How much do home solar panels cost? (updated for 2021)

A couple decades ago, home solar panels were prohibitively expensive for the average homeowner and were limited to enthusiasts running low power, off-grid setups for small homes, such as a cabin in the woods.

Today, prices have dropped to the point where an average homeowner can affordably install enough solar panels on their roof to provide 100% of their electricity needs. So what can you expect to actually pay for a system like this?

The answer is: it depends. It depends on how much electricity you use, which way your roof is pointing (if you’re planning a rooftop installation), how much shade you get, what your local climate is, and more. You can use our calculator to get a quick estimate, or get multiple quotes from solar installers for an exact number.

Here’s what a home solar system invoice looks like

I had my home solar system installed back in 2013. Apart from an encounter with some angry squirrels, the system has been maintenance-free. In many months of the year, I generate more electricity than I use and pay only the minimum monthly charge.

The price of solar panels has declined since I installed my system, but I thought it’d be informative to share my actual invoice, before incentives.

This was the gross price of the system before three different incentives that were available to me at the time: a federal tax credit of 30%, a New York state tax credit worth 25% (up to a maximum of $5,000), and a NYSERDA incentive.

After subtracting all those, my bottom-line price was less than $7,000. Some of those incentives, such as the NYSERDA rebate and the federal tax credit, have shrunk since 2013. However, solar equipment has gotten better, so your gross per-watt costs will likely be lower than mine.

Solar panel price comparison: 2013 vs today

My solar panels, which are an older polycrystalline module, cost $2.66 per watt back in 2013.

(Note: if you see per-watt costs mentioned elsewhere, this usually refers to the total system costs and not just the panels.)

That’s pretty expensive compared to what you can get today. If you go to one of the online retailers, you can find premium solar panels (such as LG) for about $1.00 per watt.

Less expensive brands can cost around $0.55 per watt. Even those that may be considered “budget” brands are often made of monocrystalline silicon that are higher quality than the ones I installed in 2013.

The average home installation today is 6.4 kW in size, so the table below reflects the average cost that a person might pay for a home solar panel system in 2021.

These are approximate, of course. The price you get from your installer will depend on the products they offer, their profit margin, and other factors.

Microinverter prices: 2013 versus today

My system uses Enphase M215 microinverters, which is an older generation of the Enphase microinverter product line. On my invoice, they cost $96 per unit.

Today, you can purchase the latest generation Enphase IQ7 for $68 each. That’s 70% of the per-unit cost compared to 2013, but it’s even better than that because the IQ7 is a more capable unit that supports up to 350 watts, compared to the 270 watt capacity of the M215.

Balance of system costs

The other costs listed for my installation - racking, wiring, engineering design, and installation labor - don’t benefit from the same technological and manufacturing efficiencies that have caused the price of hardware to decrease.

These are known as soft costs, and are a higher proportion of a home solar invoice now than when solar panels were more expensive.

Soft costs like these can vary widely from installer to installer, and not all of them break out into line items like mine did. If you’d like see a more detailed breakdown of your system costs, just ask your installer.

Other expenses you might have

Mine is a pretty typical invoice, but yours will look a little different or may include other costs that I didn’t have. For example, many people have home with older electric panels that don’t have the capacity to handle the addition of a solar array with several thousand watts of output. The cost of such an upgrade varies considerably, from several hundred up to a couple thousand dollars.

Other possible costs might be roof related. For example, tile roofs are more complicated to work with than the more common and cheaper asphalt shingle roofs. This is especially true if you have clay tile, which is very brittle. In fact, many solar installers won’t work with a home that has clay tile, as they would be liable for any damage that occurs during installation.

Other types of tile are less brittle, but the installation work is almost always more complicated with tile roofs, and therefore more expensive.

What can I expect to pay for solar panels?

My invoice gives you an idea of what to roughly expect when you get a quote on a home solar system, but mine is a relatively small 4.6 kW array that was installed in 2013. Your actual costs will depend on how much electricity you want to generate.

The best way to do that is to get multiple quotes from local solar installers. However, if you’re just starting to think about solar, you might not want to take the step of contacting companies just yet. That’s understandable, and it’s the reason why I created the Solar Nerd calculator, which gives you a pretty reasonable estimate of your system costs with just a few pieces of data. You don’t need to provide any personal information either.

The calculator will give you a quick estimate of the price tag of your system, the incentives you can be eligible for, and your payback period.

However, when talking about the price of solar, you’ll often encounter a few technical terms that might be confusing if you don’t think about electricity much, such as watts and kilowatts. These are explained in the next section.

Watts and kilowatts

Home solar systems are sized in watts. A watt is an electrical unit of power, and you’ll see it mentioned on the label of many electrical products around your home. To get an idea of how much electricity one watt is, here’s a table of the wattage of some common electrical products around your home:

In comparison, the size of the average home solar system that is installed in the US today is 6,500 watts, or 6.5 kilowatts (because 1,000 watts is equal to 1 kilowatt). This means that if the conditions are perfect, the average home solar array would generate enough power in real time to power a central air conditioner.

(Of course, conditions are rarely perfect, and the nameplate power rating of a solar panel is only reached in ideal laboratory conditions. Read our article on solar panel specifications to learn more about this.)

Price-per-watt explained

Every home has different energy needs, so the average 6.5 kilowatt system might not be the right size for you. Because of this, it makes sense to standardize the price of solar by describing it in terms of price per watt, which is simply the gross price of the system divided by the number of watts. This allows you to fairly compare the price of different systems, regardless of their size.

For example, if a 6.5 kW system costs $20,000, its price-per-watt would be $3.07/W. If the same system instead sold for $15,000, its price-per-watt would be $2.31/W. This allows you to make an apples-to-apples price comparison of different systems.

Price-per-watt is the fully installed cost of the system including applicable sales taxes, but should exclude any incentives such as the federal tax credit.

How much does home solar cost in the United States?

The price-per-watt of home solar differs across the United States. Here’s a table of the median price-per-watt of solar for different states in the US, and how much a 6.5 kW system would cost at that price. (If your state isn’t listed, use the US Overall data instead.)

As you can see, there’s quite a bit of variability between different states. This can be explained by the size of the solar market in each state, the number of competing installers, differences in state policy such as sales tax exemptions, and different hardware costs.

About this data

These numbers are based on research by the Lawrence Berkeley National Laboratory and is published annually in a report called Tracking the Sun. This pricing data is based on the actual prices paid by solar homeowners. It differs from other sources such as EnergySage, which reports quoted prices but not the actual, final prices paid by solar purchasers.

Because this data is based on real prices paid, the Berkeley Lab numbers should be considered more accurate.

Solar pricing variability

The numbers above are median prices, which means that roughly half of people paid more, and half of people paid less.

For all states, the range of prices in the Berkeley database is quite large. For example, while the US median price-per-watt is $3.72/W, the 20th percentile (meaning that 20% of people paid less) is $3.05/W, and the 80th percentile (meaning 80% of people paid less) is $4.48/W.

That’s a big range, and it reflects the different hardware choices, price competition, and regional price differences across the country.

Larger systems have lower price-per-watt

The biggest part of the cost of a home solar system isn’t hardware, but soft costs. These are things with relatively fixed costs for the installer such as permitting, labor, supply chain costs, and overhead.

This is why it’s cheaper on a per-watt basis to buy a larger system, and more expensive to buy a smaller one.

For example, while the median cost of solar in the US is $3.72/W, residential systems that are very large (more than 12 kW) have a price-per-watt of $3.28/W, and very small systems (2 kW) cost $4.22/W.

How much does one solar panel cost?

You can go to a website that sells solar panels for the DIY crowd, such as GoGreenSolar.com.

Right now, they’re selling a 310 watt panel from a budget manufacturer (Phono Solar) for $227, which works out to $0.73/watt.

At the premium end, they’re selling a 335 watt LG NeON 2 panel for $415, or $1.24/watt.

In other words, you can expect one solar panel to cost a few hundred bucks, with a wide range in price between premium and budget manufacturers.

Does it make sense to pay a lot more for a high end panel? Sometimes. While the cost of the panel can be a lot higher, you will usually get a better warranty that sometimes includes the labor cost for replacement. In addition, a premium panel with higher efficiency means that you need fewer supporting components such as racking, wiring, and microinverters.

Incentives significantly lower the cost of solar for many

While the median price for an average size home solar system is $23,000, homeowners will pay less because of the federal tax credit, and some will pay much less - as little as half the gross price.

For example, in 2021 the federal tax credit is worth 26% off the gross price. But if you live in New York state, for example, you also get a state tax credit worth an additional 25% off up to $5,000. Finally, NYSERDA offers another rebate worth up to $0.20 per watt in some cases. This makes New York one of the best states for solar, even though it isn’t the sunniest.

Many other states, municipalities, and utility companies also have significant incentives. You can find out what they are by using The Solar Nerd calculator and entering your zip code.

Bottom line: solar is affordable for many

Back in the late 1970s, the cost of solar panels alone for a 6.5 kW system would cost $64,000, and that doesn’t even include inverters, racking, and installation. Today, that same system, fully installed, is about $23,000 in the US.

Solar continues to get cheaper, but incentives are also being reduced, so it’s probably best to take advantage of the incentives while you can rather than waiting for solar hardware costs to drop further. Don’t forget to get multiple quotes so that you can compare the prices and hardware offerings from different installers.