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?
In 2017, most homeowners are paying between $2.87 and $3.85 per watt to install solar, and the average gross cost of solar panels before tax credits is $16,800. Using the U.S, average for system size at 5 kW (5000 watts), solar panel cost will range from $10,045 to $13,475 (after tax credits).
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.
Average cost of solar panels based on system size
Knowing the average cost per watt is helpful, but what does $3.36/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 $3.36/watt, a 5kW system would cost $11,760 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.
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:
Solar panel pricing in U.S. states table
|State||Solar price range (6 kW)||Solar 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, 4.5kW, 5kW, 6kW, 7 kW, 8 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.)
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.
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
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.
Three tips for solar shoppers in 2017
1. Know thy market: compare all of your options
Shopping for a solar panel system is a complex process that should involve a lot of research. That research process should include a thorough consideration of every option available to you and every company that serves your area. Using the EnergySage Solar Marketplace allows consumers around the country to get detailed, personalized quotes from high quality solar installers–and compare these quotes on an apples-to-apples, easy-to-understand format. These high quality solar installers compete for your business, and offer lower prices to stay competitive. When you use EnergySage to go solar, you’ll get quotes for cash purchase, solar loans, solar leases and PPAs and save anywhere from $6,000 – $15,000 on your turnkey solar installation.
2. The biggest company will not always offer the best price
The bigger isn’t always better premise is one of the main reasons we strongly recommend homeowners consider every option available to them, not just the company big enough to pay for the most advertising. In residential solar, a few large companies control most of the market, and their business model assumes that homeowners won’t bother to shop around. On the contrary, small installers on EnergySage are aware that they are not the only company offering you a quote and thus they often offer lower prices to stay competitive. If you have quotes from big installers in solar, make sure you compare those bids with quotes from local installers in your area to ensure you don’t overpay for solar.
3. Different products for different people
Just as a Porsche may not be the best choice for everyone in the market for a car, not every homeowner will need to buy premium solar equipment. And just as large installers will not have to offer the best prices because they face reduced competition, they will also feel little pressure to offer a variety of solar equipment – they may only offer one brand of solar panel and inverter. For the price-conscious, value-oriented consumers, it is possible to save thousands simply by opting for standard solar panels instead of a premium top-of-the-line brand. When you compare your solar equipment options, you can find the perfect fit for your roof and lower your overall installation cost.
For any homeowner in the early stage of solar shopping that would just like a ballpark estimate for a solar installation, try our Solar Calculator that offers up front cost and long term savings estimates based on your location and roof type. For those looking to get quotes from local installers today, check out our quote comparison platform.