Solar prices hit all-time lows in 2024—is that about to change?

Thinking about installing a new solar panel system for your home this year? If trends from 2024 found in EnergySage Intel’s Solar & Storage Marketplace Report continue, you could be looking at the most affordable cost since EnergySage started tracking quoted solar prices in 2014.

The report found that the median cost per watt of installing a solar panel system continued a downward trend seen over the last 18 months, putting the price for a median-sized system of 11.5 kilowatts (kW) at just $28,750 before state and federal incentives. That comes out to an all-time low of just $2.50/watt ($/W) for systems installed across the U.S., an impressive decline of more than 33% over a decade compared to 2014, when the median price was above $3.75/W.

But with looming tariffs, could we see this declining price trend start to reverse this year?

Households that added solar panels in the second half of 2024 saw big price advantages, whether they chose to include a battery or not. The biggest benefit came from the falling cost of residential solar panels themselves, which plummeted 30% compared to the previous year, according to pricing data from Wood Mackenzie. 

Higher interest rates and relatively stable residential electricity prices also pushed installers to offer more aggressive pricing to stimulate demand, with median prices falling 6.4% compared to the first half of the year for all quotes and dropping 5.4% for quotes that did not include batteries.

Systems that included batteries saw the biggest price per watt reduction of 7.3%, primarily due to the surge in popularity of Tesla’s Powerwall 3. This battery includes an integrated hybrid inverter that works for both the solar and storage system components. Because the inverter comes with the battery, its cost is reflected in the storage pricing (price per kilowatt-hour, $/kWh), rather than the solar pricing, considerably bringing down the price per watt of quotes that include it.

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Even in states where solar uptake has been strong and prices have already fallen continuously, costs declined in the second half of 2024. The biggest drops came in New York and Connecticut, where the median price/watt fell 6.5% and 6.7%, respectively.

Demand for household solar systems had different drivers across the 10 states that round out Ohm Analytics’ top residential solar markets (based on predicted installed capacity in the second half of 2024). Despite still seeing relatively high solar prices, Massachusetts, Illinois, New York, New Jersey, and Connecticut were all popular states to go solar. Access to lucrative state incentives—like solar renewable energy credits (SRECs), rebates, and tax credits—as well as higher-than-average electricity prices (in every state except Illinois) encouraged homeowners to go solar in these states.

On the other hand, top states like Florida, Texas, Nevada, and Arizona had lower-than-average electricity prices. However, relatively low solar prices coupled with abundant sunshine in these communities—at least 99% of their electricity use was predicted to be offset by solar generation—still drove high solar adoption.

California had a mix of everything: Relatively low solar prices, exorbitant electricity prices, and some helpful solar incentives. However, the Golden State implemented its new Net Billing Tariff in 2023, which significantly lowered solar export rates and softened demand for solar. As a result, California solar installers have priced more aggressively, which helped the state maintain its position as the top residential solar state. 

While nationwide prices reached an all-time low, some states still see high solar prices: In Tennessee, prices increased 8%, reaching $3.35/W—the highest price on EnergySage and 34% above the national median. The state has historically lacked basic solar incentives like net metering, which has discouraged installers from entering the market, lowering the competition. 

In contrast, in Arizona, the lowest-priced state, the median price per watt fell 5.2%, dropping below $2/W for the first time on record; it has a strong solar market due to its abundant sunshine and past history of robust solar incentives. 

With some states lagging behind the overall trend of declining solar prices, the gap between the highest- and lowest-priced states actually grew more than 13%, from $1.2/W in the first half of 2024 to $1.36/W in the second half.

Though solar prices have fallen for close to two years, dropping dramatically since EnergySage began tracking in 2014, changes in the political atmosphere could potentially reverse the trend in 2025. U.S. officials announced new tariffs on solar panels from countries in Southeast Asia ranging from 41% to as high as 3,500%—primarily due to allegations from several U.S. companies that foreign producers sought to flood the U.S. market with unfairly subsidized equipment. 

Steep tariffs like these could raise home solar installation prices overall, but it’s not all doom and gloom: Domestic production of solar panels increased by nearly 400% between 2022 and 2024, taking some pressure off potential price spikes from changes to tariff policies for overseas suppliers.

While the Trump administration has largely been critical of the 2022 Inflation Reduction Act and many of the tax incentives that came with it, home solar installations have not come under fire yet. In fact, EnergySage noted that the president expressed support for rooftop systems on the campaign trail in 2024—though solar was left out as an energy source in Trump’s “Declaring a National Energy Emergency” executive order. 

The current administration’s policies have been anything but predictable, but so far, the 30% federal tax credit, residential solar’s best incentive, has remained intact. If that changes, the industry will likely see softer demand, which could encourage lower prices.

With all-time low solar prices, looming tariffs, and unpredictable incentives, now is the best time to go solar. There’s no way to know for certain what will happen to solar prices in 2025, but one thing’s for sure: Electricity prices are skyrocketing. Every day you wait to go solar, you’re putting money directly into your utility company’s pocket instead of your own.