total. You’ll also need to consider costs for other equipment, soft costs, and the cost of labor in your area.

In terms of equipment, you’ll need the solar panels, of course, but your installer will also charge you for inverters or microinverters, which convert the DC energy your panels produce into usable AC electricity, racking equipment to mount your panels, and wiring to connect the panels in series and to your home.

Soft costs include permit fees, inspection fees (if applicable in your area), interconnection fees (if your utility company charges for interconnection), and installer overhead and profit.

*calculated for a 7.6kW solar system

Solar Panel Cost by System Size

One of the biggest cost factors for your solar panel installation is the size of the system you have installed. System size is measured in kilowatts (kW) and is determined by household energy consumption. The average cost per watt is $3.04, but larger systems often have a lower cost per watt.

You can use the table below to get a rough estimate of your system costs if you know what size system you need. However, it's important to understand that accurate system sizing is crucial, as an improperly sized system can lead to either insufficient energy production or unnecessary upfront costs. 

Sizing depends on many factors, including consumption habits, home energy efficiency, the climate in your area, your roof size, and even the direction your home faces. You should always hire a professional to determine what size solar array you need, but you can also use the National Renewable Energy Laboratory’s (NREL) calculator for a good estimate on system size.

Average Cost of Solar Panel Installation by Location

Residential solar panel installation costs vary widely from state to state, in large part because different climates come with varying electricity rates and demand, and exposure to sunlight, both of which affect the size of the home solar system you need and the overall cost.

Solar panel installation costs can even vary among different cities within each state for a few key reasons. Things like local labor costs play a big role, but local incentives from cities or specific utility companies, permit fees, and localized supply and demand for solar equipment and labor can swing your costs up or down.

Key Factors Affecting Solar Panel Installation Cost

As mentioned above, the size of your home is usually the most important cost factor to consider when estimating solar panel installation costs. However, there are many other things you should think about to get an accurate estimate. We’ll explain each of the primary factors below, but keep in mind that you should always discuss these with a professional to ensure you get the right system for your home and energy needs.

Home Size

The size of your home plays a crucial role in how much energy you need to heat and cool the interior, and electricity demands for appliances, lighting, and other electronics also scale with home size. The bigger your home, the larger your solar system you’ll need to offset your energy consumption, and the higher your installation costs will be.

Factors such as the number of people using electricity in your house, the consumption habits of your household, and the energy efficiency of your property will all play a role how your home size affects system size and costs. A professional solar installer can gauge your required system size and costs based on all of these factors.

Climate

The climate in your area is also important to think about, and there are many ways it can affect your system size requirements and installation costs. In hotter climates, energy costs tend to be higher due to air conditioning usage. In colder climates, installation costs are usually lower because most homes use natural gas, oil, or propane for heat and have lower cooling requirements that use electricity.

The sun exposure in your area can also affect system sizing and your solar panel prices. In areas like Arizona that see twice the sunny days per year, system costs can be lower than you might expect in such a hot climate where AC usage drives up electricity consumption. Conversely, a homeowner in Seattle may need to upsize their system to account for the frequent cloud coverage and rainy weather, which decreases solar power production.

Type of Panel

When considering the types of solar panels for your home, most residential solar projects make use of monocrystalline solar panels, which have the highest efficiency and are suitable for generating solar power for an entire home. This is the most expensive type of panel, as the use of a single silicone crystal for sunlight absorption increases manufacturing costs. There are different types of monocrystalline panels, including TOPCon and PERC technologies, which can increase costs even further.

Polycrystalline panels have lower efficiency ratings and may only be suitable for small-scale solar applications, but the manufacturing process uses small shards of silicone adhered together, which makes the panels more affordable. Thin-film solar panels are the most affordable. They use other photovoltaic (PV) materials rather than silicone. They’re flexible and significantly thinner than traditional panels, so they’re suitable for use on RVs, boats, and other very small solar applications. However, they have the lowest efficiency and generally won’t produce enough energy for an entire home. We recommend speaking with a professional about the best solar panels for your home.

Roof and Home Characteristics

Your roof style and orientation can affect how many panels you can and should install. In the U.S., panels on southern-facing roof faces will generate the most electricity, so homes that don’t face due south may need more panels to meet their energy needs, which means a higher installation cost. More complex roof styles with dormers and cross-gables may not be able to fit the required number of panels, which could mean a lower installation cost but also reduced savings in the long run.

Add-ons

Add-ons like solar batteries and EV chargers add utility to your solar array but can also add thousands to your installation costs. Solar batteries can cost anywhere from $7,000 to $18,000 or more, with an average price of $15,000 for an average-size home. Adding an EV charger to your system can bump up your solar panel installation costs by between $600 and $2,000. Note that the investment tax credit currently applies to these add-on costs, too, so effective costs could be up to 30% lower if you can take the entire credit.

Purchasing Method

How you plan on paying for your panels can affect both your upfront and long-term costs. Generally speaking, paying in cash will yield the lowest costs because you’ll avoid interest, and you’ll see the shortest payback period because you’ll begin seeing net savings the soonest. Using a solar loan will bring down upfront costs, but you’ll end up paying significantly more over time in interest.

Note that some less reputable installers charge origination fees that can further increase the cost of a financed system, and others charge higher fees for systems purchased with cash to maximize profit.

The Installer

Finally, the installer you choose will affect the cost to go solar. Labor charges vary among installers, but profit and system design fees can contribute to differences in pricing, too. Many installers also only offer specific panel, battery storage, and EV charger brands, and since materials can vary by brand and brand quality, they can also create pricing differences among different solar panel installation companies.

Solar Incentives & Savings 

Solar is expensive, but incentives like tax credits, rebates, and production perks can all bring down your upfront costs and help increase your net savings over time. Solar incentives are a crucial part of making solar affordable, so make sure you take advantage of all of the savings you can.

We’ll include some of the more common incentives below, but you can also speak with your installer about local incentives or check the Database of State Incentives for Renewables and Efficiency (DSIRE) for more information for your area.

• Federal Solar Tax Credit (also known as Investment Tax Credit or ITC): The ITC is one of the most valuable incentives for people going solar. It lets you reduce the income taxes you owe by up to 30% of your total solar panel installation cost, including labor and add-ons. If you can’t take the full credit in the year you go solar, you can take it in pieces over five years. Just note that this credit will no longer be available for systems installed after 12/31/2025.

• State & local solar incentives: Some states, like Colorado, Massachusetts, and New York, offer statewide tax credits for solar installations, which you can usually take in addition to the ITC. States, individual municipalities, and even utility companies can also offer solar rebates and other incentives to help lessen the financial burden associated with installing solar panels and related equipment.

• Net Energy Metering (NEM): NEM is a policy that credits you for all excess electricity your panels generate that you don’t use in real-time. You can then call on those credits for free when you need them to offset electricity consumption when your panels underproduce for what you need, like at night. One-to-one net metering is ideal, but the policy can still help you save over time if you get credited at the wholesale rate for exported energy (net billing).

• Property tax exemptions: Installing solar increases your home's value, according to studies conducted over the past decade by SolarReviews, Zillow, and the Berkeley Lab. Home improvements that increase property value usually drive up property taxes, too, but many states and municipalities have property tax exemptions that prevent taxes from going up as a result of going solar. 

• Sales tax exemptions: Similarly, many states and townships waive sales tax on solar equipment, which helps reduce all-in material costs for installers and, as a result, individual solar customers.

• Solar Renewable Energy Certificates (SRECs): Many states have renewable portfolio standards (RPS) that require a specific percentage of their energy to come from clean energy sources. In order for utility companies to abide by those standards, they can opt to offset fossil fuel consumption by buying SRECs. In states with an active SREC market, you may be able to get compensation based on how much energy your panels generate, which puts more money in your pocket.

Solar Panel Financing Options

There are four primary ways to finance your solar panel installation: a cash purchase, a solar loan, a lease, and a power purchase agreement (PPA).

• Cash purchase: Paying in cash means you’ll need to have the entire cost of your solar array saved upfront. Most installers will require up to 50% down to get the design and planning phase underway, and the remainder before they connect and activate your system. This is the most costly option upfront, but will yield the fastest payback period and highest net savings due to the lack of interest.

• Solar loan: A solar loan is the most popular financing option for solar because it’s more accessible. You only need a small down payment or, in some cases, no money down to get your system installed. You’ll then pay off the remaining cost of the system plus interest over the loan term, which can range from 2 to 20 years or more. The interest will add to your all-in solar panel installation costs and reduce your net savings.

• Solar lease: A solar lease is like a rental agreement for your panels. You pay nothing upfront to have your system installed, but you agree to make a monthly payment to rent the equipment. You then get to use the electricity the panels generate to offset your electric bills. Leases can provide immediate savings, but the long-term savings are much lower, there’s no payback period, and you won’t ever own the panels.

• Power Purchase Agreement (PPA): A PPA is similar to a solar lease in that you pay nothing upfront to have your panels installed. Instead of paying a monthly rental fee, though, you agree to buy the electricity the panels generate rather than from your electric company. PPAs can also lead to immediate savings, but long-term savings are lower than if you chose an option that led to panel ownership.

Are Solar Panels Worth It? (ROI & Long-Term Value) 

Solar panels are generally a worthwhile investment, with their true value depending on factors like initial cost, local electricity prices, household energy consumption, and equipment payment methods. Solar helps reduce the negative impact of fossil fuel burning and is almost always worth it from a sustainability standpoint. Financially, it offers greater energy independence, protection from rising electricity rates, and potential for energy storage with batteries.

Many installers provide estimated payback periods and lifetime savings, and solar is considered worthwhile in the long run if lifetime savings are positive. The average payback period for a home solar installation in the US is about 10 years, and the typical solar ROI for the US is around 10%. When considering the investment, evaluate your energy bills, the cost of a solar array to offset monthly charges, and the long-term savings versus solar loan payments.

However, solar may not be as beneficial in states with low electricity consumption or costs, homes with northern-facing roofs, significant roof shading, or old roofs needing replacement soon. Always investigate local incentives, especially net metering, as long-term savings can be significantly lower without it.

Are There Hidden Costs of Going Solar

There are some “hidden” costs of going solar that you should consider before you take the plunge. In some cases, you won’t see any hidden fees, but you may want to budget extra for these unexpected costs.

• Roof condition and repairs: Your roof needs to be in good condition and have at least a decade of life left in it for it to be safe to install solar panels. Some less reputable solar installers may get you to sign a contract before revealing that you’ll need repairs or even full replacements before they can proceed with the installation. This could add thousands of dollars more to your total.

• Removal and reinstallation costs: If your roof gets damaged for any reason, or you end up needing a roof replacement before your panels reach the end of their lives, you’ll have to pay to remove and reinstall your equipment before and after the roof work. Leases and PPAs sometimes include this for free, but in most cases, you’ll pay an average of $3,800 for this service.

• Electrical upgrades: Older homes with 100-amp service may require an additional upgrade to 200-amp service to handle the load from the solar panels. If you’re installing an EV charger alongside your panels, you may also need to install a dedicated line to your service panel and a high-voltage outlet. These upgrades can add thousands to your total, although reputable installers will mention these charges upfront.

• Monitoring system fees: Some installers and equipment manufacturers offer professional system monitoring, which can help identify problems with your panels or inverters before they become severe. You don’t need to opt into these services, but if you do, you may incur monthly or annual monitoring fees.

• Homeowners insurance adjustments: Since panels increase your home value, your homeowner’s insurance premiums can increase after going solar to cover the added value. Speak with your insurance provider before installing panels to confirm if there will be an increase.

• Maintenance and cleaning: Most solar panels need minimal maintenance and will naturally get washed by rain. However, you should consider budgeting for one to two panel cleanings annually if you live in an area that sees minimal rainfall, as keeping your panels clean can help maximize energy production. These maintenance costs are something to keep in mind.

• Early lease termination fees: Some solar leases come with stipulations that require you to pay an early termination fee if you back out of the agreement before the end of the term. Make sure to look for these fees if you’re leasing.

• Loan origination charges: Some solar installers charge a loan origination fee to increase profits from homeowners who opt for a solar loan. Make sure your contract is detailed, broken down by line item, and doesn’t include these fees.

• Incremental increases in lease and PPA payments: Similarly, lease and PPA contracts may entice homeowners with low upfront costs and good savings at first, but many have built-in increases in lease payments or per-kWh payments for PPAs. Just make sure you read your contract thoroughly and understand all of the fees and increases included.

DIY Solar Panel Installation vs. Hiring a Professional

An average of over $1,600 goes toward solar panel installation labor, but when you include company profit, design fees, and other soft costs, that total goes up to $13,400. It’s probably tempting to consider DIYing your solar panel installation to save money, but this is never wise, and there are many reasons not to flex your DIY skills for this project and instead leave solar to the pros.

• Potential for injury: Working on your roof always comes with the potential for injury and can be dangerous even when you use the proper safety equipment. You also open yourself up to the risk of electric shock.

• Complicated installation: Installing panels requires drilling into structural roof components and complicated electrical work. These aren’t skills DIYers usually possess.

• Risk of fire: Mistakes during the wiring process can increase the risk of house fires.

• Risk of roof leaks: Drilling through your roof and failing to seal the roof penetrations properly can lead to roof leaks that cause expensive water damage.

• Voided warranty coverage: Solar equipment manufacturers will often void your equipment warranty if you DIY the installation, and you won’t get any labor warranty or roof leak warranty.

• Legal complications: Many municipalities will only let certified and licensed solar contractors or electricians install solar panels, so you may not be able to DIY the work legally, even if you’re comfortable with the process.

• Homeowner’s insurance issues: Your homeowner’s insurance may not cover water damage or fire damage that results from a DIY solar installation.

Hiring a professional solar installer is always worth the investment to ensure that your system is sized properly for optimized savings, your panels are installed safely, and you have a seamless permitting and interconnection process.

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