June 2017 - Update on the real cost of installing solar around America
Hi All, Solar panel cost has fallen off a cliff in the last month with noticeable drops in average cash system prices in California $3.18, New York $3.28, Massachusetts $3.27. Systems have stabilized a bit in Florida, Utah and South Carolina after sharp drops in the previous six months. Florida is still the cheapest state in the US to install solar panels for your home. Results for your state and for financed systems are below.
How much do solar panels really cost in your city?
The average cost of installing a cash settled 5kW residential solar power system in America is currently
$3.08 per watt
- How much does a solar panel cost on its own
- How much does it cost to install DIY solar panels
- How much do solar panels cost if you get a solar company to install them
- What is the cost breakdown for an installed solar power system
- Average cost of installing solar panels in each state
- How to organize a solar panel installation for your home
- Top 10 tips to getting the best solar quotes for your home
The real average cost of solar panel installation in the US at June 2017
|State||Cash Purchase (installed)
$/watt before 30% solar tax credit
|Financed Systems (installed)
$/watt before 30% solar tax credit
|Third party owned PPA
(Power Purchase Agreement)
|District of Columbia||$3.29||$3.65||14.0 cents/kWh|
|New Hampshire||$3.26||$3.60||15.8 cents/kWh|
|New Jersey||$3.22||$3.58||14.6 cents/kWh|
|New Mexico||$3.08||$3.45||14.0 cents/kWh|
|New York||$3.28||$3.65||17.0 cents/kWh|
|Rhode Island||$3.24||$3.68||16.0 cents/kWh|
|South Carolina||$3.08||$3.42||16.0 cents/kWh|
How do I work out the cost of installing solar panels on my home
Every house is different and these are the factors that determine how much you should pay to install solar.
How do I work out the cost of installing solar panels on my home?
Cost of installing DIY solar panels
The cost of a diy solar installation will generally be around $1 per watt cheaper than the cost of getting a solar company to organize the installation of your solar panels. It can be more or less depending on the amount you are quoted by a solar company and whether you physically install the solar panels yourself or engage an electrician to install them for you.
How much does a solar panel cost individually
When asking the question "how much do solar panels cost?" the first thing that you have to clarify is whether you wish to buy a single solar panel or whether you want to know the costs involved in getting a full solar power system installed at your home.
For most people what they really want to know is the total cost of installing solar panels on their home. This is usually a very different figure to just the cost of the solar panels because it also includes the cost of an appropriate solar inverter, a framing system to attach the solar panels to your roof, installation by a qualified professional (this is often a necessary pre-requisite to claim solar incentives or solar tax credits) and all the permitting and paperwork required by both your utility and your city or county government.
The costs of a single solar panel has fallen significantly in the last 5 years from around $4 per watt to now being routinely available in pallet quantities for around $1 per watt. In other countries the cost of solar panels on their own is as low as $0.50 per watt but the imposition of an anti-dumping tariff on Chinese solar panels by the US government in 2014 has increased the cost of solar panels in America.
What is surprising to most people is that the cost of the solar panels themselves is only a fraction of the overall costs involved in installing a solar system. If you are looking for just the cost of solar panels on their own then there are a number of websites that will sell small volumes of individual solar panels to individuals and arrange shipping across the country.
Solar panel cost information that is expressed as an average solar system cost for either a location, for a specific size of solar system, or for a solar system using a specific brand of solar panels is of some use to you as a potential buyer of a solar system but by no means does it give you the full story.
What you need to know is what the cost is to go solar and what the return and payback period will be specifically based on the characteristics of your home. Things such as location, roof type and structure and of course your power usage.
This is why most Americans use Solar-Estimate to collect their quotes for solar because this site allows you to enter your location, utility provider, roof type and average monthly electricity bill and from this information (and its database of utility rates, solar irradiation in different locations and solar offers available from solar companies etc) it is able to calculate the number of solar panels you need, give an online estimate and then also show you the best deals available in your area for systems around the size you need.
More information about the cost of solar
Are solar panels worth it?
In general terms if you live in one of the 30 or so states that have a net metering law and you pay federal income tax (and so can get the cash benefit of the 30% solar tax credit) then solar can be a great investment.
As at May 2017 recent falls in retail selling prices for installed solar systems have meant the average payback on a residential solar system installed in America has fallen to below 7 years. So after seven years you have paid the same whether you did or did not buy a solar system but if you did you then have at least 18 years of free power to look forward to.
In some states and for some lucky homeowners in states like California, Massachusetts, Connecticut, New York and New Jersey the return can now be as quick 5 years meaning you are then free to enjoy 20 years of free power from your system after it has paid itself back.
In fact even in other states like Florida, Utah, Texas and South Carolina whilst the payback period at 8-10 years is a little longer it still represents a return of 10-12% which is higher than the long term returns from either the property market or the share market.
But the thing to remember is that this return is only this good because of the 30% tax credit and the net metering law and either of these incentives could go at any time. This is why it is important that you evaluate the suitability of your house to solar panels sooner rather than later.
Cost breakdown for each component in an installed solar power system
Based on $4.06 average cost of installing solar panels reported by solar-estimate.org for May 2016 the following is our estimate of the breakdown of the individual component costs that go into the total cost of installing residential solar panels.
How much do different brands of solar panels cost
The range of cost difference between the most expensive tier one brands such as Sunpower and Panasonic solar panels and the myriad a second and third tier brands is usually between 20-40 cents per watt at the wholesale level.
The cheapest second and third tier solar panels are now available in the US at around $0.55 per watt for a solar company that can buy 5 to ten pallets at a time.
The Chinese made first tier solar panels are usually around $0.60-$0.65 per watt and the most expensive high efficiency panels such as Sunpower and Panasonic are usually sold at around $0.80 to $0.90 per watt.
As with any other business solar companies have to put a margin on their costs and so at the retail level you will usually find there is $0.30-$0.50 cents per watt difference in pricing between systems using tier one equipment and systems using second or third tier panels.
Whilst some of the producers of high efficiency panels make some pretty bold (and in my view unsubstantiated) claims about how much more power their panels will introduce there is something to be said for a solar panel from a company that is known as a high quality manufacturer and also invests a lot in their ongoing brand.
It is this second point that is the reason I really like brands like Panasonic and LG because these guys have a lot at stake when they put their brand on a product of any type.
How we get and calculate solar panel cost data
We have four ways in which we obtain information about the cost of installing residential solar panels in America.
- The first source of our solar panel cost data is Solar-Estimate.org, a website originally funded by the Department of Energy that is now used by over 80,000 consumers a year to request quotes from solar installers. We aggregate the responses to these solar quote requests and summarize this data on SolarReviews.com.
You can use the www.solar-estimate.org solar panel payback calculator here. This will tell you how many solar panels you need to zero out your utility bill, how much they should cost and your return, savings and payback period.
- The second source is government solar cost data. In several key states when solar panels are installed on a home the cost of this installation has to be reported to various levels of government. Where possible we make this data available online and from this we have data on over 50,000 residential solar installations.
- The third source of data is comments in the Solar Panel Talk solar forum, the most widely used solar panels discussion website in America. There are thousands of posts on this site discussing solar quotes consumers have received.
- The fourth source of solar panel cost data is the ability we give for users of this site to upload a quote they have received from a solar company and compare it to other solar quotes other consumers have received from other solar installation companies.
Why our installed cost data is different to solar panel cost data on government websites?
The solar panel cost information shown on this website shows lower costs than those reported on government websites.
For example at the time of reporting:
Californian government solar website puts the average cost of installing a 5kW solar power system in California at
$5.24 per watt
There are two reasons for this. Firstly the reported government data also includes PPA (Power purchase agreement) and third party lease installations. In these installations the consumer has not actually paid an upfront amount for the system and the solar companies often report a higher than market cost for these systems. They do this partly because they want to encourage their customers toward a PPA rather than a purchase and also because it means they get a larger solar tax credit for the job (which they then sell to investors).
The second reason our solar panel cost data is lower is that the Solar-Estimate.org platform attracts very competitive bids from installers. With over 80,000 consumers seeking solar quotes through this platform in the last year solar companies know that they have to submit a very competitive proposal to win your business. You can see this by requesting a solar quote on your own home here.
The lack of transparent cost data is a major issue for the US solar industry. Other bodies are also trying to make more cost information available including the Department of Energy through the openpv project. However, this is a voluntary scheme and appears to be suffering from the fact that reporting of cost data is voluntary. This site puts the cost of residential installations in California since August 2015 at $4.53 per watt but has only a very small sample set of data. There is also no data about the brands of equipment used on that site.
Cost of installing a complete solar power system for your home
For most people the real price you are looking for when posing the question "how much do solar panels cost?" is what is the total cost of installing solar panels for your home. To get this pricing the best site on the internet is Solar-Estimate. This website, which was originally developed by the US Department of Energy gets per watt pricing data for installed residential solar systems from around 200 installers around the country.
If you enter your details into this site you will find out how much solar panels cost in your area and also:
- How many solar panels you need to cover your utility bill
- How much unshaded roof space you would need
- You will get a formal exact quote from three of this site's highest rated installers so you will have competitive bids for different types of systems
- You will see the rebates and incentives that apply in your area and how much they will save you
- You will see your likely return and payback period from going solar
What we have done at SolarReviews is create pages showing you the costs of completed residential solar systems based on data we have received from solar-estimate.org. There were more than 80,000 estimates for residential solar power systems done through the solar-estimate.org site in 2015 and we have aggregated this data so you can search for the cost of installing solar panels either by location or by system size.