How Much Does It Cost to Install Solar Panels 2016
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With the cost of solar panels dropping every year, there's never been a better time to go solar. A solar panel installation ranges in cost depending on a number of factors, including the size of system you want to install, your geographic location, and the type of equipment you want. That all brings us to the key question: how much do solar panels cost? Generally, solar panels will cost between $15,000 and $25,000.
In this article, we'll break down the cost of solar by system size, state, and panel brand, all of which can significantly impact your final cost of solar panels. We'll also dive into a few other factors that impact the cost you'll pay for a solar installation.
Key takeaways about solar panel cost
- The cost of solar panels as of July 2021 is about $20,474 ($2.76/W for a 10 kW system minus the 26 percent federal solar tax credit)
- The cost of solar has fallen about 20 percent over the past 5 years – solar is worth it more now than ever before!
- The best way to get a fair price for solar? Compare quotes on the EnergySage Marketplace, for free.
What you'll learn about in this article
- Average national solar pricing
- Solar panel cost by state
- Solar panel cost by manufacturer
- Factors that influence solar panel cost
- Solar rebates and incentives
- How to finance a solar panel system
- Are solar panels worth it?
Solar panel system costs in 2021: average national pricing
On average, a 10 kilowatt (kW) solar panel installation costs $20,424 after taking into account the federal solar tax credit ($27,600, or $2.76/Watt, W, gross cost minus 26 percent with the tax credit factored in).
What is the average cost of a solar installation? For a 10 kW solar panel installation in the United States, quotes range from $17,612 to $23,236 after taking into account the federal solar tax credit ($23,800 to $31,400, or $2.38 to $3.14/W, gross pricing minus 26 percent with the tax credit factored in).
A note about pricing: gross vs. net costs
Throughout this article (and all around our website), we usually talk about solar panel pricing in terms of gross cost, aka the cost before any solar rebates and incentives that can reduce the upfront cost of solar, or even get you some money back over time. For example, our cost per Watt ($/W) figures throughout the rest of this article are always the gross cost. This is because solar rebates and incentives aren't always available to everyone. Even the 26 percent federal solar tax credit isn't always available for everyone to take full advantage of – you need to have enough tax liability to claim the credit.
Solar installations are a unique product – just based on your state and the manufacturer of your chosen solar panels, average solar panel costs can vary widely.
Solar panel cost by state
As interesting as it is to look at the average solar panel cost in the United States, it's also very helpful to understand what solar will cost in each state, as prices can vary significantly depending on where you live. Why? There are a number of reasons, but one important factor to keep in mind is system size.
In general, states where homeowners need to use air conditioning more often have more average electricity used per household. As such, some of the largest solar panel systems are installed in sunny, warm states like Arizona and Florida. Why does this matter? For solar installers, the larger your system, the less they will usually charge per kilowatt-hour (kWh). It's like buying in bulk at Costco – you might pay a higher sticker price, but your per-unit costs are lower when you buy more at one time. We'll dive into this phenomenon more below.
Back to solar panels. In the end, this very roughly translates to lower $/W pricing in warm states and higher $/W pricing in cold states. But in the end, total pricing is usually close to a wash – warm states have a lower price per watt, but larger system sizes, and cold states have a higher price per watt, but smaller system sizes.
We've analyzed quote data from our solar marketplace to understand solar panel system prices by state. But as we said above, system sizes tend to be larger in states with lower pricing, so it's not always fair to compare a 10 kW system in Florida to a 10 kW system in Massachusetts. Their energy needs are just too different.
Table: cost of solar panels by state
| State | Solar panel cost: 6 kW system average | Solar panel cost: 10 kW system average | 2021 federal tax credit value (for 10 kW system) | Average cost per watt ($/W) |
|---|---|---|---|---|
| Arkansas | $14,940 | $24,900 | $6,474 | $2.49 |
| Arizona | $13,980 | $23,300 | $6,058 | $2.33 |
| California | $15,960 | $26,600 | $6,916 | $2.66 |
| Colorado | $18,720 | $31,200 | $8,112 | $3.12 |
| Connecticut | $18,660 | $31,100 | $8,086 | $3.11 |
| Washington D.C. | $20,580 | $34,300 | $8,918 | $3.43 |
| Delaware | $15,660 | $26,100 | $6,786 | $2.61 |
| Florida | $14,760 | $24,600 | $6,396 | $2.46 |
| Georgia | $18,060 | $30,100 | $7,826 | $3.01 |
| Iowa | $16,200 | $27,000 | $7,020 | $2.70 |
| Idaho | $15,960 | $26,600 | $6,916 | $2.66 |
| Illinois | $17,280 | $28,800 | $7,488 | $2.88 |
| Indiana | $17,880 | $29,800 | $7,748 | $2.98 |
| Louisiana | $18,600 | $31,000 | $8,060 | $3.10 |
| Massachusetts | $18,240 | $30,400 | $7,904 | $3.04 |
| Maryland | $17,940 | $29,900 | $7,774 | $2.99 |
| Maine | $15,660 | $26,100 | $6,786 | $2.61 |
| Michigan | $18,060 | $30,100 | $7,826 | $3.01 |
| Minnesota | $18,240 | $30,400 | $7,904 | $3.04 |
| Montana | $16,620 | $27,700 | $7,202 | $2.77 |
| North Carolina | $16,800 | $28,000 | $7,280 | $2.80 |
| New Hampshire | $18,420 | $30,700 | $7,982 | $3.07 |
| New Jersey | $16,020 | $26,700 | $6,942 | $2.67 |
| New Mexico | $18,900 | $31,500 | $8,190 | $3.15 |
| Nevada | $14,040 | $23,400 | $6,084 | $2.34 |
| New York | $18,840 | $31,400 | $8,164 | $3.14 |
| Ohio | $16,020 | $26,700 | $6,942 | $2.67 |
| Oregon | $16,860 | $28,100 | $7,306 | $2.81 |
| Pennsylvania | $17,400 | $29,000 | $7,540 | $2.90 |
| Rhode Island | $18,840 | $31,400 | $8,164 | $3.14 |
| South Carolina | $17,580 | $29,300 | $7,618 | $2.93 |
| Texas | $16,200 | $27,000 | $7,020 | $2.70 |
| Utah | $16,260 | $27,100 | $7,046 | $2.71 |
| Virginia | $17,520 | $29,200 | $7,592 | $2.92 |
| Vermont | $17,460 | $29,100 | $7,566 | $2.91 |
| Washington | $15,480 | $25,800 | $6,708 | $2.58 |
NOTE: These ranges are system prices BEFORE the 26 percent federal tax credit for solar. Additionally, EnergySage does not currently provide quotes in all 50 states, which limits our ability to provide solar panel cost estimates in each.
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 single state falls within a $0.50 cent margin of the $2.76/W national average. An additional takeaway is that many of the top 10 solar states in the United States for installed solar capacity are higher than the national average for $/W (including the nation's leader for installed solar capacity, 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 the lowest $/W.
Solar panel cost by manufacturer
Another way to break down solar panel price data is by the panel brand. The following table was made using data from the EnergySage Marketplace and tracks the average cost of 6 kW and 10 kW solar panel systems by the brand of solar panel used in the installation project.
Table: cost of solar panels by panel manufacturer
| Manufacturer | Solar panel cost: 6 kW system average | Solar panel cost: 10 kW system average | 2021 federal tax credit value (for 10 kW system) | Average cost per watt ($/W) |
|---|---|---|---|---|
| AXITEC, LLC | $15,180 | $25,300 | $6,578 | $2.53 |
| Aptos Solar Technology | $14,760 | $24,600 | $6,396 | $2.46 |
| Canadian Solar Inc. | $17,760 | $29,600 | $7,696 | $2.96 |
| CertainTeed Solar | $16,440 | $27,400 | $7,124 | $2.74 |
| First Solar | $15,180 | $25,300 | $6,578 | $2.53 |
| Hanwha SolarOne | $16,800 | $28,000 | $7,280 | $2.80 |
| Heliene | $17,340 | $28,900 | $7,514 | $2.89 |
| Hyundai Energy Solutions | $18,180 | $30,300 | $7,878 | $3.03 |
| JA Solar | $15,960 | $26,600 | $6,916 | $2.66 |
| Jinko Solar | $16,740 | $27,900 | $7,254 | $2.79 |
| LG Solar | $16,500 | $27,500 | $7,150 | $2.75 |
| LONGi Solar | $16,860 | $28,100 | $7,306 | $2.81 |
| Mission Solar Energy | $15,720 | $26,200 | $6,812 | $2.62 |
| Next Energy Alliance | $14,640 | $24,400 | $6,344 | $2.44 |
| Panasonic | $16,260 | $27,100 | $7,046 | $2.71 |
| Peimar Group | $15,900 | $26,500 | $6,890 | $2.65 |
| Phono Solar Technology Co, Ltd. | $17,340 | $28,900 | $7,514 | $2.89 |
| Q CELLS | $16,200 | $27,000 | $7,020 | $2.70 |
| REC | $16,560 | $27,600 | $7,176 | $2.76 |
| Risen | $13,800 | $23,000 | $5,980 | $2.30 |
| S-Energy | $15,420 | $25,700 | $6,682 | $2.57 |
| Seraphim Energy Group, Inc. | $15,900 | $26,500 | $6,890 | $2.65 |
| Silfab Solar | $16,860 | $28,100 | $7,306 | $2.81 |
| Solaria | $17,160 | $28,600 | $7,436 | $2.86 |
| SunPower Corporation | $20,100 | $33,500 | $8,710 | $3.35 |
| Suntech | $15,180 | $25,300 | $6,578 | $2.53 |
| Tesla | $16,320 | $27,200 | $7,072 | $2.72 |
| Trina Solar | $16,920 | $28,200 | $7,332 | $2.82 |
| VSUN | $12,660 | $21,100 | $5,486 | $2.11 |
| ZNShine Solar | $17,940 | $29,900 | $7,774 | $2.99 |
NOTE: These ranges are system prices BEFORE the 26 percent federal tax credit for solar.
The price you pay for a solar panel brand is reflective of panel quality to a degree. For example, systems using SunPower panels see the highest average prices ($20,100 for a 6 kW system and $33,500 for a 10 kW system), and SunPower is known for producing well-made, high-efficiency products.
Interestingly, there aren't that many outliers when it comes to brand pricing, and most manufacturers generally see similar cost ranges. It's important to keep in mind that when comparing system prices based on panel brands, there are so many factors aside from just panel manufacturer that impact the final system price – like installer experience, location, racking equipment, inverter brand, and more.
Solar costs over time continue to fall
A solar panel system hasn't always been $2.76/W. As recently as five years ago, the cost of solar panels was almost 20 percent higher than it is now:
Prices will likely continue to fall even more in the future. The solar industry is still young, and there's plenty of innovation still to come. As manufacturing and installation processes mature and become even more efficient, solar shoppers will hopefully start to see some of those cost savings impacting their sticker price for solar.
How much does a single solar panel cost?
If you're looking to buy your own solar panels and install them yourself, you can expect to pay somewhere between $200 and $250 per solar panel. That doesn't include other costs, like inverters, wiring, and installation, which is why the cost of a full solar panel system installation seems much higher.
What impacts the cost of a solar panel installation?
There's a lot that goes into the sticker price a solar installer charges you for your individual solar panel installation. Solar installations are a unique product: the price you pay is heavily dependent on your unique situation and factors related to your electricity use and property. Here are some of the top factors to keep in mind that can and do influence the cost of solar panels for your property:
System size
Perhaps the most obvious and influential factor in the price you pay for a solar panel installation is the size of the system you get. It's pretty simple: a bigger system with more panels will cost more money than a system with fewer panels (and lower energy output). However, there's also that Costco-esque relationship between system size and price, where a larger system has a lower average $/W. It's like buying food in bulk – the overall price is higher, but the per unit price is lower. Here's what EnergySage Marketplace data shows the $/W to come out to for various system size buckets, and what that would translate to in terms of a full system cost:
Cost of solar panels by system size
| System size | Average solar panel system cost (before tax credits) | Average solar panel system cost (after tax credits) | $/W |
|---|---|---|---|
| 2 kW | $6,822 | $5,048 | $3.41 |
| 3 kW | $9,159 | $6,778 | $3.05 |
| 4 kW | $11,524 | $8,528 | $2.88 |
| 5 kW | $14,111 | $10,442 | $2.82 |
| 6 kW | $16,857 | $12,474 | $2.81 |
| 7 kW | $19,436 | $14,382 | $2.78 |
| 8 kW | $21,968 | $16,256 | $2.75 |
| 9 kW | $24,706 | $18,283 | $2.75 |
| 10 kW | $27,541 | $20,381 | $2.75 |
| 11 kW | $29,657 | $21,946 | $2.70 |
| 12 kW | $32,135 | $23,780 | $2.68 |
NOTE: The $/W in this table reflects the average price in that system size range, i.e. $3.41 is the average $/W for systems ranging from 2 kW to 2.99 kW.
These prices reflect the cost of a solar energy system both before AND after deducting the federal solar tax credit, which reduces your solar system cost by 26 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.
Remember, while bigger solar power systems may cost more, they'll also very likely save you more money in the long run. If you install a 10 kW solar energy system that covers 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. Zero-down, low-interest solar loans are becoming increasingly common, making it even easier to buy a solar panel system that can fully offset your electricity bill and maximize your solar savings.
Equipment
As we discussed above, the brand of equipment you choose for your solar installation has an impact on the final cost you pay. Just like any home appliance, solar panels come on a spectrum of quality that usually depends on efficiency, warranties, and appearance.
Solar inverters are a less obvious part of any solar panel installation, but factor into your costs just like solar panels. Curious how your pick for inverters influences the price of your system? Check out our overview of the most popular solar inverter types, and their pros and cons.
Roof characteristics
The characteristics of your home and roof also play a part in your total solar costs. If you have a south-facing roof that slopes at a 30-degree angle, installing solar on your home will be relatively easier for your installer, as they can probably install all of your panels on a single roof plane that has optimal sun exposure (better, more direct sun exposure = fewer panels needed, which will lower your costs). Conversely, if your roof has multiple levels, dormers, or skylights, the additional effort to finish the installation may include additional equipment and installation costs.
Labor
Another piece of the solar installation puzzle is the company actually performing the job. Solar installers charge varying amounts for their services, and the final price they offer for an installation depends on measures like your installer's track record, warranty offerings, and internal operations. You can imagine how a well-regarded solar installer with premium warranty offerings can charge more for an installation job, and it will be worth your money.
EnergySage brings the best solar installers right to you on our Marketplace – check out our article on choosing an installer to learn how we vet installers, and how you can and should compare them against one another.
Location
As we talked about above, solar installation costs vary by state. The spread of costs isn't that wide and much of the cost differences by location are actually due to differences in system sizes and incentives, but it's still something to keep an eye on.
Permitting and interconnection
While equipment and labor costs make up a significant portion of your solar energy system quote, the cost of solar permits and your interconnection fees can also be a factor. Typically, you will have to obtain a few solar permit documents and pay a fee to get your solar energy system connected to the grid (known as "interconnection"). There is some exciting work happening in this area to keep the costs and time lag to getting an approved interconnection – the Department of Energy's SolarApp+ is trying to make the interconnection process cheaper and quicker for everyone.
Rebates and incentives: reducing your solar costs
We've been talking about factors that add on cost to a solar installation, but it's also equally essential to consider the ways you can reduce your costs with solar rebates and incentives. Tax credits, cash rebates, performance-based incentives (PBIs), and energy credits are all ways you can get money back on a solar installation. The availability of these types of incentives almost always depend on where you live – utilities, cities, and states all usually offer their own solar incentives to people living in their service areas.
The solar tax credit: solar's best incentive
The best incentive for going solar in the country is the federal solar tax credit, or the investment tax credit (ITC). This incentive allows you to deduct 26 percent of the cost of installing solar panels from your federal taxes, and there's no cap on its value. For example, a 10 kW system priced at the national average ($2.76/W) comes out to $27,600. However, with the ITC, you'd be able to deduct 26 percent of that cost, or $7,176, from your taxes. This essentially reduces the cost of your system to the $20,424 price tag we highlighted at the beginning of this article.
How do you pay for a solar panel installation?
Once you know the cost of solar for your unique project, it's time to decide how you'll pay for solar. There are three primary ways to finance a solar panel installation: a cash purchase, a solar loan, or a solar lease/power purchase agreement.
Generally, a cash purchase is right for you if you're looking to maximize your savings from solar, you have enough tax liability to take advantage of the solar tax credit, or you have the funds available to pay for a solar panel system upfront.
A solar loan is right for you if you don't want to shell out the amount of cash required to pay for a solar panel system upfront, you still want the most savings on your electricity bills as possible, and you would like to be eligible for all incentives and rebates.
A solar lease or PPA is right for you if you would prefer someone else to monitor and maintain the system, if you aren't eligible for tax incentives, or if you'd just like to reduce and/or lock-in your monthly electricity bill.
The cost of solar after installation
It's not talked about as much, but one thing to keep in mind about the cost of a solar panel installation is the cost to keep and maintain that system. In general, solar panels require little to no maintenance over their lifetime, and you shouldn't expect to shell out much money at all once your panels are installed and operational. There's always the off-chance something happens that's not covered by your warranties, however. You may need to trim trees as they grow, or hire a cleaner if you live in an area of the country with abnormal air pollution. Learn more about what you could run into post-installation in our article about the costs of solar panels after they're installed.
In conclusion: are solar panels worth it?
At the end of the day, the cost of solar is only as important as the return you'll get from installing solar panels. For most homeowners, solar is a worthwhile investment, and you can "break even" in as few as 7 or 8 years. From that point on, you're essentially generating free electricity and racking up the savings. During those 7 to 8 years, you'll be generating your own electricity instead of paying for electricity from the grid, and any extra electricity you produce you might be able to get credit for thanks to net metering policies (depending on where you live).
Of course, just like the cost of solar panels varies by state, your payback period with solar will also vary depending on where you live. As a general rule, places where electricity is most expensive (California, New York, and Massachusetts, for example) will lead to the most lifetime savings from a solar panel system. Check out our article about electricity rates and solar savings for a more in-depth explanation of how this actually works.
You can read more about the payback and cost-benefit of solar in our article, "Are solar panels worth it?". Or, head to our solar calculator for an instant estimate of your savings potential!
Start your solar journey on EnergySage
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How Much Does It Cost to Install Solar Panels 2016
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