Solar Panel Cost in 2025: Pricing and Savings Breakdown

Understanding solar panel costs is a key step in deciding whether solar is the right investment for your home or business. Based on our survey of 1,000 solar customers, the national average price for a single solar panel professionally installed is $1,200. This means most full-size systems of between 20 and 30 panels cost between $24,000 and $36,000.

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In this guide, we break down everything you need to know, from the average cost of solar panels and installation to the factors that affect pricing and potential savings over time. Whether you’re just starting your research or ready to compare quotes from the best solar companies, this guide will help you make an informed, confident decision about going solar.

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Blue Raven Solar tops our list of the best solar companies thanks to its top-performing solar panels and competitive pricing. Learn more about our top picks for solar installation in the table below.

Company Star Rating BBB Rating Warranties Blue Raven SolarRead Our Review4.7/5A+25-year panels, 10-year workmanship Venture SolarRead Our Review4.8/5A+25 years Solar Energy WorldRead Our Review4.4/5A+25–30 years 4.9/5A+25-year panels, 10-year workmanship

What Is the Average Cost of Solar Panels?

On average, residential solar installations range from $24,000–$36,000 after applying federal tax credits. A 15,900 kWh system of 18–34 panels for a standard three-bedroom home costs an average of $24,222, according to our survey.

However, solar costs can vary widely depending on where you live. For instance, states like California and New York often have higher prices due to labor rates and stricter building codes, while states such as Texas and Florida tend to offer more affordable installation options. Understanding these regional differences can help you better estimate your potential investment.

Key Factors Influencing Solar Panel Installation Costs

The cost of going solar can vary widely from home to home because several key factors come into play. Understanding what affects solar panel installation costs will help you get the most accurate estimate for your property and potentially save you thousands in the process.

Type of Panel

The type of solar panel you choose significantly impacts both cost and performance. There are three main types used in residential systems:

• Monocrystalline: Monocrystalline solar panels are made from single-crystal silicon. They offer the highest efficiency rates, around 15%–22%, and the longest lifespan. Their higher cost reflects their superior performance and smaller footprint needed to generate the same amount of power. They’re great for homes with limited roof space.
• Polycrystalline: Polycrystalline solar panels are made from multiple silicon crystals. These panels provide solid performance at a more accessible price point. Their efficiency ranges from 13%–17%, making them a popular choice for homeowners seeking a balance between cost and output.
• Thin-film: Thin-film panels are lightweight and versatile but less efficient. They’re typically used in large-scale or specialty applications.

For example, a 6 kW monocrystalline system may cost around $1,000–$2,000 more than a polycrystalline system but could generate more power in a smaller footprint.

Home Size

Larger homes usually require more power, which means larger systems and higher costs. Roof space, shape, and orientation also matter.

Annual Energy Usage

Your current electricity consumption plays a big role in determining your system size. The more energy you use, the larger and more expensive your solar setup will need to be.

• Low usage (<8,000 kWh/year): May need a 5–6 kW system
• Average usage (8,000–12,000 kWh/year): Often requires a 7–10 kW system
• High usage (>12,000 kWh/year): May require a 10–12 kW+ system

Review your utility bills from the past 12 months to determine your average kWh usage.

Equipment Selection

While solar panels are the star of the show, the supporting equipment, like inverters, racking systems, and monitoring technology, plays a major role in your system’s performance, longevity, and overall cost. Choosing the right components can increase energy output, reduce maintenance needs, and improve your long-term savings.

Inverters convert solar energy into usable electricity. You’ll typically choose from these types:

• String inverters: These are the most affordable, but system-wide performance can drop if one panel is shaded.
• Microinverters: These are installed on each panel and are ideal for roofs with shade or complex layouts, but they’re more expensive.
• Power optimizers: Optimizers work with string inverters to improve individual panel performance and are mid-range in cost.

Other important components include the following:

• Mounting systems: Standard roof mounts are cost-effective, but custom or ground mounts add hundreds of dollars.
• Monitoring tech: Basic systems track overall performance, but advanced options offer real-time, panel-level data.
• Premium equipment: This comes with higher upfront costs but longer warranties (10–25 years), better efficiency, and durability.

Installation Requirements

Every roof is unique, and that can have a big impact on the overall cost of your solar panel installation. More complex roof types often require additional labor, specialized hardware, or structural adjustments, all of which can drive up costs. For example, tile or metal roofs may need extra mounting equipment to install the panels safely and securely.

The pitch and layout of your roof also play a role. Steep slopes or multi-level designs can make installations more time-consuming and labor-intensive. In some cases, especially with older homes, structural reinforcements or electrical upgrades may be necessary to ensure the roof can support the system safely.

Location and Local Incentives

Your location plays a big role in determining how much you’ll pay when going solar. In general, urban areas tend to have higher labor and permitting costs due to stricter building codes, higher wages, and more complex utility interconnection processes. In contrast, rural areas may offer lower installation costs, but they can sometimes lack access to experienced installers or streamlined permitting, which could delay the process.

In addition to cost differences, where you live also affects the availability and value of solar incentives. States like California, New York, and Massachusetts offer strong incentives but also come with higher overall installation costs. Meanwhile, Texas, Florida, and Arizona tend to have lower costs and growing solar markets, though incentives may vary.

Homeowners should also look into local programs such as state tax credits, utility rebates, net metering policies, and Solar Renewable Energy Certificates (SRECs), which can significantly boost savings. To learn what’s available in your area, check out the DSIRE database, a free, comprehensive resource for solar incentives by state.

Solar Batteries

A single solar battery typically costs, on average, $5,097, depending on capacity, type, and brand.* For whole-house backup systems with more than 25 kWh capacity, costs can exceed $25,000, not including installation.

The price varies significantly based on storage capacity and brand. Popular options like the Tesla Powerwall cost around $11,500 with installation, while premium systems like the Enphase IQ Battery can cost upward of $11,000 before installation costs.

While batteries add substantially to your initial investment, they can provide valuable backup power during outages and help maximize your solar system’s efficiency by storing excess energy for use during peak rate periods or nighttime hours.

*Based on our survey of 1,000 home solar customers, which included 279 solar battery customers. 

Additional Cost Considerations

In addition to the major cost drivers of a solar installation, several smaller expenses can still affect your overall budget. These may not be deal-breakers, but it’s important to account for them early in the planning process.

• Advanced monitoring systems: Upgrading from basic monitoring to advanced, panel-level monitoring will add to your upfront costs, but it allows you to track performance, detect issues early, and optimize energy production.
• HOA requirements: If you live in a community with a homeowners association, you may need to meet specific aesthetic or placement guidelines. This could require custom panel layouts or additional screening, which would add to your project costs.
• Home insurance adjustments: Adding solar panels may slightly increase your insurance premium, depending on your provider and system size. However, most policies cover solar panels as part of the home’s structure.
• Permit and inspection fees: Local governments charge permitting and inspection fees that vary widely by location. These can range from $100 in smaller towns to over $1,000 in larger cities with more complex regulations.
• Tree removal or trimming: Shading can significantly reduce solar efficiency. If trees block sunlight from reaching your roof, professional removal or trimming services can add to your total costs, depending on the size and number of trees.

How Much Do Solar Panels Cost by State?

Solar panel costs can vary dramatically by state due to several key factors: local labor and permitting costs, state-specific incentives and regulations, and varying levels of market competition among installers. These differences lead to price swings, with northeastern states like Massachusetts and New York typically seeing higher installation costs and southern states like Texas and Florida seeing lower rates.

Financing Options for Solar Panels

Solar panels are a long-term investment, and the good news is you don’t have to pay for everything upfront. There are several flexible financing options available to help homeowners make the switch to solar without breaking the bank. Choosing the right solar financing method can significantly impact your overall savings and return on investment.

• Cash purchase: Paying upfront in full gives you complete ownership of the system and the highest long-term savings. You’ll qualify for all tax credits and incentives, and you won’t pay interest or monthly fees. However, it requires a significant upfront investment.
• Solar loans: A solar loan lets you spread the cost over time while still owning the system and benefiting from tax incentives. Monthly payments are usually fixed, and many loans require little to no money down. Keep in mind that interest charges may reduce your overall savings.
• Solar leases: With a solar lease, you rent the solar system for a set monthly fee, usually with little or no upfront cost. The installer owns and maintains the system, and you benefit from lower utility bills. However, you won’t own the system or qualify for tax credits, and long-term savings are typically lower.
• Power purchase agreements (PPAs): PPAs allow you to pay only for the electricity the system generates, often at a rate cheaper than your local utility. Like leases, there’s little to no upfront cost and no maintenance responsibility, but you don’t own the system, and contracts can last 20 years or more.

Return on Investment and Payback Period

One of the most common questions homeowners have is: When will my solar panels pay for themselves? While the exact timeline varies based on factors like system cost, energy usage, local utility rates, and available incentives, most homeowners see a payback period of 6–10 years. Over a 25-year system lifespan, that can translate to total savings of $15,000–$40,000 or more, especially in areas with high electricity costs and strong local incentives.

Several factors can accelerate your solar payback period, including high local utility rates, south-facing roofs with minimal shading, and low- or no-interest financing options. For example, a California homeowner who installs a $20,000 solar system and takes advantage of the 30% federal tax credit would reduce their net cost to $14,000. With average annual savings of around $1,800 on electricity, that system would pay for itself in less than eight years and continue generating free power for many more.

How Can I Save Money on Solar Panels?

Going solar is a smart financial move, but it’s even smarter when you know how to maximize your savings. From federal tax credits to local rebates and smart shopping strategies, there are several ways homeowners can cut costs and get the best return on their solar investment.

Solar Incentives and Rebates

One of the most effective ways to reduce your upfront cost is by taking advantage of solar incentives at the federal, state, and local levels.

• Federal solar tax credit (ITC): This is the most valuable incentive available. It allows you to deduct 30% of your total solar installation cost from your federal income taxes. For example, if your system costs $18,000, you could claim a $5,400 credit, bringing your net cost down to $12,600.
• State and local incentives: Many states and municipalities offer additional rebates, property tax exemptions, or solar renewable energy credits (SRECs). For example, New York offers up to $5,000 in state tax credits, and some cities in California provide additional cash-back rebates.
• Net metering: This billing arrangement allows you to earn credits for excess electricity your system sends back to the grid. Those credits can offset your electricity use at night or during cloudy days, lowering your monthly utility bill.

Additional Ways To Save

Beyond incentives, there are smart strategies that can help you save even more on your solar panel installation.

• Bundle with other upgrades: Some homeowners save money by combining solar with other home improvements like a new roof or energy-efficient upgrades, which may qualify for additional rebates.
• Choose the right system size: Bigger isn’t always better. An oversized system can lead to unnecessary costs. A professional installer can help you match system size to your actual energy needs.
• Compare multiple quotes: Always get at least three estimates from reputable installers. Prices can vary by thousands of dollars for the same system size, depending on the company and equipment used.
• Use solar loans wisely: If you’re financing, look for solar-specific loans with low interest rates and no prepayment penalties. The lower the interest, the more you save over time.
• Time your purchase: Solar installation costs tend to fluctuate throughout the year. Off-season months (like winter in many regions) can sometimes come with discounts or promotional offers.

Are Solar Panels Worth It?

For most homeowners, solar panels are worth it. Thanks to the 30% federal tax credit, state and local incentives, and rising electricity rates (currently averaging 15.95 cents per kWh nationwide), solar systems can save you around  $42,376 over 25 years.*

If you live in a high-cost electricity state like California, where rates can top 30 cents per kWh, the financial benefits grow even stronger, especially if your household uses more than 900 kWh per month or enjoys consistent sun exposure.

But solar offers more than just savings. It provides real, lasting value in several key ways:

• Energy independence: By producing your own electricity, you’re less affected by utility rate hikes and peak pricing. This is especially useful during energy shortages or high-demand seasons.
• Environmental benefits: A typical residential solar system reduces carbon emissions by 3–4 tons per year, which is like planting 100 trees annually. That’s a meaningful contribution to cleaner air and a healthier planet.
• Increased home value: Studies show homes with solar panels typically sell for 4% to 6% more, adding around $15,000 in value for the average U.S. home. Unlike other upgrades, solar tends to retain its value well over time.
• Reliable performance: Most panels come with 25-year warranties and still produce 85% or more of their original power output after two decades, giving you consistent returns year after year.

That said, solar isn’t right for everyone. It may not be the best fit if your roof is heavily shaded or needs replacement soon or if you plan to move within five years. Also, homes in areas with very low electricity rates or with minimal energy usage may see slower payback periods.

Still, for the vast majority of homeowners, the financial and environmental payoff makes solar well worth the cost and a solid investment in your home’s future.

*Cost data is based on reports from the U.S. Energy Information Administration and uses the consumption of 10,632 kWh per year to calculate the savings.

Survey Insights from Solar Customers

In , we surveyed 1,000 home solar customers across the U.S. to understand their experience shopping for and installing solar panel systems. Most homeowners said they paid around $16,129 for a solar panel system, with an average of 14 solar panels installed.

While Sunrun was the most popular provider in our survey, many respondents reported choosing a local or regional installer rather than a large, national company. Additionally, 53% of respondents claimed they wanted solar panels to reduce power bills, and most reported an average decrease of $14 per panel, translating to $196 saved on monthly utility costs.

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What Are the Hidden Costs and Downsides of Going Solar?

While solar panels offer great long-term savings and environmental benefits, it’s important to understand the less visible costs and considerations that can affect your overall investment. These aren’t deal-breakers for most homeowners, but knowing about them upfront helps you plan more effectively and avoid surprises down the road.

Here are some common hidden costs and potential drawbacks to keep in mind:

• Insurance adjustments: Adding solar may increase your homeowners insurance premiums slightly, depending on your provider. Some insurers might also require you to add a rider to cover the solar equipment fully.
• Maintenance needs: Solar panels are low-maintenance, but occasional professional cleaning and inspections, usually once or twice a year, can help maintain peak efficiency. Skipping this care may lead to gradual performance loss over time.
• Permits and HOA requirements: Beyond standard permit fees, HOAs or local code requirements may call for additional costs, like custom mounting, visual screening, or system changes to meet aesthetic or structural guidelines.
• Roof repairs: If you need to repair or replace your roof after the panels are installed, the panels must be removed and reinstalled, adding anywhere from $1,000 to $3,000+ to your roofing project. That’s why many installers recommend addressing any roofing issues before going solar.

Expert Insights

“If your home is located in an area with low solar access or if your home is shadowed by trees or buildings for much of the day, you probably won’t make back the investment on the electricity you generate. If you already consume low amounts of electricity (or if you consume a high amount), switching to solar might offer smaller savings, and so require a longer payback period.” —Mark McShane.

McShane is a solar industry professional and entrepreneur. He owns Skills Training Group, a company focused on producing high-quality solar technicians. He also runs Solar Panel Quote Online, a site that provides impartial advice and information to homeowners and businesses considering installing solar.

We consulted additional experts for insight into the benefits of solar energy, the affordability of solar panels, and advancements in solar technology. See their insights below.

For many, the appeal of installing a rooftop solar panel system is reducing energy bills and saving money.

However, upfront installation costs, incentives, tax credits and other considerations can make the decision to go solar feel pretty complicated. The math that shows how much money solar panels can save you takes some time to uncover.

Gilbert Michaud, a professor of environmental policy at Loyola University Chicago, said it's worth looking into available options for solar right now. "It makes a lot of sense financially because costs have gone down so much and the incentives are really strong," Michaud said.

Can solar panels save you money?

Interested in understanding the impact solar can have on your home? Enter some basic information below, and we’ll instantly provide a free estimate of your energy savings.

Residential solar is very much a custom-fit product, however. To determine how much you can save, it's important to be sure you consider all the factors influencing your unique situation. 

Long-term solar savings

For most people, installing solar is an investment in the medium- to long-term future. A payback period is the amount of time it takes to earn back your initial investment through monthly energy savings. How much you save per month depends on the size of your solar system, your home's energy consumption and other factors. Typically, excess solar energy produced by a residential system is credited against the amount used, but it's rare to actually receive cash payments for solar power.

Still, paying little or nothing to your local utility adds up to lots of savings over years or decades. "Most systems pay themselves off in about 10 years. Then you have decades of free electricity after that," Michaud explained. He notes that some younger homeowners who move around more frequently might shy away from solar due to the perceived long commitment.

However, he points out that the investment can often be recouped from the increase in home value that comes with a new installation. The payback period will be unique to your circumstances because of the difference in both upfront solar costs and energy costs based on your location. But here are some guidelines to help you estimate when you'll break even.

How to estimate your solar savings

There's a simple basic formula to determine how long it'll take for your solar savings to pay off the cost of installing the system. Start with the upfront cost of installation, then subtract all tax credits, rebates, grants and other incentives you received. This determines your net system cost. Next, estimate how much you'll save on your annual electricity bills with the system.

Divide the net system cost by the annual bill savings and this gives you your solar payback period in years.

Here it's broken down in a bit more detail:

Find out your upfront costs

With a purchase as big as rooftop solar panels, you should get multiple quotes, make sure your solar installer answers all your questions, and find the offer that best fits your needs.

Subtract tax credits (and other incentives)

While tax credits and incentives vary state to state and utility to utility, the 30% federal solar tax credit applies to everyone. Find out how much you can expect your solar costs to be reduced, and subtract.

Check your monthly electric bill savings

You could assume you'll get all your power from solar, but while some homes will be able to zero out their electric bill, others will still have to pay for some electricity usage or standard fees. Some utilities charge fees just for staying connected to the grid. Savings will vary widely from home to home, depending on how many solar panels are installed, normal energy consumption and more.

Look at your electric bill — at least six months worth to account for seasonal temperature changes and other fluctuations in cost — and estimate your monthly savings from solar. If you cover 100% of your bill with solar energy and net metering and you currently pay an average of $125 per month in electricity bills, you could save $1,500 per year ($125 x 12 months).

Calculate your payback period

Once you've figured out your yearly savings, you can calculate your payback period by dividing the net cost of your system by your yearly savings. A system that costs $15,000 and saves you $1,500 each year, will pay for itself in 10 years.

Here's the equation written out:

(Solar installation costs − tax credits and other incentives) / (Annual savings) = Payback period in years

Calculate your solar savings

After your payback period, during which time you're really just recouping your expenses, everything else is savings. Residential solar panels are warrantied for 25 years typically, but their useful life can be much longer. Fifteen years of savings at $1,500 each year is a whopping $22,500.

These calculations are a bit too neat for the real world. Even the most efficient solar panels become less productive over their lifespan, so you may not get quite as much energy from them in year 25 as in year one (a typical guarantee is between 85% and 92% of its original production).

On the other hand, electricity rates have historically increased fairly steadily. (They've gone up about 2.5% from December to December , according to the Bureau of Labor Statistics.) This means, in later years, you could be saving even more than you would with solar today.

Average solar panel installation costs

Like many things, the price of having solar panels installed on your residence has been affected in recent years by inflation and supply chain constraints. According to a report from Wood Mackenzie (PDF), residential solar cost $3.28 per watt to install in the first quarter of , up from $3.07 during the same period in . (Though the report suggests that the price may have started falling again.)

According to SaveOnEnergy, the average cost of a residential solar system as of June was $31,558 before incentives and rebates, based on a typical solar system size of 8.6 kilowatts. The cost estimate is based on a data set from the Lawrence Berkeley National Laboratory that puts the average solar panel system cost at $3.67 per watt.

Here's a look at the average cost of a solar panel system for most states, according to FindEnergy.com.

The cost of individual solar installations can vary, however. (Even large scale estimates can vary from source to source, as you see above.) Homeowners can opt for systems of different sizes, with more complexity and extra components, like solar batteries and EV chargers, that bump up the overall cost. Other considerations, like local market conditions and the difficulty of installing solar panels on a certain roof or property, can also affect the final price. And prices can vary from one solar company to the next.

Tax breaks and incentives

Right now, thanks to the Inflation Reduction Act, the US government will credit taxpayers 30% of the cost of an installed solar system the following year. There are also myriad other incentives and tax breaks offered by states, local governments and individual utilities to further bring down the overall amount paid out of pocket.

Beyond such reductions in the upfront cost of installation, using your solar panels over the years can also shrink your energy bill and help pay back your investment through net metering. This is the most popular way utilities compensate homeowners who allow the energy their solar system produces to be fed onto the grid for other consumers to use.

Factors that influence savings

In recent years, net metering policies have begun to shift in some jurisdictions, like the high-profile case in California, and this has sometimes meant a reduction in the overall potential savings from solar. For example, some utilities are moving toward more-complex formulas that govern how much homeowners are paid for releasing energy onto the grid.

It's important to do your homework to understand your local utility's net metering policies and any potential changes being considered. You should also get to know any time of use rates that are in place that may influence how much the utility charges for energy consumption and pays for energy production during peak and off-peak hours.

In some cases, solar panels paired with a solar battery can save you more with time of use rates than solar panels alone. Adding an electric vehicle charger is an extra expense, like a battery, but it could increase your savings over time.

The climate and the amount of peak sun hours your location receives can also be a key factor in how much you'll save over time. A state like New Mexico with up to six peak sun hours per day will obviously allow you to generate more electricity, and possibly save more, than more northern states that receive 25% to 50% less peak sun.

Since solar panels can last 25 years, you need a sturdy roof. If your roof isn't in top shape, you might have to replace it before installing solar panels. Though you'll eventually need to replace your roof whether you put solar panels on it or not, having to do so early is an extra expense that might eat into your savings.

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