Solar panel cost in 2024: It may be lower than you think

It costs over $30,000 to install solar panels. That's a big number, but incentives usually lower it significantly.

Edited by: Rich Brown
Updated Jun 3, 2024
7 min read
House while solar panels next to a pile of money

The average U.S. solar shopper needs an 11-kilowatt (kW) solar panel system to cover its electricity usage. Based on thousands of quotes in the EnergySage Marketplace, you'll pay about $22,022 to install an 11 kW system in 2024 after federal tax credits.

If you finance your system with a loan, this number will be higher due to interest rates. Either way, the economics of going solar in almost all cases result in electric bill savings that will pay for your system over time, sometimes a few times over.

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We often reference the cost-per-watt ($/W) of solar to compare the value of a quote against the national average. According to the most recent data from the EnergySage Marketplace, the average cost-per-watt across the U.S. is around $2.86/W before incentives. Your state-level average cost-per-watt will be a more relevant benchmark, but those numbers vary widely. Even with that number, you'll still need to consider the shape of your roof, the incentives in your state or region, and the quality of your solar equipment before you can get a true cost estimate. 

Fortunately, EnergySage can help you determine how much solar will cost you, and how you can lower that price to start saving sooner.

Key takeaways

  • The average cost of an 11 kW solar panel installation on EnergySage is $22,022 after federal tax credits.

  • You'll probably save anywhere from $20,000-$90,000 over 25 years by going solar.

  • Solar panels are just 12% of the total cost of a solar panel installation.

  • Federal and state solar incentives significantly lower the cost of solar for most homeowners–the federal tax credit alone lowers it by 30%.

Average cost of a 11 kW solar panel installation in 2024

Range
Cost Before Federal Tax Credit
Cost After Federal Tax Credit
Low-end$25,960$18,172
Average$31,460$22,022
High-end$36,960$25,872
Check out the EnergySage Solar Calculator for a quick solar estimate

Solar is worth it for most homeowners because it eliminates or significantly reduces your electric bill. It's most helpful to think about solar panels as an investment. It takes an average of 8 years to earn back the money you spend on installing solar panels. After that point, the electricity from your solar panels is free. 

Most homeowners will save $20,000 to $90,000 over 25 years with solar. Your savings depend on a few factors, including your electricity rates and the cost of your system. You can calculate your break-even point, or solar payback period, by dividing the final cost (the total cost of your solar panel system minus any upfront incentives) by your annual financial benefit (the amount you save on electricity combined with annual incentives). The faster the cost of electricity increases, the shorter your payback period and the greater your savings will be.

Lower solar prices also drive shorter payback periods. Ten years ago, a home solar installation cost $3.60/W according to the National Renewable Energy Laboratory. That's 26% more than what we see on EnergySage right now. Solar prices did increase slightly in the last three years, primarily due to the pandemic-related equipment shortages felt in many industries. But, as of 2024, solar is back down to pre-pandemic prices, so it's a great time to get quotes!

See how electricity prices have changed in your state over the past year

If you live in a hot state and require a lot of air conditioning, you'll probably need a lot of solar panels. As we explain more below, most solar installers charge less per watt for larger systems, so your "unit" price could be quite low. 

We generally see this trend on EnergySage (though there are some outliers), with lower $/W pricing in warmer states and higher $/W pricing in colder states. Arizona has the lowest average cost of solar, while Maine and New Hampshire have some of the highest prices. Because you probably need a larger system in sweltering Arizona than cooler Maine and New Hampshire, you may end up paying a similar price overall. 

Average cost of solar by state

State
Average cost of a solar system before Incentives
Average cost of a solar system after incentives
Average tax credit value for a solar system
Average Cost Per Watt
Average 20 Year Savings

Arkansas

$35,958

$25,171

$10,787

$2.64

$22,925

Arizona

$26,736

$18,715

$8,021

$2.16

$20,599

California

$21,765

$15,235

$6,530

$2.67

$65,809

Colorado

$28,588

$20,012

$8,576

$3.10

$17,489

Connecticut

$33,284

$23,299

$9,985

$3.11

$76,948

Washington D.C.

$29,752

$20,826

$8,926

$3.20

$69,446

Delaware

$30,881

$21,617

$9,264

$2.53

$26,851

Florida

$35,958

$22,023

$9,439

$2.29

$43,937

Georgia

$33,163

$23,214

$9,949

$2.82

$13,437

Iowa

$38,963

$27,274

$11,689

$3.09

$18,498

Iowa

$38,963

$27,274

$11,689

$3.09

$18,498

Idaho

$33,403

$23,382

$10,021

$2.85

$10,381

Illinois

$35,771

$25,040

$10,731

$3.15

$47,130

Indiana

$40,086

$28,060

$12,026

$3.43

$12,466

Kansas

$35,596

$24,917

$10,679

$3.08

$19,968

Kentucky

$42,464

$29,725

$12,739

$2.83

$15,139

Louisiana

$36,470

$25,529

$10,941

$2.93

$10,229

Massachusetts

$33,322

$23,325

$9,997

$3.35

$99,499

Maryland

$36,538

$25,577

$10,961

$2.88

$39,379

Maine

$35,583

$24,908

$10,675

$3.42

$25,022

Michigan

$31,581

$22,107

$9,474

$3.16

$15,825

Minnesota

$35,367

$24,757

$10,610

$3.12

$22,579

Missouri

$34,811

$24,368

$10,443

$2.75

$21,269

North Carolina

$34,044

$23,831

$10,213

$2.64

$18,661

New Hampshire

$32,719

$22,903

$9,816

$3.28

$55,440

New Jersey

$32,351

$22,646

$9,705

$2.86

$41,393

New Mexico

$27,438

$19,207

$8,231

$3.12

$18,149

Nevada

$31,910

$22,337

$9,573

$2.54

$54,622

New York

$33,921

$23,745

$10,176

$3.06

$29,791

Ohio

$31,473

$22,031

$9,442

$2.67

$39,812

Oklahoma

$34,155

$23,909

$10,247

$2.55

$29,630

Oregon

$31,935

$22,355

$9,581

$2.78

$29,161

Pennsylvania

$35,307

$24,715

$10,592

$2.90

$48,010

Rhode Island

$31,514

$22,060

$9,454

$3.29

$78,340

South Carolina

$32,537

$22,776

$9,761

$2.51

$31,187

Tennessee

$37,311

$26,118

$11,193

$3.37

$12,415

Texas

$31,331

$21,932

$9,399

$2.35

$56,410

Utah

$27,616

$19,331

$8,285

$2.71

$

Virginia

$37,761

$26,433

$11,328

$2.96

$35,853

Vermont

$30,204

$21,143

$9,061

$2.95

$24,406

Washington

$35,886

$25,120

$10,766

$2.84

$8,412

Wisconsin

$34,026

$23,818

$10,208

$3.07

$27,562

West Virginia

$42,129

$29,490

$12,639

$3.07

$39,841

This data was last updated on June 11, 2024.

Note: These costs are based on EnergySage Marketplace data. EnergySage does not currently provide quotes in all 50 states.

There’s a lot that goes into the sticker price a solar installer charges you. Panels are just one part of the equation. It’s also worth understanding the costs that come from the business operations an installer needs to account for to stay afloat.

Component
Average Cost*
Percentage Of Total Cost**
Solar panels$3,91812%
Solar inverter(s)$3,20510%
Racking equipment$1,0683%
Electrical wiring$2,7309%
Supply chain costs$2,8499%
Sales tax$7122%
Installation labor$2,1377%
Sales & marketing$5,69818%
Overhead costs$3,32411%
Solar installer profit$3,32411%
Permitting & interconnection$2,4938%

*Based on a $31,460 11 kW system before incentives. These are averages for the whole U.S. Costs will always vary from installation to installation. 
**Based on a 2021 study by the National Renewable Energy Laboratory (NREL)

Solar equipment costs

The panels themselves are probably the first thing that comes to mind when you think about going solar, but solar panels represent less than a third of the total solar equipment costs. You can expect all required solar equipment, including supply chain costs and sales tax, to cost $14,500–about 46% of the total system price.

This price depends on the brand and quality of the equipment you select. Systems with SunPower panels, known for a strong warranty and high efficiency, see the highest average prices at about $26,900 after tax credits for an 11 kW system after the federal tax credit. Sometimes the bigger price tag is worth it: Investing in high-quality equipment can lead to better long-term savings. But reaching for the highest-priced panels often isn't the best choice. There are many high-quality options with varying price points. 

The type of panel you install also directly impacts the quality of your installation. Monocrystalline solar panels offer the highest efficiency and power output and are used in most home systems today. They're often more expensive than polycrystalline solar panels, but you need to buy more polycrystalline panels for the same amount of power, so your overall installation costs may be similar. Thin-film solar panels are the cheapest type of panel but they aren’t often used for home installations due to their low production. They're a great option for RVs, campers, and DIY home setups.

Inverters can cost almost as much as solar panels depending on the type you select. They convert the direct current electricity your solar panels produce into alternating current that household appliances use. Microinverters and optimized inverters are similar in price but cost a few thousand dollars more than string inverters. If you have a complex roof with multiple planes or shading, it's usually worth it to select a pricier microinverter or an optimized inverter to maximize your system's production. 

Racking and mounting equipment attaches solar panels to your roof, but it's a relatively low-cost portion of the installation. You'll also need wiring to connect your rooftop system to the grid and your electrical panel, which can add a few thousand dollars. 

Installer costs

Another piece of the solar installation puzzle is the company performing the job. Solar installers charge varying amounts for their services. The final price they offer depends on their track record, warranty offerings, and internal operations. A well-regarded solar installer with premium warranty offerings will often charge more–and it will usually be worth the money. 

Installer costs are about the same as equipment at around $14,500 or 46% of the total installation. Labor is only about 15% of installer costs and profit is generally around 20%. Your biggest installer costs go toward sales, marketing, and overhead.

Permitting and interconnection

Permits and fees can add a few thousand dollars to your installation, accounting for about 8% of the total cost. You'll usually need a few solar permit documents, which your installer should handle. You'll also have to pay a fee for interconnection, which is the process of connecting your solar energy system to the grid. 

There’s some exciting work happening to lower the costs and the interconnection timeline. The Department of Energy’s SolarApp+ aims to make the interconnection process cheaper and quicker for everyone.

Besides the equipment and installer you select, the price you pay heavily depends on other factors related to your electricity use and property. The system size you need to cover your electricity usage, your roof's characteristics, and your location all significantly impact your cost of solar.

System size

It's pretty simple: Bigger solar panel systems produce more electricity and cost more money. But there’s also a Costco-esque relationship between system size and price, where larger systems have a lower average $/W. It’s like buying food in bulk: The overall price is higher, but the per-unit price is lower.

System Size
Average $/W
Cost Before Federal Tax Credit
Cost After Federal Tax Credit
3 kW$3.66/W$10,970$7,679
4 kW$3.47/W$13,881$9,717
5 kW$3.20/W$16,002$11,201
6 kW$3.13/W$18,795$13,157
7 kW$3.06/W$21,437$15,006
8 kW$3.04/W$24,335$17,034
9 kW$2.98/W$26,830$18,781
10 kW$2.94/W$29,410$20,587
11 kW*$2.90/W$31,899$22,329
12 kW$2.86/W$34,353$24,047
13 kW$2.77/W$36,055$25,239

*This number doesn't match the average cost of solar because that number includes all quotes, not just those for 11 kW systems.

It's worth it to get a larger system that covers all your electricity use. You’ll cut your utility bill and save more money as a result. Zero-down, low-interest solar loans are also becoming common. They make it easier to buy a solar panel system that can fully offset your electricity bill so you can start saving immediately.

Roof and home characteristics

The complexity of your solar installation impacts the price you pay. The more direct sun exposure to your roof, the fewer panels you'll need to cover your electricity bill. If you have a south-facing roof that slopes at a 30-degree angle and has full sunlight exposure, installing solar on your home will be relatively easy and cost-effective.

If your roof has multiple planes, dormers, or skylights, solar will require more equipment and labor, driving up your costs. Big trees shading your roof will also set you back $300 to $1,500 to remove them or cut them back. 

You probably don't think about your electrical panel too much, but it's another key component of a solar panel installation. Sometimes, you might need to upgrade or rewire your electrical panel to go solar, which can add a few thousand dollars to your bill. As a rule of thumb, your electrical panel should be at least 200 amps to go solar. 

Location

Solar installation costs can vary depending on where you live. Some areas require larger system sizes to produce the same amount of energy as those with more daily sunlight. Other areas have higher electricity needs due to extreme temperatures. And, in some areas, you'll have access to better incentives, like state rebates and tax credits that can significantly lower your costs.

See how much solar costs vary across the country

Tax credits, cash rebates, net metering, performance-based incentives (PBIs), and solar renewable energy credits (SRECs) are all ways you can get money back on a solar installation. Your eligibility for these types of incentives depends on where you live. Utilities, cities, and states can all offer solar incentives to people living in their service areas.

States with the best solar incentives

These states give out the most free money through solar incentive programs. You don't even need to have a high electric bill for solar to be worth it if you live in one of them:

Solar's best incentive: The federal solar tax credit

The federal solar tax credit, or the investment tax credit (ITC) isn't location dependent. With the ITC, you'll get a credit worth 30% of your entire solar panel installation cost applied to your federal tax bill. There's no cap value. You just need to have a high enough tax bill to take advantage of it. 

For example, with a 10 kW system that costs $28,600, you'd get a credit worth $8,580. If you don't have a big enough tax bill to take advantage of the full credit, you can roll over the remaining value to the next year.

How you pay for solar impacts your total cost and long-term savings. There are three main ways to pay for home solar: 

  • Purchase it with cash. If you have a large enough tax bill to take advantage of the ITC and can pay for your system upfront, a cash purchase will give you the best long-term savings.

  • Take out a solar loan. A solar loan is right if you don’t want to shell out the cash required to pay for a system upfront. Some solar loans don't require any money down, allowing you to start saving on day one. You'll own your system, so you'll receive any available incentives.

  • Sign a solar lease. A solar lease or power purchase agreement (PPA) is a good option if you’d prefer someone else to monitor and maintain your system or if you don't have a tax bill to take advantage of the ITC. Just keep in mind, you won't own the panels on your roof and you'll have the lowest long-term savings with a lease or PPA.

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