Solar panel cost: Market update winter 2021/2022
Updated: January 14, 2021Today, the cost of a 5.76kW system in the United States will range between $10,068 to $12,305, after claiming the 26% federal solar tax credit. The current average solar panel cost is $2.49 per watt of solar installed. That's almost 80% lower than the cost of solar 10 years ago!
Is the cost of solar panels still falling?
Solar prices fell significantly from 2008 to 2018, but from the start of 2019 to the summer of 2020, solar prices only fell by about 3%. We here at SolarReviews thought: That's it, solar prices have bottomed out.
But, we spoke too soon. The coronavirus pandemic forced installers to drop their solar prices to stay afloat. Plus, Tesla Energy released a limited range of installed residential systems at a price of $2.00 per watt of solar, which further pressured solar installers to drive down their price to compete. The combination of these two factors caused solar panel costs to drop by almost 4% in the last two quarters of 2020.
This means the cost to install solar panels is lower than it has ever been, which is great news for homeowners who haven’t made the switch to solar yet. However, we do believe solar panel prices will be relatively flat across 2021.
Solar panel cost calculator
On this page:
- Is solar panel cost still falling?
- What is solar panel cost?
- What is the right price for solar?
- Average solar panel cost near you
- Average solar panel cost by state
- Average solar panel cost by system size
- Average solar panel system cost by panel brand
- Other factors that influence price
- How much do solar batteries cost?
- Are solar panels worth it?
- Use our solar calculator
Key takeaways:
- Solar is now cheaper than it has ever been, with a cost of $11,590 for a solar system for the average home. This reduced cost means homeowners will get investment returns between 10-20% and a five to 10 year payback period!
- Solar panel cost varies between 5% and 10% by location or by brand, but it can vary significantly based on the size of the system.
- The size of a solar system is determined by your power usage and the amount of sunlight available in your area.
- Our solar panel calculator (above) will show you just how many solar panels your home needs and the prices offered by local solar systems for the system size you need.
What is solar panel cost?
When someone talks about “solar panel cost”, they are talking about the cost for a professionally installed, grid-tied, solar system. This encompasses more than just the solar panels themselves.
Solar panel cost includes all of the other equipment (inverters, circuit breakers, wiring, etc.), labor costs, permits, and inspections required to install and commission a residential solar panel system.
"Cost per watt" is the most common way used to quote prices in the solar industry, because it allows you to compare the relative value between solar panel systems of different sizes.
The following chart breaks down exactly what goes into the average solar panel cost:
Chart 2: What is the breakdown of cost in an installed residential solar system? (cents per watt)
If you're looking to do a DIY solar installation, you might be wondering how much an individual solar panel costs. Individual photovoltaic solar panels sell for between $0.40 per watt to $1.10 per watt, not including installation costs. That's between $80 and $400 for an individual panel.
What's the right price for a solar panel installation?
You may see some solar quotes with prices that seem too good to be true. That's why we give you a low quality warning. If you get quoted for a ridiculously cheap price, the installer might be using low-quality equipment or an unsustainable pricing model. You want to use a solar installer that is charging enough to stay in business - as you'll be relying on them for the next 25 years!
You also want to make sure your installer is giving you the best quality at the best price possible. This is why getting multiple solar quotes is so important. You can compare quotes using our solar panel calculator to help you find the best price for a high quality solar installation.
Current solar panel cost near you
Showing data for:
Change
Prices based on a 5.7kW system, after 26% federal tax credit
Net profit (savings less system cost)
$64,934-$79,364
Payback period
5-6.1 years
Recommended size for the selected utility bill
5.7kW
Solar panel cost calculator
Average solar panel cost in each state in 2021
The location of a home affects solar pricing in a few ways.
First, the amount of sunlight available dictates how many solar modules you will need to power your home. The less sunlight your home gets, the more solar panels you will need to meet your energy needs. The more solar panels you need, the more you have to pay for an installation.
Market prices also vary between locations because of things like competition between solar installers, local job volumes, the cost of business overheads, and different state and local policies.
Table 1: Average cost solar by state
| State | Avg cost per watt |
Cost of a 6kW system
(After tax credit) show before tax |
|---|---|---|
| Alabama | $2.45 | $10,878 |
| Alaska | $2.41 | $10,678 |
| Arizona | $2.67 | $11,837 |
| Arkansas | $2.63 | $11,677 |
| California | $2.65 | $11,766 |
| Colorado | $2.44 | $10,834 |
| Connecticut | $2.86 | $12,676 |
| District of Columbia | $2.88 | $12,796 |
| Delaware | $2.65 | $11,757 |
| Florida | $2.61 | $11,593 |
| Georgia | $2.33 | $10,359 |
| Hawaii | $2.67 | $11,837 |
| Idaho | $2.52 | $11,198 |
| Illinois | $2.57 | $11,397 |
| Indiana | $2.49 | $11,038 |
| Iowa | $2.53 | $11,238 |
| Kansas | $2.39 | $10,598 |
| Kentucky | $2.34 | $10,398 |
| Louisiana | $2.38 | $10,558 |
| Maine | $2.87 | $12,756 |
| Maryland | $2.74 | $12,157 |
| Massachusetts | $2.87 | $12,756 |
| Michigan | $2.66 | $11,797 |
| Minnesota | $2.74 | $12,157 |
| Mississippi | $2.64 | $11,717 |
| Missouri | $2.59 | $11,477 |
| Montana | $2.42 | $10,758 |
| Nebraska | $2.83 | $12,556 |
| Nevada | $2.61 | $11,597 |
| New Hampshire | $2.83 | $12,556 |
| New Jersey | $2.78 | $12,343 |
| New Mexico | $2.44 | $10,838 |
| New York | $2.86 | $12,716 |
| North Carolina | $2.49 | $11,038 |
| North Dakota | $2.42 | $10,758 |
| Ohio | $2.50 | $11,118 |
| Oklahoma | $2.62 | $11,637 |
| Oregon | $2.50 | $11,118 |
| Pennsylvania | $2.38 | $10,558 |
| Rhode Island | $2.69 | $11,957 |
| South Carolina | $2.62 | $11,637 |
| South Dakota | $2.39 | $10,598 |
| Tennessee | $2.49 | $11,038 |
| Texas | $2.52 | $11,207 |
| Utah | $2.66 | $11,797 |
| Vermont | $2.85 | $12,636 |
| Virginia | $2.66 | $11,797 |
| Washington | $2.73 | $12,117 |
| West Virginia | $2.64 | $11,717 |
| Wisconsin | $2.60 | $11,557 |
| Wyoming | $2.57 | $11,397 |
Solar panel installation cost by system size in 2021
The size of a solar panel system also plays a role in how much the installation will cost.
Larger solar installations will typically have a lower cost per watt, because the panels can be purchased at a ‘bulk price’. However, these larger solar systems will still have a higher total cost, because they are made up of more individual panels.
Table 2: Average cost of residential solar systems by system size
| System size* | Avg cost per watt |
Avg system cost
(After tax credit) show before tax |
|---|---|---|
| 4kW | $2.31 | $6,831 |
| 5kW | $2.37 | $8,752 |
| 6kW | $2.80 | $12,432 |
| 7kW | $2.80 | $14,504 |
| 8kW | $2.75 | $16,280 |
| 9kW | $2.55 | $16,983 |
| 10kW | $2.55 | $18,870 |
Installed solar system cost for the best brands of solar panels in 2021
Below are the solar panel system costs for the 20 most frequently-installed residential solar panels.
Many of the solar modules on this list are from trusted manufacturers with great efficiency ratings and warranties, which is likely the reason they are so popular.
Table 3: Installed system cost before tax
| Panel model | Avg cost per watt | Avg 6kW system cost |
|---|---|---|
|
LG Solar LG335N1K-V5 |
$2.39 | $2.74 |
|
LG Solar LG375A1C-V5 |
$2.35 | $2.82 |
|
LG Solar LG375Q1C-V5 |
$2.51 | $2.83 |
|
LG Solar LG365Q1K-V5 |
$2.45 | $2.77 |
|
Panasonic VBH330RA03K |
$2.34 | $2.86 |
|
Panasonic VBHN340SA17 HIT+ |
$2.80 | $0.00 |
|
Panasonic VBHN330SA17E |
$2.38 | $2.77 |
|
Panasonic VBHN335SA17 |
$2.50 | $2.83 |
|
SunPower SPR-E20-327-COM |
$2.37 | $2.78 |
|
SunPower SPR-X22-360 |
$2.38 | $2.85 |
|
SunPower SPR-E20-327-D-AC |
$2.54 | $2.79 |
|
SunPower SPR-E20-327 |
$2.52 | $2.77 |
|
Canadian Solar CS3W-400PB-AG |
$2.38 | $2.77 |
|
Canadian Solar CS3U-355PB-AG |
$2.23 | $2.88 |
|
Canadian Solar CS3K-315MS |
$2.31 | $2.78 |
|
Canadian Solar CS1H-330MS BLACK |
$2.42 | $2.85 |
|
LONGi Solar LR6-60-HPB-305M |
$2.23 | $2.85 |
|
LONGi Solar LR6-60-HPB-310M |
$2.24 | $2.80 |
|
LONGi Solar LR6-60-HPB-300M |
$2.22 | $2.80 |
|
LONGi Solar LR6-72HBD-390M |
$2.27 | $2.88 |
Other factors that influence solar panel cost
The amount of electricity your home uses
Homes that use more electricity will need more solar panels to cover their energy needs. Although solar panels do get cheaper on a per-watt basis, the overall cost of the system will increase as more panels are added.
But, the higher a home's energy usage, the more solar panels can save the homeowners on their energy bills.
The type of solar panels you buy
The price of solar panels can vary depending on the type of solar panels you choose.
There are two main types of solar panels for residential solar installations: monocrystalline and polycrystalline. Monocrystalline solar panels tend to be more efficient and more expensive than other solar panels. Polycrystalline panels have a lower efficiency rating and come at a lower price point.
The type of inverter you buy will also influence the cost of your solar system.
Federal, state, and local solar incentives
The overall cost of solar can be influenced by the solar incentives available.
Across the U.S., homeowners can apply for the federal solar tax credit, also called the ITC. The solar tax credit makes installing solar more cost-effective by providing homeowners with a tax credit equal to 26% of the cost of their installed solar panel system.
Local solar tax incentives and rebates can end up saving homeowners thousands on a solar installation, especially when they're used with the federal solar tax credit.
See what solar incentives are available in your area by using our solar panel calculator.
How much does a solar system with battery storage cost?
There are three main types of solar installations. Grid-tied solar systems are the most common type of solar system in U.S. With a grid-tied system, your solar panels are connected to your utility and do not include battery storage. All of the solar panel cost data on this page above relates to this type of system, as it is the most common type of system installed.
Off-grid solar systems are not connected to the utility grid at all and rely heavily on battery storage. Because off-grid systems don't have access to the grid, they must have more solar panels and more battery storage in order to power the home when there isn't much sunshine. Because of that, off-grid solar systems could cost upwards of $30,000.
Hybrid solar panel systems are becoming more popular. With a hybrid system, solar panels are paired with battery storage, as well as being connected to the grid. A solar battery will usually add around $12,000 to your solar installation, bringing the average cost of a hybrid solar system to about $22,000.
However, the additional cost of a battery is typically subsidized by additional rebates and solar incentives, including the 26% federal tax credit.
Hybrid solar panel systems allow you to store your excess solar energy to use when your solar panels aren't generating electricity, or in the case of any emergency. As utility grid outages become more common, more and more solar installations are being paired with batteries. If having backup power is a major driver for you, then you should consider a hybrid system.
Are solar panels worth it?
Thanks to the low cost of solar panels and various solar incentives, solar panels are a worthwhile investment for most homeowners.
Solar panels save the average homeowner between $900 and $1,200 a year on utility bills. This means the average homeowner will have a solar payback period between 8 and 11 years. Then, they’ll be enjoying completely free solar electricity for another 15 years!
Your actual solar savings will depend on the size of your system, the cost of electricity in your region, and of course - how many kilowatt-hours of electricity you use. It also depends on what kind of net metering policy is available in your area.
Luckily, our solar savings estimator takes all of these factors into account when determining how much you will save with solar.
Learn more about how much solar panels will cost for your home with our solar panel cost calculator
While there is data on average home electricity usage and how many solar panels are needed to power the average household, these averages don't fully represent your individual needs.
Our solar panel calculator is the easiest way to determine the costs and savings of a solar panel installation for your specific home.
All you need is your address and the value of your monthly electric bill, and our solar calculator will determine your local utility company’s electricity rates and how much power you use in order to tell you:
- How many solar panels you need to power your home.
- How many solar panels will fit on your roof and where they will go.
- How much your solar panels will cost.
- How much your solar panels will save you.
So, what are you waiting for? With the low price of solar and the federal solar tax credit, the best time to go solar is now! Use our solar calculator and find out what solar savings are in store for you.
*Cost data based on quotes for fully-installed solar panel systems. Total prices are shown after applying the 26% federal tax credit. Cost per watt data is shown before applying the 26% tax credit.
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