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Solar

Solar Panel Installation Costs

Average Cost:

$12,000 - $30,000

Solar panel installation costs a national average of $16,500 for a 6kW solar panel system for a 1,500 square ft. home. The price per watt for solar panels can range from $2.50 to $3.50, and largely depends on the home’s geographical area. Residential solar panels are usually sized at 3kW to 8kW and can cost anywhere from $9,255 and $28,000 in total installation costs. See average solar panel system costs by size (before tax credits or discounts).

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Solar panel installation is becoming more popular throughout the country as utility prices and climate-conscious behaviors continue to rise. The good news for homeowners is that installation costs have decreased due to growing adoption by millions of U.S. households. The Office of Solar Energy Efficiency and Renewable Energy reported a 70% drop in the price of solar PV panels since 2014. Combined with federal and local incentives, going solar is more attainably priced than ever before.

But what does all of that really mean? Here is our guide to a solar panel installation cost breakdown.

What Are Solar Panels?

Residential solar power is a type of renewable energy that is healthier for the environment by reducing fossil fuel use and greenhouse gas emissions.

In a residential solar installation, solar panels use photovoltaic cells (PV) that collect and convert the sun’s energy into usable electricity to power a home. Solar power can offer significant cost savings over time by reducing monthly electricity bills or eliminating them entirely depending on household energy needs. Solar panels are an appealing feature and may also increase a home’s property value or facilitate a faster sale.

How Much Do Solar Panels Cost?

Solar panel installation varies by region and a household’s energy needs. On average, it costs approximately $16,500 to outfit a 1,500-square-foot home with solar panels.

Solar Panel Installation

The cost to have solar panels installed on your home varies according to your home's size, energy needs, and location

  • Some roof types and pitches are more conducive to solar than others

  • The average payback period is 7 to 10 years

  • Rebates for solar panels vary by state and municipality

  • The federal tax credit for solar helps offset installation costs

You can use the above price as a starting point, and then get a general sense of your own cost by figuring it is $10 per square foot of home to add solar panels from there. These costs do not include any federal or local tax credits and incentives.

While the average cost information provided is a helpful guide, the only way to get an accurate cost for installation of solar panels is to get quotes from reputable solar contractors.

Average Solar Panel Installation Cost
Home SizeAverage Solar Panel Installation Cost
1,500 sq. ft.$16,500
2,000 sq. ft.$21,500
2,500 sq. ft.$26,500
3,000 sq. ft. $31,500

Solar Panel Cost per Watt

Most professional solar installers price out their projects based on the system’s wattage or size. Solar panel cost per watt ranges from $2.50 to $3.50 on average, including installation costs. While larger panel systems have a higher upfront cost, they produce more power and offer a lower average cost per watt.

Many states and municipalities offer rebates and tax incentives. For specific programs and eligibility requirements in your area, check out the Database of State Incentives for Renewables and Efficiency (DSIRE).

Cost per Solar Panel

The average U.S. home requires between 17 and 25 solar panels. The number of panels you purchase contributes toward the amount of kW of electricity produced each day.

Cost per Solar Panel
Home SizeHow Many Panels You May NeedAverage Cost Range per Panel
1,500 sq. ft.15 to 18$917-$1,100
2,000 sq. ft.16 to 25$860-$1,344
2,500 sq. ft.18 to 32$828-$1,1472
3,000 sq. ft. 20 to 40$787-$1,575

The more of your electricity costs you want absorbed by solar, the more panels you need. If you only want a portion of your power to be produced by solar, you won’t need as many panels. To determine how many panels your home needs, get in touch with a professional solar installer.

Residential Vs. Commercial Solar Costs

Commercial-grade solar panels are constructed with more PV cells to absorb enough solar energy to power larger buildings. While their average cost per watt is lower on average compared to residential installations, commercial solar panels are larger and more expensive.

Federal and Local Incentives and Tax Credit

Solar panel installation is a major home improvement project and a significant investment. Fortunately, there are several federal and local incentives that reduce the financial burden and accelerate your return on investment.

The Federal Solar Tax Credit provides homeowners with a one-time tax credit of 30 percent of solar installation costs. This incentive can offer significant savings, reduce the solar payback period, and improve your return on investment.

States and local governments also offer a variety of solar rebates and tax incentives. Find your local solar policies and programs through the Database of State Incentives for Renewables and Efficiency (DSIRE).

Factors Affecting Solar Panel Costs

In addition to the type of solar panels you choose, there are several other factors that impact the cost of your home’s solar installation.

Sun Exposure

Homes that are closer to the equator will more than likely have lower costs than those further away. They typically benefit from more solar energy production and do not require as many panels for optimum efficiency.

Map of solar potential for each U.S. state

Panel Quality

Common solar panel issues include corrosion, delamination, cracking, and hot spots. Investing in quality solar panels reduces the risk of defects and the need for costly repairs and replacements.

Panel Efficiency Rating

Solar panel ratings measure how efficiently a panel converts solar energy to electricity. Panel efficiency ratings average between 15% to 20%. Panels with a higher efficiency rating mean your home will require fewer panels to meet your household’s requirements.

System Size

Most solar installation system sizes range from 3kW to 10kW. A typical system for a 2,000 sq. ft. home is a 5kW or 6kW. Larger system installations cost more on average.

Roof Type and Condition

Your rooftop’s solar potential will impact how many solar panels you will need. Flat or complex roofs may need specialized mounting systems and additional labor to install. If your roof is damaged, you may have to include repair costs before solar installation begins.

Equipment Costs

Your system will also require a solar inverter that converts direct current (DC) power from the panels into the alternating current (AC) you can use in your home. Your solar quote will also include costs for solar mounts, a racking system that attaches solar panels to your roof.

Installation Cost

Local labor costs for solar installation will change depending on your area and the average costs solar installers charge in your area.

Regulatory and Permit Costs

There may also be costs for any local permit fees, inspection fees, and taxes on the solar panels.

Solar Cost Savings and Return on Investment

In addition to its positive environmental impacts, solar panel installation can offer homeowners significant cost savings over time.

One of the primary cost benefits of going solar is the monthly savings on utility bills. Exact savings will depend on your household’s energy usage, solar system size, and local electricity rates. On average, a 5kW system can save households approximately $1,300 per year or $26,000 to $39,000 over its lifespan.

It is also important to factor in solar panels’ payback period, or long it takes to break even on a solar panel investment. The average payback period is seven to 10 years, however the Federal Solar Tax Credit, along with any available state and local incentives, may shorten this period. Average payback periods vary by state — the National Renewable Energy Laboratory offers a helpful payback calculator to estimate your energy savings.

Going solar may also impact your home’s property value. According to Zillow, homes with solar panels installed sold for 4.1% more compared to similar homes, resulting in an average $9,274 bump in sales price.

Solar Installation Cost Takeaways

Panel efficiency improvements, federal and local incentives, and long-term cost savings make this a great time to go solar. Calculators and project cost averages are helpful tools to get you started. For a full evaluation of your home’s energy needs and competitive estimates, let Modernize connect you with professional solar installers in your area.

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FAQ

How much do solar panels cost?

The national average cost of a solar power installation is $16,500. That number varies depending on the size of your home and your geographical location. Here’s what it might cost for your home in particular.


Do I need inverters for solar panels?

Yes — solar panels do not work without inverters. Inverters are what take the energy from the sun and make it usable for your home.


Do homes with solar panels sell for money than homes without solar panels?

Homes with solar panels sell for more money than homes without solar panels in the majority of the U.S. If you are planning to sell your home in the next five years, factor your increased sales price into the overall ROI for your solar panel installation.


How much do solar panels cost for a 2,000 square foot house?

Though the only way to find an exact cost for solar panels for your home is to get a quote, you can estimate cost using the following:


Start with the national average price of $16,500 for solar panel installation for a 1,500 square foot home. From there, add/subtract $10 for every square foot of home.


So, if you start with the above average, and then add $5,000 on for an additional 500 square feet of space, you can estimate it will cost $21,500 for solar panels for a 2,000 square foot home.