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How Much Do Solar Panels Cost?

Shelly Skandrani Updated: March 21, 2024 • 14 min read
couple with solar panels

Key Points:

  • Solar panel average costs range from $15K to $25K after incentives, with the potential for significant long-term savings on electricity bills.

  • Federal and state incentives can substantially lower the initial investment, making solar energy more accessible.

  • A solar energy system tailored to your energy needs, can pay for itself over time, enhancing property value and reducing carbon footprint.

Solar panels are the heartbeats of a solar energy system, converting sunlight into electricity and embodying the essence of green technology. This clean, renewable energy source is a game-changer in our quest for sustainability. Solar panels reduce reliance on fossil fuels, cut down on greenhouse gas emissions, and offer a path towards reducing our carbon footprint. 

But, solar power systems can be expensive. So, are they a viable option for your home or business? 

As technology advances and the push for a greener planet grows stronger, solar panels continue to evolve, becoming more efficient and affordable.

Let's dive into how much solar panels really cost, explore the incentives that make them more affordable, and discover how they can be a cornerstone of your sustainable living efforts. Ready to glow green?

The Estimated Cost of Solar Panels

When considering making the leap to solar energy, one of the first questions that pop up is: "How much do solar panels cost?" This varies widely depending on a few key factors. Let’s break it down into simple terms.

The Average Cost

The average cost of solar panels for a residential setup in the US hovers around $15K to $25K after federal tax incentives. This price includes the whole shebang – the panels, the inverter, installation costs, and any additional equipment needed. This is a ballpark figure. Your actual costs depend on your home's energy needs, location, and the type of panels you choose.

The Low-End Cost

For those on a tighter budget or with modest energy needs, the low-end cost of installing solar panels can be as low as $5K to $10K. These systems might be smaller or utilize less expensive solar panels by type, but they can still significantly reduce your electricity bills and carbon footprint.

The High-End Cost

On the flip side, installing solar panels at the highest level can exceed $30K. These premium systems often include top-of-the-line solar panels by type, larger solar power system size, and custom installations that may be necessary for homes with unique architectural features or higher energy demands.

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Determining Your Solar Installation Costs

To determine solar installation costs accurately, you must consider your home's specific needs. The solar system size that's right for you will depend on how much energy you use, the efficiency of the panels you choose, and how much of your energy consumption you want to cover with solar power.

Investing in solar panels is about more than just the upfront costs. You need to weigh up the cost of maintenance against the long-term savings and benefits. 

Despite the initial investment, solar energy can significantly reduce your monthly electricity bills, sometimes to the point of zeroing them out. Plus, with minimal ongoing and maintenance costs, your solar panels' investment can start paying for itself in just several years.

Factors That Determine Solar Installation Costs

While the size of the system is a primary factor in determining cost, other elements can also play a significant role, including:

  • Solar system size and capacity: The size, measured in kilowatts (kW), is one of the primary determinants. Larger systems with higher energy output cost more due to the increased number of solar panels and additional equipment required.
  • Type of solar panels: Monocrystalline panels, known for their efficiency and longevity, tend to be more expensive than polycrystalline, thin-film, and PERC panels.
  • Government incentives and rebates: Federal, state, and local incentives can significantly reduce the net cost of solar panel installation. These incentives can include tax credits, rebates, and solar renewable energy certificates (SRECs).
  • Permitting and inspection fees: Fees can vary depending on your location. These necessary steps ensure your solar system complies with local regulations and safety standards.
  • Quality and brand of equipment: High-quality equipment from reputable brands often costs more but can offer better efficiency, durability, and warranties.
  • Installation complexity: The difficulty of installing your solar panels, influenced by roof type and condition, angle, and accessibility, can impact labor costs.
  • Labor costs: Vary by region and are influenced by the experience and reputation of the installation company. It’s important to balance cost with the quality of installation.
  • Location and sunlight availability: Sunlight exposure can influence the final price. Higher sunlight availability can often utilize smaller, less expensive systems to achieve the same energy output as larger systems in less sunny locations.
  • Additional features or services: Solar battery storage or services such as tree trimming to maximize sun exposure can increase the overall cost of your solar energy system.
  • Ongoing maintenance costs: While solar panels require minimal maintenance, potential costs for repairs or parts should be considered when calculating the total investment.
  • Energy efficiency: Homes with energy-efficient appliances, LED lighting, and good insulation will have lower energy needs.
  • Household habits: The number of people living in the home and daily energy usage patterns can significantly impact energy requirements.

Ready to Install Solar Panels?

Do your homework. Get multiple quotes, read reviews, and don't be afraid to ask many questions. The right solar provider will help you understand your options, determine solar installation costs, and maximize your investment.

solar panel installing

You’re investing in a sustainable future. With the right approach, the cost of solar panels can be a wise investment into a greener, more sustainable lifestyle that pays dividends for years to come.

Average Cost of Solar System by Panel Size

In terms of cost, installing solar panels is highly dependent on the size, measured in kilowatts (kW). The size you need depends on your energy usage, the efficiency of the chosen solar panels, and how much of your electricity bill you wish to offset. 

Solar System Size (kW) Average Cost Range (USD) Estimated Energy Output (kWh/year)
3 kW $9K - $12K 3,600 - 4,800
5 kW $15K - $20K 6000 - 8000
7 kW $21K - $28K 8,400 - 11,200
10 kW $30K - $40K 12,000 - 16,000
  • 3 kW solar systems: Ideal for small households or those with low electricity needs. The initial investment is more manageable, making it a good entry point into solar energy.
  • 5 kW solar systems: This size is among the most popular for average-sized homes, offering a balance between cost and output sufficient for typical energy needs.
  • 7 kW solar systems: Suitable for larger homes with higher energy consumption. This size can significantly reduce or even eliminate electricity bills.
  • 10 kW solar systems: Best for homes with very high energy demands or those looking to maximize their energy independence. While the upfront cost is higher, the long-term savings and potential to sell back excess power to the grid can be substantial.

Average Cost of Solar System by Panel Type

Choosing the right type of solar panel is a crucial step in maximizing your investment. It helps ensure you get the most efficient and cost-effective system for your home. When making your decision, take the initial investment into account, as well as the efficiency and lifespan of the panels. If you have a well-designed home, you’ll also want to consider how the panels will look on your roof.

The costs below include the panels, installation, and any necessary equipment or modifications to your home's electrical system. Remember that these prices can vary based on location, installation complexity, and current market conditions.

Type kW Range Average Costs
Monocrystalline 3-10 kW $15K - $25K
Polycrystalline 3-10 kW $12K - $20K
Thin-film 3-10 kW $10K - $17K
PERC 3-10 kW $17K - $27K


  • kW Range: Usually ranges from 3 kW to 10 kW for residential systems.
  • Average Costs: These are considered premium solar panels, ranging from $15K to $25K for a complete installation. They offer high efficiency and longevity, making them a popular choice despite the higher price tag.


  • kW Range: Similar to monocrystalline, suitable for systems from 3 kW to 10 kW.
  • Average Costs: A bit more affordable than their monocrystalline counterparts, polycrystalline panels cost between $12K and $20K. They have a slightly lower efficiency but are a great middle-ground option for those looking to balance cost and performance.


  • kW Range: Also suitable for systems ranging from 3 kW to 10 kW.
  • Average Costs: Thin-film panels are the most affordable, with average installation costs between $10K and $17K. They offer flexibility and a lower profile but usually have lower efficiency rates and a shorter lifespan than crystalline panels.

PERC (Passivated Emitter and Rear Cell)

  • kW Range: Generally available for systems from 3 kW to 10 kW.
  • Average Costs: As a newer technology that enhances the efficiency of monocrystalline or polycrystalline panels, PERC panels come with a price range of $17K to $27K. The right choice for those seeking the highest efficiency from their solar system.

Average Cost of Solar System by Home Size

The cost of solar panels is not directly determined by the size of a home but rather by the household's energy needs, which often correlate with home size. 

Here’s a general guide based on the average size of a home and its typical energy requirements:

Home Size (Square Feet) Estimated Solar System Size (kW) Average Cost Range (USD)
1000 - 1,500 3 - 4 kW $9K - $16K
1,500 - 2000 4 - 5 kW $12K - $20K
2000 - 2,500 5 - 6 kW $15K - $24K
2,500 - 3000 6 - 7 kW $18K - $28K
3000+ 7+ kW $21K and up

Smaller homes, with around 1000 - 1,500 square feet, usually have lower energy requirements, whereas very large homes or those with high energy usage might need systems of 7 kW or more. Costs will usually increase according to size to ensure energy demands are met.

Maximizing Your Solar System Investment

Here are some tips to ensure you're making the most of your investment:

  • Research financial incentives: Federal, state, and local incentives can significantly reduce the net cost of your solar system. Be sure to explore all available options.
  • Evaluate your energy needs: Review your electricity bills to determine your average energy usage and consider future changes that might affect your consumption.
  • Conduct an energy audit: Before deciding on solar panel installation, identify ways to reduce energy consumption and lower the size of the solar system needed.
  • Seek multiple quotes: Prices can vary between providers, so getting several quotes to compare costs and services is beneficial.
  • Customize your system: Work with a reputable solar installer who can design a system tailored to your home's specific energy needs and roof layout, ensuring you get the best value for your investment.

Understanding the relationship between your home size, energy needs, and the cost of solar panels can help you make informed decisions. This system can last over 25 years, so ensure you get a setup that fits your needs and budget.

Solar Panel Installation Timeline

If you’re embarking on the journey to solar energy, you’ll need to factor in the installation timeline. Overall, from the decision to install solar panels to having a fully operational system, the process can take anywhere from 1 to 6 months. The timeline depends on several factors:

  • The complexity of your system
  • Local permitting requirements
  • The type of financing you choose 
  • The efficiency of your installation company


General Installation Timeline You Can Expect

Initial Consultation and Design:

1-2 weeks

The initial consultation, site visit, and system design. This stage involves assessing your home's solar potential, discussing your energy needs, and creating a customized solar energy system design.

Permits and Approvals: 

2-8 weeks

Obtaining the necessary permits and approvals from local government and utilities. Depends on local regulations and the efficiency of the permitting process in your area. Your installer will usually handle this.

Financing and contracts:

1-6 weeks

Funding and contracts: Securing financing if necessary and signing contracts with your solar installer.


1-5 days

The physical installation of your solar panel system. Depends on the size and complexity of your system, as well as weather conditions.

Inspection and Connection: 

1-4 weeks

After installation, your system must be inspected by local authorities and then connected to the grid by your utility company.

Choosing a reputable solar installer who can navigate the permitting process efficiently and perform a high-quality installation is crucial for a smooth transition to solar energy. With the proper preparation, installing solar panels can be a straightforward and rewarding investment in your home's energy future.

Additional Solar Panel Costs to Consider

When investing in solar energy, you should consider the entire financial picture, including ongoing costs and maintenance. While solar panels are known for their durability and low maintenance requirements, there are still some additional costs to be aware of. 

solar panel neighborhood

Monitoring System Fees

  • Many solar energy systems have monitoring software that allows you to track your system's performance. Some companies charge a monthly or annual fee for this service. It can enhance your understanding of energy production and consumption but adds to the overall cost.


  • Adding your solar panel system to your home insurance policy might increase your premium slightly. It's important to ensure your system is covered for damage due to environmental factors or other unforeseen circumstances.

Utility Grid Connection Fees

  • Even with solar panels, most homes remain connected to the utility grid to ensure electricity is available when solar production is insufficient. Some utilities charge a monthly connection fee for grid-tied solar systems, which can vary by location.

Maintenance Costs

  • Cleaning: Solar panels require little maintenance, but periodic cleaning may be necessary to remove dirt, leaves, or snow that could obstruct sunlight and reduce efficiency. You can hire a professional cleaning service or do it yourself, considering safety and proper equipment.
  • Repairs: While rare, repairs may be needed if panels are damaged by severe weather or other external factors. The cost of repairs can vary depending on the extent of the damage and the warranty coverage.
  • Inverter replacement: The inverter converts solar energy into electricity usable by the home and typically needs to be replaced at least once during the solar panel system's lifespan. Inverter lifespans are usually around 10 to 15 years, and replacement costs can range from $1K to $2K.
  • Warranty and service agreements: Many solar panel manufacturers offer warranties that cover panel performance and durability for up to 25 years. However, extended warranties or service agreements for other system components may be available for an additional cost.
  • System upgrades: Over time, you may upgrade your solar system with additional panels or newer technology to increase efficiency or capacity. These upgrades would be an additional cost beyond the original installation.

By considering the ongoing costs and maintenance requirements, you can create a more accurate budget for your solar energy investment. Despite these additional costs, the long-term savings on energy bills and the potential increase in property value often make solar panels a wise financial decision. 

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Financing Options for Solar Panels

Investing in solar panels is a substantial financial decision, but various financing options can make solar energy accessible to the masses. Understanding these options can help you balance upfront costs with long-term savings and benefits. 

Here's a look at the most common ways to finance solar panel installations:

Government Programs and Incentives

  • Various federal, state, and local programs offer incentives, rebates, and grants to reduce the cost of solar installations. These programs can significantly lower the financial barrier to solar energy, making it a more attractive investment.

Cash Purchase

  • Pros: Paying in cash for your solar system offers the highest long-term savings and the shortest payback period. Without loan interest, the total cost is lower, and you can take full advantage of all available tax credits and rebates.
  • Cons: Requires a significant upfront investment, which may only be feasible for some.

Personal Loans for Home Improvement

  • Pros: Finance the entire cost of your solar panel system, spreading the cost over several years. Many home improvement loans have favorable terms, such as low interest rates and no down payment, making solar energy accessible without a significant upfront cost.
  • Cons: Interest on the loan adds to the system's total cost over time, extending the payback period compared to a cash purchase.

Solar Leases

  • Pros: With a solar lease, you can install solar panels with little to no upfront cost. You pay a fixed monthly fee to lease the equipment, usually lower than your current electricity bill, allowing immediate savings.
  • Cons: Since you don't own the system, you can't take advantage of tax credits, rebates, or increased home value. The leasing company benefits from these incentives instead.

Power Purchase Agreements (PPAs)

  • Pros: Similar to leases, PPAs allow the installation of solar panels without upfront costs. Instead of paying for the equipment, you agree to purchase the power generated by the system at a set rate, usually lower than the utility rate.
  • Cons: Like leases, PPAs don't let you benefit from tax credits or rebates, and you won't own the system. The rate you pay for the solar-generated electricity may increase over time and will be specified in the agreement.

Home Equity Loans or Lines of Credit

  • Pros: Using home equity to finance solar panels can offer low interest rates and potential tax deductions on the interest. This option can cover the entire solar system cost, allowing immediate ownership and incentive eligibility.
  • Cons: Your home serves as collateral, meaning there's a risk of foreclosure if you fail to make payments. Additionally, it may extend the payback period due to interest costs.

Is the Financial Investment of Solar Panels Worth it? 

You may wonder whether solar panels are worth the financial investment. Let’s consider the savings solar panels can provide over time and how these savings can offset initial costs.

How Much Do Solar Panels Save?

  • Reduction in monthly electricity bills: A significant reduction or complete elimination of monthly electricity bills, depending on the size of the solar system and your home's energy consumption. On average, you can save between $10K and $30K over the lifetime of their solar panel system.
  • Net metering benefits: In areas where net metering is available, you can earn credits for the excess electricity your solar system produces and feeds back into the grid. Credits you can use when solar production is low.
  • Increased home value: Homes equipped with solar panel systems often increase property value by about 4% to 6%. Many buyers will pay more to reduce their electric bills and carbon footprint.
  • Protection against rising energy costs: Solar panels can hedge against rising electricity prices. By generating your own electricity, you obtain long-term financial savings and stability.

Calculating the Return on Investment (ROI)

To determine whether solar panels are worth the investment for your specific situation, consider the following:

  • Initial installation costs vs. long-term savings: Compare the upfront cost of installing your solar panel system (after incentives and rebates) with the estimated savings on electricity bills over the system's lifespan.
  • Payback period: Calculate the payback period, which is the time it takes for the savings from your solar panels to cover the initial investment. The average payback period is 5 to 8 years, which can vary based on local incentives, energy usage, and system size.
  • Longevity and durability: Most solar panel systems are designed to last 25 to 30 years with minimal maintenance costs. The long lifespan further contributes to the overall financial benefits of solar energy.

Calculating the Break-Even Point for Solar Panels

The break-even point, or payback period, is when the cumulative savings from reduced electricity bills equal the initial investment in the solar panel system. Understanding this timeframe helps assess the financial viability of solar energy for your home.

While the payback period can vary widely based on the factors we’ve discussed, the average timeframe to break even ranges from 5 to 8 years. 

In areas with high electricity rates and generous incentives, breaking even as quickly as 3 to 4 years is possible. On the other hand, in regions with lower utility costs and fewer incentives, the break-even point could extend beyond 10 years.

To calculate your specific payback period, follow these steps:

  • Determine total installation costs: Include all expenses for your solar system installation after deducting incentives and rebates.
  • Calculate annual savings: Estimate how much you will save annually on electricity bills with your solar system.
  • Divide installation costs by annual savings: This calculation will give you an approximate number of years it will take to break even.

Solar Payback Period (years) = Net Installation Costs / Annual Savings

Example Calculation

If your solar panels cost you $14K and reduce your electricity bills by $1,750 annually, your calculation could be:

Solar Payback Period = $14K / $1,750 per year = 8 years

The Bottom Line

Navigating the costs of solar panels involves considering many factors, including installation expenses, potential savings, and the value of embracing a sustainable energy source. 

Sure, there's a bit of a cost upfront, but thanks to some help from incentives and the sun's never-ending generosity, solar panels can be a financially wise choice for many homeowners. 

By doing thorough research and seeking multiple quotes, you can find a solar installation that fits your energy needs and aligns with your financial goals. Installing a solar system today can pave the way for a greener future and significant savings over time. 

So, here's to sunny days ahead and a little high-five to the planet.



How much is a solar system for a 2000 sq ft house?

The cost can vary widely based on energy usage and location, but on average, a solar system for a 2000 sq ft house might range from $15K to $20K after incentives.

Are solar panels actually worth it?

Yes, solar panels are worth it for many homeowners. They can significantly reduce electricity bills, increase property value, and offer environmental benefits. The financial return depends on location, energy usage, and available incentives.

How many solar panels do I need for a 3000 sq ft home?

The number of panels depends on energy consumption, sunlight availability, and panel efficiency. On average, a 3000 sq ft home might need 20 to 25 solar panels to cover its energy needs.

How long do solar panels last?

Solar panels are durable and typically last 25 to 30 years. Many come with warranties to guarantee their performance over a significant portion of that time.

How long do solar panels take to pay for themselves?

The payback period for solar panels varies but generally ranges from 5 to 8 years, depending on factors like installation costs, energy savings, and incentives.