Solar panels will generally cost $20,498 in 2022. For a 10 kW system, that comes to $2.77/W after subtracting the federal solar tax credit of 26%. The size of the solar system, the state where it is installed, and the brand of the panels will all be taken into account when determining the price of solar in this article.
Key takeaways about solar panel cost
– Total average solar installation cost ranges from $17,538 to $23,458 after the 26 percent federal solar tax credit.
– The cost of solar has fallen about 13 percent over the past 5 years.
– The best way to get a fair price for solar?
Solar panel cost in 2022
A solar panel installation will cost between $17,538 and $23,458 in 2022 when the federal solar tax credit is taken into account. Costs for a single solar panel range from $200 to $250. After applying the federal solar tax credit, the average cost of a 10 kilowatt (kW) solar panel installation is $20,498 ($27,700 without the benefit). In 2022, the average cost per watt ($/W) for solar panels will be $2.77.
Solar installations are a special kind of product since the typical cost of solar panels can vary greatly depending on your state and the manufacturer of the solar panels you choose. The following are the main variables that affect the cost of solar installation:
- System size: Your solar panel system will cost more the larger it is. Importantly, the average cost of solar energy per unit falls as system size rises.
- Location: Pricing varies by state as a result of regional quotation patterns as well as variations in system sizes; thus, regions with higher average system sizes will have lower average solar costs.
- Panel brand and quality: Like any product or appliance, solar panels come in varying quality.
- Roof characteristics: The price of installing solar panels includes more than simply the cost of the hardware. The intricacy of the installation will also be charged for by your solar contractor, so if your roof is complicated, your system may end up costing more.
- Labor: The labor prices charged by various solar providers vary. You might decide to spend more money with a more renowned business that has higher ratings and a quicker installation schedule.
- Permitting and interconnection: Paying for permits and your hookup fee to the grid will somewhat increase the final cost of your solar installation, however it won’t be a significant influence.
A note about pricing: gross vs. net costs
Throughout this article (and all around our website), we usually talk about solar panel pricing in terms of gross cost, aka the cost before any solar rebates and incentives that can reduce the upfront cost of solar, or even get you some money back over time. For example, our cost per Watt ($/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.
What impacts the cost of a solar panels?
The sticker price a solar installation charges you is based on many factors. The cost of solar installations is a unique product; it greatly depends on your own circumstances, as well as your usage of power and other things. The following are some of the most important considerations that may and do affect the price of solar panels for your home:
System size
The size of the system you buy is perhaps the most noticeable and important aspect in the cost of a solar panel installation. Simple enough: larger systems with more panels will be more expensive than smaller systems with fewer panels (and lower energy output). A larger system has a lower average $/W, but there is also that Costco-like link between system size and price. Like when you buy food in bulk, the overall cost is greater but the cost per unit is cheaper. Following are the $/W results that EnergySage Marketplace data indicates for various system size buckets and what those results would be for a complete system:
Cost of solar panels by system size
NOTE: The price per watt in this table is the typical cost for that range of system sizes, i.e. $3.28 is the typical price per watt for systems ranging from 2 kW to 2.99 kW.
These costs indicate the price of a solar energy system before and after the federal solar tax credit, which saves you 26%, has been taken into account. You may be able to save more money by taking advantage of rebates and other tax advantages provided by some states, local governments, and utilities.
Keep in mind that larger solar power systems may cost more up front, but they will certainly end up saving you more in the long term. You might have to pay more up front if you build a 10 kW solar energy system that supplies all of your power needs, but you’ll be reducing a sizable monthly expenditure – your utility bill – and saving more money as a consequence. A solar panel system that may completely offset your power cost and optimize your solar savings is now even easier to purchase thanks to the rising prevalence of zero-down, low-interest solar loans.
Location
The cost of installing solar panels varies by region, mostly by state. Although the pricing variation is not very large and most regional variations are really caused by variations in system sizes and incentives, it is nevertheless important to keep an eye on.
In order to understand the costs of solar panel systems by state, we have examined quotation data from our solar marketplace. However, as we previously stated, system sizes tend to be higher in places with cheaper prices, so comparing a 10 kW system in Florida to a 10 kW system in Massachusetts isn’t necessarily fair. Their energy requirements are simply too dissimilar.
Cost of solar panels by state
NOTE: These pricing ranges represent system costs BEFORE the federal solar tax credit of 26%. Furthermore, EnergySage does not yet offer quotations in all 50 states, which restricts our ability to provide cost estimates for solar panels in each.
The average amount of energy consumed by households is often higher in places where homeowners must use air conditioning more frequently. As a result, bright, warm areas like Arizona and Florida are home to some of the biggest solar panel installations. Why is this important? The larger your system is, the less solar contractors will typically charge per kilowatt-hour (kWh). It’s similar to buying in bulk at Costco; even though the sticker price may be greater, buying more at once results in reduced per-unit prices. Below, we’ll go deeper into this phenomena.
returning to solar energy. Ultimately, this translates essentially into cheaper $/W pricing in warm states and higher $/W pricing in cold states. However, the overall cost is typically close to a wash since warm areas have cheaper per-watt prices but bigger system sizes, whereas cold states have more expensive per-watt prices but smaller system sizes.
The most important finding from this data is not that some states are “better” than others in terms of solar pricing, but rather that solar is cost-effective everywhere. The $2.77/W national average is within $0.50 cents of almost every state. Solar power doesn’t just make sense in areas of the United States where costs are really low; there is a positive trend toward adoption across states that has nothing to do with where the lowest prices per watt are. For instance, the installed solar capacity in New Jersey, Massachusetts, Virginia, and Georgia, which are all in the top 10 solar states in the United States, is greater than the national average ($/W).
Panel brand and equipment quality
Data on solar panel prices may also be broken down by panel brand. The following table shows the average cost of 6 kW and 10 kW solar panel systems by the brand of solar panels used in the installation project using information from the EnergySage Marketplace.
Cost of solar panels by panel manufacturer
NOTE: These ranges are system prices BEFORE the 26 percent federal tax credit for solar.
To some extent, the cost of a particular brand of solar panels reflects the quality of those panels. Systems utilizing SunPower panels, for instance, have the highest average pricing ($20,580 for a 6 kW system and $34,300 for a 10 kW system), although SunPower is renowned for making high-quality, efficient products.
It’s interesting to see that brand price doesn’t have a lot of outliers, and most manufacturers experience around comparable cost ranges. When comparing system pricing based on panel brands, it’s crucial to bear in mind that there are many other aspects outside just the panel manufacturer that affect the final system price, such as installation expertise, location, racking equipment, inverter brand, warranty, and more.
Roof characteristics
Your overall solar expenses will also depend on your home’s and roof’s features. Installing solar panels on your home will likely be easier for your installer if your south-facing roof slopes at a 30-degree angle because they can likely place all of your panels on a single roof plane with the best sun exposure (better, more direct sun exposure = fewer panels needed, which will reduce your costs). On the other hand, if your roof features dormers, skylights, or numerous levels, finishing the installation may need more work and cost more money.
Labor
The business doing the work is another element of the solar installation puzzle. The ultimate price solar installers give for an installation relies on factors including your installer’s track record, warranty options, and internal operations. Solar installers charge a range of prices for their services. You can see how a reputable solar installer with superior warranty options may charge more for an installation project while still making a profit.
Check out our post on choosing an installation to understand how we screen installers and how you may and should compare them to one another. EnergySage provides the top solar installers straight to you on our Marketplace.
Permitting and interconnection
Although a sizeable percentage of your solar energy system quotation is made up of equipment and labor expenses, interconnection fees and the price of solar permits might also be important considerations. Typically, in order to reconnect your solar energy system to the grid (also known as “interconnection”), you must get a few solar permission paperwork and pay a charge. The Department of Energy’s SolarApp+ is working to make the interconnection process less expensive and quicker for everyone. This area is seeing some interesting work done to keep the prices and time lag to having an approved interconnection down.
Solar costs over time continue to fall
Not always was a solar panel system $2.77/W. The cost of solar panels was about 13 percent greater just five years ago than it is today:
Prices will probably continue to decline even more in the future, despite the fact that they are now flat as a result of supply chain restrictions. The solar sector is still in its infancy, so there is still room for innovation (and regulatory reforms). Solar buyers should start to notice some of those cost savings influencing their solar sticker price as manufacturing and installation procedures develop and become even more effective.
Reduce your solar costs with rebates and incentives
We’ve been discussing the costs that go into a solar installation, but it’s also critical to think about how you may save money with solar rebates and incentives. You may recoup the cost of a solar system through tax credits, cash rebates, performance-based incentives (PBIs), and energy credits, among other methods. Since utilities, localities, and states all often provide their own solar incentives to residents residing in their service regions, the availability of these incentives nearly always depends on where you live.
The federal solar tax credit: solar’s best incentive
The federal solar tax credit, often known as the investment tax credit, is the biggest incentive in the nation for adopting solar (ITC). There is no restriction on the amount of this incentive, which enables you to deduct up to 26 percent of the cost of installing solar panels from your federal taxes. For instance, a 10 kW system costs $27,600 at the national average price ($2.76/W). The ITC, on the other hand, would allow you to deduct $26% of that expense, or $7,176, from your taxes. This effectively brings your system’s price down to the $20,424 figure we mentioned at the beginning of this post.
How do you pay for a solar panel installation?
It’s time to decide how you’ll pay for solar now that you know how much it will cost for your particular project. A cash purchase, a solar loan, or a solar lease/power purchase agreement are the three main ways to pay for a solar panel installation.
In general, if you want to optimize your solar savings, have enough tax obligation to benefit from the solar tax credit, or have the cash on hand to pay for a solar panel system up front, a cash purchase is the best option for you.
If you don’t want to fork over the money necessary to pay for a solar panel system up front, you still want to save as much money as you can on your power bills, and you want to be eligible for all incentives and rebates, a solar loan may be the correct choice for you.
If you would rather that someone else manage and maintain the system, if you are not qualified for tax advantages, or if you just want to lower and/or lock-in your monthly power price, a solar lease or PPA is the correct choice for you.
How does a solar panel installation work?
Solar panel installation is a process that must be followed before they can start supplying your home with electricity. It normally takes between one and three months from the day you sign your contract with your installer until your solar panels are grid-connected and generating electricity for your house. The five steps for installing solar panels are described below:
1. Choosing and order your equipment
Selecting your solar panels and inverters is the first stage in a solar installation; make sure with your contractor so they can purchase everything for you. Solar panels and inverters are the two main parts you must assess for your system. Most homeowners will utilize durability, efficiency, and beauty as their main criteria when evaluating the various manufacturers (other than price). Our guide on selecting solar equipment has further information.
2. Engineering site visit
An engineer (usually an employee or subcontractor of the installer you’re dealing with) will visit your property after you sign your solar contract to examine your home and ensure that everything is suitable with your new solar system.
The engineer will inspect your roof during the visit to make sure it is structurally sound. Additionally, they will examine your electrical panel, the gray box in your basement, to see whether an update is necessary.
3. Permits and documentation
Installing solar panels includes a ton of paperwork, just like any significant financial choice. Fortunately, the installation takes care of the majority of this paperwork. They will assist you in submitting solar incentive applications and completing the necessary paperwork for a legal solar installation.
4. Solar installation: the big day
Every solar homeowner who wishes to rely on renewable energy rather than a utility provider looks forward to the installation day. The actual installation day is broken down into numerous parts, including racking your roof, installing wiring, positioning panels and inverters, and connecting everything. Depending entirely on the size of the system you’re installing, the installation time will range from one to three days.
5. Approval and interconnection
Flipping the switch, so to speak, and starting to generate power from your rooftop is the last stage in becoming solar. A local government official will need to assess the installation and grant their permission before you can connect your solar panels to the electrical grid. The representative will effectively double-check your installer’s work throughout this inspection. He or she will check to make sure the electrical wiring was done properly, the mounting was securely fastened, and the entire installation complies with the required electrical and roof setback requirements.
In conclusion: are solar panels worth it?
The cost of solar is ultimately only as significant as the return you’ll receive from installing solar panels. Solar is often a wise investment for households, and you may “break even” in as little as 7 or 8 years. After that, you are practically producing free power and amassing savings. During that 7 to 8 years, you’ll be producing your own power rather than paying for it from the grid, and owing to net metering regulations, any excess electricity you create you might be able to earn credit for (depending on where you live). And of course, none of this takes into account solar energy’s advantages for the environment.
Frequently asked questions about solar panel cost
How much does a single solar panel cost?
Depending on the quality, the number of monocrystalline or polycrystalline cells, the power output, and the efficiency rating, a single solar panel may cost between $200 and $250. Of course, the overall wattage and number of panels you choose to employ will determine the price of a complete solar system. Divide your entire bill by the total number of watts in your system to determine your price per watt.
What is the cheapest solar panel?
Polycrystalline solar panels are often the most affordable type of solar panel. You should install a smaller system if you want to lower the overall cost of your solar panel installation. Additionally, a simple, well-maintained roof will assist reduce the labor component of your solar cost.
What is the most expensive solar panel?
The most costly solar panel alternatives are typically monocrystalline panels from suppliers like SunPower. Additionally, larger system sizes on more intricate roofs would often cost more.