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How much do solar panels cost in 2023?

A residential solar system can range from $10,000 to over $30,000

Get your free solar cost estimate.

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    Solar panels generate “free” electricity, but installing a solar energy system still costs money. The average home solar system costs $16,715 after the federal tax credit in 2023.

    Key insights

    • The average cost for a residential solar power system is currently $2.50 to $5 per watt before incentives.
    • It typically takes five to 15 years to break even on installation costs.
    • It's worth it if the loan payments for your solar panels are cheaper than your existing electricity bill.

    Average solar panel cost by state

    The average price for a 6-kilowatt (kW) system (after federal tax credits) is $11,810, but costs vary by state based on labor rates, local incentives, solar equipment quality and other factors. Depending on the size of your roof and your energy needs, you could pay anywhere from $10,000 to $30,000 or more.

    The national average cost to install solar panels is $23,879 before the 30% federal solar investment tax credit (ITC), according to data from EcoWatch. After applying the credit, the price drops to $16,715.

    » COMPARE: Best solar energy companies of 2023

    Average cost per wattTypical system sizeAverage cost after ITCPayback period*Estimated net savings
    Alabama $2.45 11.5 kW $19,723 11 years $28,590
    Alaska $2.41 6 kW $10,122 7 years $34,500
    Arizona $2.61 11.5 kW $21,011 12 years $23,891
    Arkansas $2.54 11 kW $19,558 13 years $15,567
    California $2.73 4.5 kW $11,466 8 years $30,000
    Colorado $2.69 7.5 kW $14,123 12 years $14,479
    Connecticut $2.80 7.5 kW $14,700 8 years $42,705
    Delaware $2.58 9.5 kW $17,157 12 years $29,016
    Florida $2.53 11.5 kW $20,367 12 years $21,500
    Georgia $2.55 11 kW $19,635 12 years $23,182
    Hawaii $2.67 5.5 kW $10,280 6 years $49,459
    Idaho $2.60 10 kW $18,200 14 years $11,478
    Illinois $2.73 7.5 kW $14,333 12 years $16,585
    Indiana $2.68 9.5 kW $17,822 12 years $21,994
    Iowa $2.77 9 kW $17,451 12 years $17,572
    Kansas $2.59 9 kW $16,317 11 years $21,455
    Kentucky $2.34 11 kW $18,018 12 years $20,247
    Louisiana $2.57 12.5 kW $22,488 14 years $13,646
    Maine $2.83 5.7 kW $11,886 10 years $25,880
    Maryland $2.77 10 kW $19,390 12 years $21,395
    Massachusetts $2.94 6.5 kW $13,377 8 years $33,013
    Michigan $2.81 7 kW $13,769 10 years $23,652
    Minnesota $2.84 8 kW $15,904 12 years $17,546
    Mississippi $2.64 11.5 kW $21,252 13 years $20,147
    Missouri $2.59 10.5 kW $19,037 13 years $18,292
    Montana $2.54 9 kW $16,002 13 years $15,189
    Nebraska $2.83 10.5 kW $20,801 14 years $13,421
    Nevada $2.52 10 kW $17,640 12 years $18,319
    New Hampshire $2.91 6.5 kW $13,241 9 years $28,409
    New Jersey $2.77 7 kW $13,573 10 years $23,806
    New Mexico $2.68 7 kW $13,132 12 years $15,413
    New York $2.94 6.5 kW $13,423 10 years $24,387
    North Carolina $2.54 6 kW $13,815 13 years $20,035
    North Dakota $2.42 11 kW $18,634 13 years $26,028
    Ohio $2.56 9.5 kW $16,128 12 years $19,272
    Oklahoma $2.62 11 kW $20,174 14 years $14,190
    Oregon $2.60 9.5 kW $17,290 14 years $23,058
    Pennsylvania $2.55 8.5 kW $15,173 10 years $23,634
    Rhode Island $2.84 6 kW $11,928 8 years $34,519
    South Carolina $2.72 11 kW $20,944 12 years $24,561
    South Dakota $2.39 10.5 kW $17,566 12 years $22,923
    Tennessee $2.49 12 kW $20,916 13 years $19,688
    Texas $2.69 8.5 kW $21,654 13 years $21,350
    Utah $2.68 8 kW $15,008 14 years $10,202
    Vermont $2.87 6 kW $12,054 9 years $26,468
    Virginia $2.75 11 kW $21,175 12 years $21,692
    Washington $2.69 10 kW $18,830 16 years $10,846
    West Virginia $2.64 11 kW $20,328 13 years $19,893
    Wisconsin $2.60 7 kW $12,740 10 years $21,005
    Wyoming $2.57 9 kW $16,191 13 years $14,959
    *When you pay upfront

    How much does it cost to install solar panels?

    Most installers set the price according to the system's wattage, with the average cost between $2.50 and $5 per watt. The cost per watt is the price for each unit of energy the solar panel system can produce — if a 5-kW (5,000-watt) system costs $3 per watt, the system's total cost is $15,000 (5,000 watts x $3 per watt).

    The difference between $3 and $4 per watt can add up to thousands of dollars.

    For example, a ConsumerAffairs reviewer, Brad in California, was quoted almost $26,000 for a 5-kW system, which works out to $5.20 per watt.

    Brad said that “for a 4.97-kW system … it should be priced between $13,071 and $17,047. I personally would have expected a price of $13,668 for a 4.97-kW system ($2.75 per watt).”

    If you just need a few panels for a small do-it-yourself project, expect to pay around $200 to $350 per panel (between 80 cents and $1.40 per watt). It’s still worth it to get a few quotes on any size system — the difference between $3 and $4 per watt can add up to thousands of dollars.

    » FIND: Best cheap solar panels

    Solar panel installation cost breakdown

    Your energy needs determine how many panels you need, which affects the overall price of your home solar system installation. Local climate and the availability of sunlight in your area also play a role in how much you end up paying.

    Your energy needs
    You must generate 100% of the electricity your home needs if you plan to eliminate your electric bill entirely. Most American homes end up needing 15 to 30 panels to meet their electrical demands. The standard size for solar panels is about 5½ feet long by 3 feet wide, so consider the size of your roof.

    Larger systems require more materials and labor to install, so they generally cost more than smaller systems. If you have limited roof space, you might need to get more efficient (and more expensive) panels.

    » DO YOU KNOW? How do solar panels work ?

    Type and quality of panels
    Not all solar panels are created equal. Here are the top three things to look for as you compare options:
    • Durability: Solar panels are designed to last for decades , so they should withstand harsh weather conditions and extreme temperatures. Look for panels with a strong frame and tempered glass.
    • Efficiency: Higher-efficiency panels convert more sunlight into electricity, meaning you can generate more power with fewer panels. Look for panels with a high efficiency rating — typically above 18%.
    • Warranty: Panels typically come with warranties that range from 10 to 25 years. A longer warranty indicates that the panel manufacturer is confident in the quality of its product.

    Of the three types of panels available, monocrystalline and polycrystalline panels are most commonly used to power homes. In general, monocrystalline panels are more efficient, but they’re also more expensive than polycrystalline panels .

    » FIND: Best solar panels in 2023

    Hard and soft costs
    Installing a solar panel system has two main expenses: hard and soft costs. Hard costs are the materials needed for the design, such as the panels, wiring and inverter. Soft costs are associated with labor, permits, deposits and administrative expenses.

    Solar panels — the main component of a home solar system — usually make up the largest portion of the cost, but other hardware, such as the inverter, plus labor and permits, factor into the overall price as well.

    • Inverter: A solar inverter converts the generated DC electricity into AC electricity that can be used to power your home. The cost of an inverter depends on its size and efficiency, but these devices typically cost between $1,000 and $3,000.
    • Battery: You might also want to buy a solar battery for home energy storage. One battery can increase your system’s cost by $14,000 (although part of this is labor).
    • Mounting system: This is what holds rooftop solar panels in place. Costs vary depending on the type of installation, but it generally costs between 7 cents and 20 cents per watt.
    • Electrical wiring and hardware: This includes the wiring, switches and circuit breakers required to connect the solar panel system to your home's electrical system. Electrical wiring and hardware costs typically range from 10 cents to 20 cents per watt.
    • Labor: The cost to install also includes hiring an electrician, who handles wiring, hooking it up to your house and setting up various electronics to convert the power from the panels to the same AC voltage as you have in your home.

      Labor costs usually range from 50 cents to $1 per watt but can vary greatly depending on where you live and the complexity of the installation.

    • Permits: Permits ensure the solar panel installation is safe, follows regulations and can qualify for incentives and rebates. Fees vary based on location, but residential solar permits typically cost a few hundred dollars.

      Some state regulations cap permitting fees (Colorado caps them at $500 for residential projects and $1,000 for commercial projects; California caps residential fees at $450).

    » MORE: 60-cell vs. 72-cell solar panels

    The condition of your roof
    Get a thorough inspection of your roof now and make sure you get pictures. It’s better to take care of roof repairs before installing solar panels — it’s more cost-effective than removing the panels and reinstalling them later.

    A reviewer in California told us they discovered leaks in their roof a year after installing panels. They said the solar company charged $5,000 “to take the panels down and reinstall them after the roof was replaced,” and “if I had known the roof was in such bad shape, I would've replaced the roof before installing the panels.”

    » MORE: Should you replace your roof before going solar?

    Federal and state incentives
    The federal solar tax credit , also known as the Investment Tax Credit (ITC), is a tax credit for 30% of the total cost of a new solar PV system. Homeowners, businesses and nonprofits can qualify, but there are some limitations. For example, you must own the panels — solar leases and power purchase agreements (PPAs) do not qualify for the tax credit.

    State and local incentives also help reduce the initial cost, but not everyone can take full advantage of them.

    Each state is different when it comes to solar. Some — like New Jersey and Arizona — offer sales and property tax exemptions to incentivize buying solar energy equipment. Others, such as Kentucky — not so much.

    Be sure to take advantage of state clean energy programs when you can to lower your upfront cost and shorten your payback period. Look for policies and incentives by state through the Database of State Incentives for Renewables & Efficiency (DSIRE).

    » FIND OUT: Where your solar savings go the furthest

    How much do solar panels save?

    Switching to a home solar system could reduce your energy bill by 75%. The savings you see will vary based on your electricity rates, the climate and your particular energy needs.

    Like a lot of solar energy customers we talk to, Brandie in Texas took their “electricity bill down significantly, so even with the price we're paying for the solar panels and the amount of electricity we're using … it's still much cheaper than what we were paying before we had them.” Diana in Pennsylvania told us their electric bills are between $0 and $10, even in the summer, after going solar.

    Depending on your out-of-pocket costs for a solar power system, it could take seven years or longer to break even, according to Wayne Turett, the founder of The Turett Collaborative, an architectural firm that specializes in sustainable designs.

    The average U.S. electric bill is $80 to $178 per month, according to the U.S. Energy Information Administration.

    The good news is we expect to see solar hardware continue to get cheaper, thanks to advancements in technology and increased competition in the market.

    » EXPLORE: Most efficient solar panels

    Other cost factors to consider

    Some people do see their electricity bills go back up if they run into a problem with their system — like Eunice in Nevada, who didn't realize their inverter needed to be replaced, which led to an unexpected increase in their utility costs.

    “Everything had been going well and my energy bill had averaged $13 to $15 a month,” Eunice said. “Until I received a bill at the end of September 2022 in the amount of $429 from NV Energy.”

    So, keep in mind that maintenance, including panel cleaning and occasional repairs (depending on the warranties), adds to the overall cost. Most solar energy companies offer monitoring apps that help you see how much energy your system is producing and when maintenance may be required.

    » COMPARE: Solar energy pros and cons

    How can I pay for solar panels?

    Like buying a new car, you can pay the full cost of solar panels upfront, but most people don’t.

    Homeowners and business owners often use loans, solar leases or PPAs to pay for or avoid paying upfront costs. You might also consider a cash-out refinance or HELOC.


    If you can pay cash, it’s usually cheaper in the long run. For example, consider this review from David in California:

    “Financing it was $18,000,” he said. “But if I paid cash, it was $15,000 and they gave me a $1,000 debit card. It only cost me $14,000. I'm totally satisfied. I haven't paid any electric bills in six months now. I'd recommend it to anybody.”

    » MORE: What is solar panel ROI?

    Solar loan

    In general, solar loans work a lot like any other kind of loan: There’s an application and approval process, and you repay the loan amount in installments over time. Whether it makes sense for you comes down to your terms and break-even point.

    A solar customer we talked to, Christian in California, said they “did the math” and everything worked out.

    “Instead of paying $100 or $200 for the electric bill, if I use the same amount of energy or less, I will end up paying just the financing, which is $150,” they said. “But only for six years, and then after that, the panels will be mine and I don't have to pay anymore.”

    Just remember to pay attention to the interest rate. Another reviewer in California said they're “paying more for the loan payment than I save from the utility. Interest payments alone are over $1,000 per year and this will continue for a long, long time.”

    » MORE: Best solar financing companies


    With a solar lease, you don’t own the equipment. Instead, you make monthly payments to use the solar energy system for the duration of the lease term. Your leasing company is responsible for maintaining and repairing the solar panel system during this time.

    Another solar power customer, Dan in California, said he “opted for the lease approach instead of a purchase. So, we did not have to put any money upfront at all. Zero. I work in finance/accounting and generally feel that if it sounds too good to be true, it usually is. But in this case, it truly has turned out even better than we could have hoped for.”

    At the end of the term, you typically have the option to renew the lease, purchase the system at fair market value or have the leasing company remove the system from your property.

    » LEARN: How does a solar lease work?

    Power purchase agreement

    A power purchase agreement (PPA) is another way to get solar panels installed on your property without paying for them upfront.

    An energy service company (ESCO) installs the panels for you but owns and maintains them. You then purchase the electricity generated by the solar panels from the ESCO at a fixed price.

    You can still save money on your electricity bills with a PPA, but some reviewers said they've felt stuck with a company.

    » WHAT’S THE DIFFERENCE? Solar lease vs. solar PPA

    Find a Solar Energy partner near you.


      Do solar panels increase the value of your home?

      In general, installing solar panels is a good investment. Studies show that homes with solar panels sell for more than homes without them, and that increase in value can be significant.

      • A study by the Department of Energy’s Lawrence Berkeley Laboratory found homes with solar panels sold for an average of around $15,000 more than comparable homes without solar panels.
      • A National Bureau of Economic Research study found that solar panels added an average of $20,194 to the sale price of homes in the San Diego and Sacramento areas.
      • Zillow found that homes with solar panels sold for an average of 4.1% more than comparable homes without solar panels.

      How much value the solar panels add depends on your system's quality, location and other factors.

      » EXPERT TIPS: How to save energy at home

      How many solar panels do I need?

      How many solar panels you need varies based on your energy usage, the efficiency of the panels and other factors.

      The average household uses 886 kWh per month in electrical power, according to the Energy Information Administration.

      A solar panel typically produces about 1.5 kilowatt-hours (kWh) per day, so if your daily kWh usage is 30, you would need 20 solar panels to generate all of your energy needs.

      • Energy usage: To estimate the amount of energy you’ll need, you need to know your average kWh. This number should be on your utility bill as “kWh used.” To get your monthly average, look at bills for the past year, add up the stated kWh used and divide by 12.
      • Panel output: Next, you need to find the solar panel output, which is the amount of energy the panel can produce per hour of sunlight it receives.

      » WHAT’S THE DIFFERENCE? kW vs. kWh

      How does net metering work?

      Sometimes, you might make more electricity than you need, especially on sunny days.

      Net metering is a system that lets you send this extra power your panels produce back into the power grid (the big network of wires that carries electricity to everyone’s houses). In exchange, you get a credit on your electricity bill.

      This also means that if your solar panels don’t generate enough electricity (like on cloudy days), you can still use electricity from the grid without paying for it because you’ve already earned credits through net metering.

      A reviewer in Texas explains how it worked for them: “When I first signed up, my contract was a net metering, so I paid a certain cost of kilowatt-hours used, and the utility company purchased back from me at that same price. If I generated 200 and consumed 200, my net usage was zero, and my bill was essentially zero. My contract ended and I had to renew it."

      They continued: “Now, I'm paying 21 cents a kilowatt-hour for usage, and I'm only getting back 10 cents a kilowatt-hour for anything I push back to the grid. There's another $40 a month service fee from the utility company as well. So the incentive isn't quite what it was a year ago. Still, it's a good value.”

      It’s a win-win situation: You save money on your bill, and the power grid gets more renewable energy to distribute to people who need it.

      » MORE: Greenest states in the U.S.

      How are solar panels installed?

      Installing solar panels typically takes only a few days. The technicians install wiring connecting the panels to an inverter, which converts the DC power generated by the panels into AC power for use in your home.

      “One of the most common misconceptions is that going solar is a complicated process that involves a lot of work and expensive equipment,” said Alan Duncan, founder of Solar Panels Network USA. “In reality, the process of buying and installing solar panels is relatively straightforward, and many companies offer turnkey solutions that take care of everything from the design to the installation of the system.”

      Once the installation is complete, an inspector checks the system to ensure it meets local safety and building codes. The system is then connected to your utility's power grid. If you’re not grid-connected, you’ll need to get a battery to store solar energy.

      Once that’s done, your solar panel system is activated and ready to generate electricity. You can monitor the system's performance and energy production using a monitoring system provided by the installer.

      » READ: Solar panel installation guide

      Bottom line: Are solar panels worth it?

      After incentives, the general range is $10,000 to $30,000 for an average American household to invest in solar panels. This includes the cost of the panels themselves, installation and any additional equipment needed.

      Whether or not it’s worth it for you depends on how much you can save on your electricity bill. If you aren’t financially ready to install solar panels yet, you still have options to incorporate solar technology into your life with solar phone chargers and passive solar home design.

      » NEXT: 7 steps to going solar

      Article sources
      ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
      1. EnergySage, “ How much do solar panels cost in 2023? ” Accessed Aug. 15, 2023.
      2. EcoWatch, “ Solar Panel Cost In 2023 (Homeowner's Installation Savings Guide) .” Accessed Aug. 15, 2023.
      3. Center for Sustainable Energy, “ Solar Energy Adoption: Information for Homeowners and Small Businesses .” Accessed Aug. 15, 2023.
      4. Solar Energy Industries Association, “ Low-Moderate Income Solar Principles .” Accessed Aug. 15, 2023.
      5. Lawrence Berkeley National Laboratory, “ Berkeley Lab Illuminates Price Premiums for U.S. Solar Home Sales .” Accessed Aug. 15, 2023.
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