What is the average cost of solar panels in the U.S.?

average solar panel cost in the u.s. energysage You’ve probably heard about how solar energy can reduce your electricity bills, but how much do solar panels really cost? The easiest way to calculate the average cost of solar panels is to look at its price in dollars per watt, which is relatively consistent across the United States.

How much do solar panels cost?

As of early 2017, most U.S homeowners are paying $3 to $4 per watt to install a solar panel system, and the average cost per watt in the U.S. is $3.36 per watt. Using the national average for PV system size at 5 kW (or 5000 watts), the average cost of solar: $11,760 (after the Federal ITC discount).

That’s nine percent lower than it was a year ago, and solar panel system costs are continuing to fall. However, to really understand what a single solar panel will cost and what a complete solar system will cost, it’s important to compare prices quoted to homeowners in your area – total costs can vary depending on the state that you live in.


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Average cost of solar panels based on system size

Knowing the average cost per watt is helpful, but what does $3.57/watt actually mean for you? The cost of installing solar on your home or business depends on how much electricity you want to generate – a bigger system will cost more, because you’ll need to buy more equipment and more labor will be needed to install it.

The average solar energy system size in the U.S is approximately 5 kilowatts (kW). Based on the average price of $3.57/watt, a 5kW system would cost $12,500 after tax credits. Below are some average 2015 quotes for other solar energy systems by size:

  • 6kW solar energy system cost: $15,000
  • 8kW solar energy system cost: $20,000
  • 10kW solar energy system cost: $25,000

These prices reflect the cost of a solar energy system after deducting the federal solar tax credit, which reduces your solar system cost by 30 percent. Some states, local governments, and utilities also offer rebates and other tax incentives that can further reduce the solar system costs in your quotes from solar installers.





solar panel cost graphic




The price of solar panels will also vary from state to state. EnergySage analyzed quote data from the EnergySage Solar Marketplace to develop a range of solar panel system prices for top solar states:

State Solar system price range (6 kW) Solar system price range (10 kW)
Arizona $10,900 – $16,300 $18,100 – $27,100
California $13,700 – $17,500 $22,800 – $29,200
Colorado $12,800 – $16,500 $21,400 – $27,500
Connecticut $14,100 – $18,400 $23,500 – $30,700
Florida $10,800 – $15,200 $18,100 – $25,300
Illinois $13,200 – $17,200 $21,900 – $28,700
Maryland $12,600 – $15,500 $21,000 – $25,800
Massachusetts $14,500 – $18,600 $24,200 – $31,000
New Hampshire $14,500 – $17,500 $24,200 – $29,200
New Jersey $12,700 – $13,400 $21,200 – $27,300
New York $13,500 – $19,200 $22,400 – $32,000
North Carolina $12,900 – $16,300 $21,400 – $27,100
Ohio $11,900 – $16,000 $19,900 – $26,600
Oregon $13,200 – $17,000 $22,000 – $28,300
Pennsylvania $12,400 – $16,600 $20,600 – $27,700
Rhode Island $14,500 – $18,100 $24,200 – $30,200
South Carolina $13,300 – $16,200 $22,100 – $27,000
Texas $11,800 – $15,300 $19,700 – $25,600
Virginia $13,100 – $17,400 $21,900 – $29,000
Washington $15,100 – $19,700 $25,100 – $32,800

NOTE: These ranges are system prices after the 30 percent federal tax credit for solar

Remember, while bigger systems may cost more, they also should result in more savings. If you need to install a 10kW solar energy system to cover all of your electricity use, you might have to pay more out of pocket, but you’ll be cutting a significant monthly expense – your utility bill – and saving more money as a result. $0-down, low-interest solar loans are becoming increasingly common, making it even easier to buy a solar panel system and maximize your solar savings. For more information about the average cost to go solar in both these and other states, you can compare prices and installers across the country for 3.5kW, 4.5kW5kW6kW, 7 kW8 kW and 10kW solar systems.

Solar energy installation cost by state (dollars per watt)

As interesting as it is to look at average solar panel cost in the United States, it’s also very helpful to understand what solar will cost in each state. Prices can vary significantly depending on where you live. A number of factors impact this variation – one of the most influential is the cost of electricity. That’s one reason for why Florida’s average solar cost is so much lower than the cost of solar in Massachusetts – electricity costs in the Northeast are high when compared to the rest of the U.S. Take a look at the table below, which contains average prices by state in 2015. (Note that, as mentioned above, the average national price is $0.13 lower in 2016.)

solar panel installation cost by state

EnergySage data. Source: Solar Electric Power Association, 2015 Market Snapshot | PV System Price Quotes from Selected States

The biggest takeaway from this data isn’t that some states are “better” than others when it comes to solar prices: it’s that solar panel cost is low and affordable across the board. Almost every state falls within a $0.40 cent margin of the $3.70 national average for 2015. An additional takeaway is that many of the top 10  solar states in the U.S. for installed capacity are higher than the national average for cost per watt (including the nation’s leader California). Clearly, solar isn’t only worth it in the regions of the United States where costs are extremely low – there is a healthy trend of adoption across the states without direct correlation to lowest cost per watt.

How much does a single solar panel cost?

Many homeowners are wondering how much a single solar panel costs as a way to understand the overall breakdown of their system or to calculate estimates for DIY solar projects. The simple answer is that it depends on the amount of leverage a buyer has, the type of panel, and the size of the system. For example, because solar installers have direct relationships with distributors and can buy in bulk, they can often purchase solar panels at a rate much lower than the average consumer. Solar companies can typically get a single solar panel at a price of $0.75 per watt. Therefore, if the solar panel output is 250 watts, that single panel might cost you $187.50. However, if a homeowner is trying to buy one or two panels on their own for a small DIY project, they will likely pay closer to $1 per watt. That means the same solar panel could cost closer to $250.

For those looking for a range for the cost of solar panels, the cost will run from as low as $0.85 per watt to $1.25 per watt with output ranging from 150W to 350W for a typical solar panel. If those numbers seem low, remember that an installation has added costs thanks to the inverters, solar batteries and other additional equipment needed for a complete solar energy system. Overall, there’s no question that the equipment will be significantly cheaper when working with a solar installer rather than trying to find a deal online as a consumer.





solar panel cost graphic




Factors that impact the cost of solar panel installation

A home solar quote contains the all-in price that you’ll be expected to pay when you install a solar energy system on your roof. As you start to explore solar offers for your home, you’ll notice that there are pricing variations between installers – what are the factors that make up the cost of your solar energy system?

First, there’s the equipment. Not all solar panels (or inverters) are created equal, and more efficient equipment comes with a higher price tag. More efficient, higher-quality equipment comes with benefits that may be worth the added cost, however: better hardware can produce more electricity with the same amount of sunlight, and often comes with a more comprehensive warranty, too.

While equipment costs make up a significant portion of your solar energy system quote, the cost of permits and labor are also a factor. Typically, you will have to pay a fee to get your solar energy system connected to the grid. Additionally, there’s a significant amount of manpower required to take your solar idea to a reality – designing a system, coordinating a site visit, filing permits, and installing the solar panels all take time and cost money.

The characteristics of your home can also play a part in your total costs. If you have a south-facing roof that slopes at a 30-degree angle, installing solar on your home will be very easy, because there are no additional accommodations to be made. Conversely, if your roof has multiple levels, dormers, or skylights, the additional effort to finish the installation may bring (slight) additional costs.

Another factor that can increase the cost of your solar energy system is marketing and sales spending. Solar installers spend money trying to attract customers, whether through phone calls, door-to-door salespeople, flyers, or other forms of direct advertising. Luckily, this is a cost you can control: by using an online comparison-shopping platform like the EnergySage Solar Marketplace, you can lower the costs your installer would otherwise incur by trying to market to you.

How much can you save with solar?

So how much are your neighbors actually saving over 20 years as a result of installing a solar energy system? As you might expect, this depends on where you live. For example, homeowners will save about $38,000 on average in Boston when they go solar. In Los Angeles, homeowners will save nearly $22,000 on average, and in Portland, homeowners can save a whopping $43,000 over 20 years.

Top cities for 20-year solar savings in 2015

solar panel savings by city

Your solar panel payback period will also depend on where you live. The average U.S. household can break even on their solar energy system in just 7.5 years, but in many cities that number is even lower – Portland, Seattle, Washington DC, and Boston all have payback periods of four years or less.

Many factors impact how much you’ll pay out of pocket for your solar panel system and how much you’ll save. The best way to quickly understand how much a solar panel installation will cost for you is to use a Solar Calculator – this tool uses your electricity consumption and real-time market prices to develop an instant solar estimate. Once ready, get quotes from multiple providers to compare all of your options and determine which one is best for you.

More information about solar panel costs & savings

42 thoughts on “What is the average cost of solar panels in the U.S.?

  1. James

    It’s so crazy to see US prices still this high! I know there are lots of differences between the markets, but the average PV system in Australia currently retails for about $1.60AUD after the Aussie federal ‘rebate’.

    Good to see it’s coming down though!

    Reply
  2. Jake

    The problem in the US is bureaucracy. The federal tax incentive is a tax credit of 30%, not a rebate. Most Americans cannot utilize this incentive since their tax bill is too low. Also, big utility companies are fighting solar by not paying the consumer anywhere near the same rate for our electricity that they are charging us for theirs. And sadly, big utilities grease politicians to keep solar on the fringes. Florida, an ideal state for solar, offers ZERO state or local incentives. Florida utilities are vehemently opposed to solar since Florida averages over five hours of “usable” sunlight per day, it would severely decrease their obscene profits. One Florida utility, JEA, is actually trying to sell solar generated electricity for a HIGHER price to consumers than coal generated! In the link to the video, the spokesperson cannot even keep a straight face while spewing the dogma.

    Reply
    1. Gunnar

      Utility companies fighting solar? Are you effing kidding? Moron. .Not true. My utility company gave me a 25% rebate for my solar install. Most Utes do because it’s cheaper to reduce excessive loads by reducing demand through home solar systems than it is to add capacity by building new plants. Stop drinking the leftist koolaid.

      Reply
      1. ed

        I believe it is you that drank the koolaid. Florida utilities just spent millions trying to keep consumers on a back foot when trying to control their own solar destinies.

        Reply
      2. Paul Chernick

        Gunnar: While saving money would make sense for society, most utilities serve their investors and managers, and resist losing sales to solar. That includes many munis and coops.

        Reply
      3. Tristan Reed

        our country/s energy use is manly fossil fuels which are obviously bad for our environment, our country’s use of renewable energy sources such as solar energy is only 10%. now if we put solar panels on each home not only would it increase the amount of renewable energy we use each year but it would also decrease the amount of pollution and decrease the electricity bill on your house so you would pay off that solar panel instead of paying a bill every month.

        Reply
  3. Michael

    Regarding this: “Based on the average price of $3.70/watt, a 5kW system would cost $13,000.”
    How come? $3.70 times 5,000 equals $18,500… Same with other system sizes.

    Reply
    1. Sara Matasci Post author

      Hi Michael,
      The $3.70/watt price is before any tax credits or rebates. The prices that we list for a full solar energy system reflect the cost after deducting the federal solar tax credit, which reduces your solar system cost by 30 percent.

      Thanks for reading!

      Reply
      1. samg

        The tax credit deduction only works if you have a positive tax due. If your income is low enough then no matter 30% or 100% it is not benefiting you at all since you can not reduce your tax due lower than zero. Am I correct?

        Reply
        1. Sara Matasci Post author

          That’s correct – you have to have tax liability in order to get the refund. However, while you cannot reduce your taxes due to below zero, any remaining benefit from the ITC can be carried over into future years. Take as an example a solar energy system that costs $10,000, which means you are eligible for a $3,000 refund. If your federal taxes only come out to $1,500, you can get $1,500 in one year and $1,500 the next year.

          Sara
          Content Specialist @ EnergySage

          Reply
  4. Frank

    It’s a shame that Germany has been installing for $2/W for going on 3 years now and we let these corrupt corporate fossil interests sabotage the install industry in the US.

    Reply
    1. Mat

      Germany doesn’t have tax credit. After the credit the price is so close! World is one village now… everything is the same!

      Reply
  5. alexjordan055

    I found your blog to be very informative. I am greatly inspired by your posts and thinking of writing mine now. Thanks for being an inspiration to me as I was also trying to write blogs but was not getting the appropriate genre.

    Reply
  6. Rick Z

    We live in IREA territory in Colorado where they have established a demand charge now where if you have solar and end up supplying more than 90% of your power from solar they will charge you 10-20 times the cost per watt when you pull off the grid. We were told that our system can only be designed and installed to produce 60% of the annual watt usage of the home. If we do that we’ll pay the same rate we are now for our electricity. This is nuts! How can the government allow this disincentive?!

    Reply
  7. Jeric Danao

    To see that adapting to technological advancements could be very hard yet also rewarding in the long run. Such an informative blog regarding on how to reach the audience with the same concern. Good job! 🙂

    Reply
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  9. Ryan

    Our government is absolutely fucking ridiculous for even charging you for using personal solar energy that requires no help from an outside source other than the sun. It’s ludicrous and the only reason they do it is to deter you from getting solar panels. It’s all about that shitty capitalism. Gotta love living in a country that gives more of a fuck about big business than they do about you.

    Reply
  10. Ella A

    In the last section where there are averages of how much a solar system would save the average household, is that for a 250 watt system?

    Reply
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  13. Brandi

    Depending on where you go, what components you are looking to purchase, installer cost, and permits/licenses/credits. The cost of installing an average sized solar system can greatly fluctuate.

    The re seller you are working with such as a larger one may have much higher prices than smaller installers or system dealers. It really all depends on where you look and what you are in the market for.

    Reply
  14. John

    Australia and Germany are at least 5 years ahead of USA regarding solar installation. An average solar system size will pay off in the USA in 6.5 years. From 3.7 $ will be another 30% federal tax credit.
    Installation need to be done in accordance with National Electrical Code and electrical installation looks like plumbing installation according to with other places on the word. 4 hours of labor are used for inspection of the local AHJ.

    Reply
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  18. Jay Tee

    The reason for electric grid companies charging more per unit of electricity is to make up revenue loss due to decrease in volume. Any business has to cover fixed costs to stay viable. Although level of demand for grid energy is decreasing, the grid will need to be viable absent storage technology that is capable of providing energy reliably and on demand as consumers have become accustomed. In other words, at present the grid is needed as insurance.

    Reply
  19. kris vams

    All the information is incorrect. I current own a solar system for my house and I live near Houston,TX. The average cost per watt is $1.88 per watt after all rebates. I also had quotes with $1.80 per watt but it was all cash. People are getting terrified with abnormal prices that they see online and they never think about how the industry is changing and what competition is doing.

    Reply
  20. Jesse Spencer

    I have a 2 Apt house with 2 meters. The bills are about $60 each on average, or $120 a month.
    This is mostly cloudy upstate NY. If I spend $20,000 on a system it will provide perhaps 1/2 of my electric needs, so save maybe 40% of those bills because the meters each cost $9 minimum per month.
    So it’s $20,000 for a system that degrades to save $50 a month.
    Well I have a $20000 REIT that pays $65 a month and never loses value.. I pay about $10 a month on assorted taxes that is then given to people who waste their money and mine with solar panels.

    Reply
    1. Matt

      Not sure where u get your info, but a $20,000 system before credit would be about 8kw… which would produce 9000kw of electric per year in western pa. At a savings of $.12 per kwh… 9000 x $.12 = about $1080 per year, which is about $90 per mo savings. As electric rates increase… and trust me… they will… the savings will increase

      Reply
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  23. David

    Hi, does the rates here, for systems with a block of batteries, or systems, that just pass the extra to the grid, and buy back at night?

    Reply
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  30. Michael T Nguyen

    Hello,

    I am looking at the 10kW PV System. Is the estimated cost just for the system? Or does it include installation cost as well? Also, is there a breakdown of the system cost? I would like to know what the percentage of cost should be for the panels, inverters, installation, etc.

    Thank you,
    Michael

    Reply

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