How much do solar panels cost in 2021?
Updated
The average solar panel system in the United States will cost somewhere between $15,500 and $20,000, which works out to about $2.60 - $3.35 per watt of solar installed. Once you take the federal solar tax credit into account, the overall cost drops to around $11,500 to $14,800 - that’s almost 80% lower than the cost of solar 10 years ago!
Even though solar is cheaper than it’s ever been, it’s still a substantial 25-year investment, so finding a high-quality installation at a good price is important.
SolarReviews is here to help. As both the largest reviews website for the solar industry and a marketplace for consumers to get bids from solar companies, we have a unique perspective on how to balance customer satisfaction and price.
Key takeaways
- The national average cost to install solar panels is between $15,500 and $20,000 after the federal solar tax credit, which comes out to about $2.60 per watt to $3.35 per watt.
- Surprisingly, price is just one small factor to consider when going solar, you also need to think about installation and equipment quality, and the ability of the installer to offer long-lasting service and support.
- The system size, where you live, and the equipment you use will all influence how much a home solar installation will cost.
- Solar batteries will add a minimum of about $10,000 to your solar panel installation.
- SolarReviews recommends going with a local, reputable solar company with good reviews that offers prices between $2.60 and $3.35 per watt.
What is the right price for a solar panel installation?
Most solar quotes will have the installation cost shown in cost-per-watt ($/W), which just tells you how much you’ll pay for the power the system will produce. Generally, you’ll want to go with installers that offer prices between $2.60 per watt and $3.35 per watt.
To make sure you’re getting the best value out of the installation, you need to consider more than just the price tag. At SolarReviews, we actually believe you should only base about 25% of your decision on the price - instead, you should really focus on the installation and equipment quality.
If solar companies are charging insanely low prices, it’s probably an indication that they’re cutting corners somewhere. Maybe they’re using low-quality equipment, or maybe they don’t have the best installation practices. Either way, you don’t want to risk finding out.
Solar is a 25-year commitment, and part of what you’re paying for is 25 years of customer service. It’s worth it to spend a little extra money upfront so you can save yourself a headache in the future.
When it comes to a solar installation, you get what you pay for. It’s no coincidence that the solar companies that charge over $3.00 per watt tend to have higher customer review scores on our site. This isn’t always the case, but it’s certainly something to keep in mind while you’re searching for an installer.
Factors that affect solar panel installation costs
The main factors that determine the cost of a solar panel system are the system size needed, the location of your home, the amount of sun you can expect, local incentives, and the equipment that is used.
1. Solar system size
The size of a solar panel system will play a major role in how much the installation will cost.
Solar system size is measured in kilowatts, which tells you how much power the panels will deliver.
The size of the solar energy system you need will depend on how many kilowatt-hours (kWh) of electricity your home uses and by how much you want to reduce your electric bill.
The bigger the system is that you need, the higher the total installation cost will be. But, the cost per watt of larger systems is often lower because the equipment can be purchased at a bulk price and other overhead costs will be spread out over a larger system.
| System size | Number of solar panels* | Average cost per watt | Average total cost (after tax credit) |
|---|---|---|---|
| 4 kW | 11 | $3.25 | $9,620 |
| 6 kW | 17 | $2.95 | $13,098 |
| 8 kW | 23 | $2.85 | $16,872 |
| 10 kW | 29 | $2.75 | $20,350 |
| 12 kW | 34 | $2.75 | $24,420 |
| 14 kW | 40 | $2.60 | $26,936 |
| 16 kW | 43 | $2.60 | $28,860 |
*Based on 350-watt panels
2. Your location
The location of your home affects solar pricing in a few ways:
- How sunny your area is: The less sunlight your home gets, the more panels you need to cover your energy needs, and the higher the price you’ll have to pay
- State and local incentives: The 26% federal solar tax credit, also called the Investment Tax Credit or ITC, greatly reduces solar installation prices, but there is also a variety of state and local solar rebates and tax incentives that can help lower costs. You can read more about what incentives you qualify for in our State Solar Incentive Guide
- Market conditions: Local competition between installers, job volumes, cost of business overhead, labor costs, and different state and local policies can dictate solar panel cost
The following table outlines the average prices you can expect to see in different states based on these factors:
Table 2: Average cost of 6 kW solar system by state
| State | Average cost per watt | Cost of 6 kW system (after tax credit) |
|---|---|---|
| Alabama | $2.45 | $10,878 |
| Alaska | $2.41 | $10,700 |
| Arizona | $2.64 | $11,722 |
| Arkansas | $2.63 | $11,677 |
| California | $2.68 | $11,899 |
| Colorado | $2.51 | $11,144 |
| Connecticut | $2.86 | $12,698 |
| District of Columbia | $2.88 | $12,787 |
| Delaware | $2.65 | $11,766 |
| Florida | $2.58 | $11,455 |
| Georgia | $2.33 | $10,345 |
| Hawaii | $2.67 | $11,855 |
| Idaho | $2.52 | $11,189 |
| Illinois | $2.57 | $11,411 |
| Indiana | $2.49 | $11,056 |
| Iowa | $2.53 | $11,233 |
| Kansas | $2.39 | $10,612 |
| Kentucky | $2.34 | $10,390 |
| Louisiana | $2.38 | $10,567 |
| Maine | $2.87 | $12,743 |
| Maryland | $2.74 | $12,166 |
| Massachusetts | $2.87 | $12,743 |
| Michigan | $2.66 | $11,810 |
| Minnesota | $2.74 | $12,166 |
| Mississippi | $2.64 | $11,722 |
| Missouri | $2.59 | $11,500 |
| Montana | $2.42 | $10,745 |
| Nebraska | $2.83 | $12,565 |
| Nevada | $2.61 | $11,588 |
| New Hampshire | $2.83 | $12,565 |
| New Jersey | $2.78 | $12,343 |
| New Mexico | $2.44 | $10,834 |
| New York | $2.86 | $12,698 |
| North Carolina | $2.49 | $11,056 |
| North Dakota | $2.42 | $10,745 |
| Ohio | $2.50 | $11,100 |
| Oklahoma | $2.62 | $11,633 |
| Oregon | $2.50 | $11,100 |
| Pennsylvania | $2.38 | $10,567 |
| Rhode Island | $2.69 | $11,944 |
| South Carolina | $2.62 | $11,633 |
| South Dakota | $2.39 | $10,612 |
| Tennessee | $2.49 | $11,056 |
| Texas | $2.77 | $12,299 |
| Utah | $2.66 | $11,810 |
| Vermont | $2.85 | $12,654 |
| Virginia | $2.66 | $11,810 |
| Washington | $2.77 | $12,299 |
| West Virginia | $2.64 | $11,722 |
| Wisconsin | $2.60 | $11,544 |
| Wyoming | $2.57 | $11,411 |
3. Equipment type and manufacturer
Like most things, the brand dictates the price with solar. Panels from certain solar manufacturers are more expensive than others, and that doesn’t always mean they’re that much better in terms of performance.
For instance, Jinko Solar’s panels are much cheaper than premium brands like SunPower but have almost the same specifications and great customer reviews.
The following table outlines the cost of some of the most popular residential solar panel brands on the market:
| Panel manufacturer | Average cost per watt | Average system cost (after tax credit) |
|---|---|---|
| LG Solar | $2.84 | $12,610 |
| Panasonic | $2.87 | $12,743 |
| SunPower | $2.85 | $12,654 |
| Canadian Solar | $2.87 | $12,743 |
| LONGi Solar | $2.85 | $12,654 |
The solar panel brand isn’t the only thing that influences the price. The other equipment used in a residential solar system, like the type of inverter you use, will also impact the installation cost. Microinverters, for example, cost more than string inverters but they can lead to higher electricity production.
The type of solar panels you install can also influence the price, but only slightly. Most solar panel systems are installed with monocrystalline solar panels, but some homeowners may choose polycrystalline panels to save a bit on the upfront costs. You can get a better idea of the different types of solar panels here.
The racking system installed will also change how much the installation costs. If you live somewhere that experiences heavy snow or hurricanes, you might need a more durable racking setup, which will bump up the price.
Solar battery costs
Adding energy storage to a solar power system will add a minimum of around $10,000 to the installation cost. That’s a decent chunk of money, but the good news is that solar batteries are covered by the solar tax credit and you may even qualify for additional battery incentives in your state.
When you consider the federal tax credit, a solar panel system paired with battery storage will cost an average of $21,000. The actual cost of installing a battery will vary depending on the battery manufacturer and how many batteries you choose to install.
Despite being expensive, solar batteries like the Tesla Powerwall and LG Chem are becoming increasingly popular as widespread power outages are now more common than ever. Batteries are also becoming a popular addition in areas with Time-of-Use electricity rates, as they allow homeowners to save more on their electricity bills.
But for most homeowners, solar batteries are more of a luxury than they are a necessity.
How can you find the right solar installation company?
At SolarReviews, we recommend going with a reputable local solar installer. Generally, you’ll want the installer to meet these requirements:
- Been in business for over 5 years
- Hires their own installation crew
- Has between 15 and 20 employees
- At least one NABCEP-certified installer
But remember, you also want to make sure the company is charging a fair price for their services. If it’s too cheap, you might have to worry about a shoddy installation or low-quality equipment. If it’s too expensive, you might be paying an extra premium for no added benefits.
You need to find a happy medium of a solid price from a trusted company that uses high-quality materials. The best way to connect with companies in your area is by using our state-of-the-art solar calculator, which will not only give you a detailed cost and savings estimate catered to your specific home, but will also put you in contact with our vetted solar installers.
Learn more: Guide to the top-rated solar installers in your area
Calculating how much solar panels will cost for your specific home given its location and electricity use
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
Are solar panels worth the investment?
Thanks to the lower-than-ever cost of solar panels and various solar incentives, solar panels are a cost-effective investment for the majority of homeowners that will provide an excellent return on investment.
Not only do they lower your energy bills, but you also get to power your home with clean renewable energy and reduce your dependence on your local utility company.
Even though spending up to $20,000 is daunting, federal incentives eliminate 26% of solar system costs after 1 year. There are also various ways to finance a solar system - from solar loans and leases to PPAs - so you can pick whichever option that works best for you.
Plus, solar panels provide significant utility bill savings in most areas. An average home solar panel system can save between $1,000 and $1,600 per year on electricity bills depending on the state’s net metering policy and the home’s energy consumption.
Actual solar savings will depend on the system size, the cost of electricity, home energy usage, and what net metering policies are in place, but the average solar homeowner can expect their solar payback period to be between 8 and 11 years. After that, they’ll be enjoying completely free solar electricity for at least 15 more years!
If you’re still not convinced, you can use our solar panel calculator to find out how much solar costs and can save you for your specific home based on your average electric usage and prices in your area.
Ben Zientara
Solar Policy Analyst and Researcher
Ben is a writer, researcher, and data analysis expert who has worked for clients in the sustainability, public administration, and clean energy sectors.