How Much Does It Cost to Install Solar Panels

The cost of solar panels in the U.S. has dropped to around $20,020 from over $50,000 ten years ago. This article will break down the various factors that affect the cost of solar, including system size, brand, and state.

Average Cost of Solar Panels in 2022

After taking into account the federal tax credit and other factors, the average cost of a solar system in 2022 is around $16,870, which is about $23,170 after tax. On a per-watt basis, the cost of solar panels in that year is around $2.86. This data comes from the data collected in 37 states and Washington D-C.

Although solar installations are unique, the average cost of a system can vary widely depending on the type of panels you choose and the state where you live.

How Much Does It Cost to Install Solar Panels

How Long Does It Take to Break Even on Solar Panels?

It typically takes around 8.7 years for people to recoup their investment in solar panels. In other words, instead of just buying a single product, consider investing in solar instead.

The solar payback period is a calculation that takes into account the various costs associated with installing a solar system. It takes into account the savings that you’ll make on electricity and the incentives that are available to you.

What States Are The Best For Solar Energy?

Although there are varying incentives in different states, everyone has their own unique needs when it comes to going solar. For instance, some people may be better off in states with strong incentives.

  • New York
  • Rhode Island
  • Iowa
  • Connecticut
  • Maryland

Cost of solar panel by state

Washington D.C.$20,460$34,100$8,866$3.41
North Carolina$16,500$27,500$7,150$2.75
New Hampshire$18,360$30,600$7,956$3.06
New Jersey$16,740$27,900$7,254$2.79
New Mexico$19,260$32,100$8,346$3.21
New York$18,960$31,600$8,216$3.16
Rhode Island$18,900$31,500$8,190$3.15
South Carolina$16,680$27,800$7,228$2.78

What Impacts the Cost of Solar Panels?

A solar installer’s sticker price is only one of the many factors that affect the cost of a system. In addition to your unique situation, other factors such as your property’s electricity usage can also affect the cost of solar panels.

1. System Size

One of the most common factors that affects the cost of a solar system is the size of the system that you choose. This is because a bigger system will pay more money than one with fewer panels. Another common example is the Costco-like relationship between the price and the size of the system. In this case, the larger the system, the lower the per unit price.

Although a bigger solar system might cost more, it’s also likely to save you more money in the long run. For instance, if you have a 10 kilowatt system that provides all of your electricity needs, you might have to pay higher out-of-pocket, but you’ll be able to cut down on your utility bills and save more money as a result. Low-interest solar loans are also becoming more common, making it easier to purchase a solar panel system that can completely offset your electricity bill.

2. Panel Brand and Equipment Quality

The price of a solar panel brand is also affected by its quality. For instance, systems that use panels made by the company known as SunPower are more expensive than those that use other brands. For instance, a 6 kilowatt system with a price tag of $22,000 can go for a high-end product from SunPower.

Despite the varying factors that can affect the price of a solar panel brand, most manufacturers follow a similar price range when it comes to their products. It’s important to note that other factors such as the type of equipment that’s used, the warranty, and the location of the plant also affect the system’s final price.

3. Location

The cost of installing a solar system varies by location, especially due to the varying sizes and incentives offered by different states. It’s important to note that these factors can affect the overall spread of the cost.

Through our data analysis, we were able to find the lowest average cost per watt for solar panels in Arizona. The highest value of the federal tax credit that was available in 2022 can be found in Washington DC. However, since system sizes vary by state, it’s not always fair to compare a 10 kilowatt system in Florida with one in Massachusetts.

4. Roof Characteristics

Your roof and home’s characteristics can also affect the cost of a solar system. For instance, if your roof slopes toward the south, it’s easier for a solar installer to install panels on it. Also, having a single roof plane with optimal sun exposure can reduce the number of panels needed.

If your home has multiple levels, dormers, or gables, then additional work may be required to finish the installation. This can add up to a higher cost.

5. Panel Type

Monocrystalline solar panels are commonly the best choice when it comes to replacing older solar panels on your home. However, they can be more expensive than poly-crystalline panels due to lower efficiencies.

Although thin-film solar panels are commonly used for residential setups, they aren’t as commonly used for commercial or recreational setups.

6. Permitting and Interconnection

Although labor and equipment costs are typically the main factors that affect a solar system’s cost, other factors such as the cost of permits and interconnection fees can also affect the price. Getting a solar permit is very important before a system can be connected to the grid.

In an effort to make the process faster and more cost-effective, the Department of Energy is working on developing a new program that will allow people to get an approved interconnection faster.

7. Labor

One of the most important factors that affects the cost of installing a solar system is the company that’s actually doing the job. Although a well-known solar installer can charge more for their services, the final price depends on various factors such as their internal operations and warranty offerings.

How Do You Pay for a Solar Panel Installation?

After you have determined the cost of solar for your project, it’s time to start planning how you’ll pay for it. There are various financing options available to people who want to install solar panels. One of the most common types of this is a cash purchase.

A cash purchase is typically the best option if you’re planning on using the funds to pay for a solar system and have enough money available to pay for it. You can also take advantage of the federal tax credit.

If you’re not ready to commit to a cash purchase, a solar loan might be the best option. It allows you to take advantage of the various incentives and rebates that are available to people who install solar panels.

A lease or PPA is a great option if you’re not ready to commit to a cash purchase and would like to have someone else monitor and maintain the system. You can also lock-in a lower monthly electricity payment.

Reduce Your Solar Costs with Rebates and Incentives

In addition to the various factors that affect the cost of a solar system, it’s also important to consider the various incentives and rebates that are available to people who want to install solar panels. These include tax credits, performance-based incentives, and energy credits. Most of these are available to people in areas where there are various electric utilities and cities.

Incentive with the Federal Solar Tax Credit

The federal tax credit is the best way to go solar in the country. This is because it allows people to deduct the cost of their solar panels from their federal taxes. For instance, a 10 kilowatt system that costs around $28,600 would get you a 30 percent tax credit.

The tax credit would reduce the cost of your system by about $8,580. This is because the 30 percent tax credit would allow you to reduce the cost of your system by about $20,020.

The Cost of Solar After Installation

One of the most important factors that you should keep in mind when it comes to the cost of installing solar panels is the long-term maintenance. Unlike other types of solar systems, solar panels don’t require regular maintenance.

Although you can usually expect your panels to last for a long time, there are still risks that can occur with the system. For instance, you might need to remove trees or hire a cleaning company to keep the system running efficiently.

How Does a Solar Panel Installation Work?

Getting the panels installed on your home takes a long time. It usually takes around one to three months after you sign a contract with your installer. Once the panels are connected to the electricity grid, they’ll start producing energy.

1. Choosing and order your equipment

Before you can start working on a solar system, it’s important that you confirm with your installer that you want to have the right equipment for the project. The two main components of a solar system are the panels and the inverter. Most homeowners look for the best possible combination of efficiency and durability when it comes to choosing solar equipment.

2. Engineering site visit

After you’ve signed a contract with your installer, an engineer from the company will come to your home to check the system’s compatibility. He or she will also inspect the structural condition of your roof and the electrical panel in your basement.

3. Permits and documentation

Getting the necessary permits and documents related to the installation of solar panels can be a daunting task. Fortunately, most of this process is handled by the installer, who will help you apply for government incentives and documents needed to legally go solar.

4. Solar installation: the big day

Getting the panels installed on your home is an exciting and time-consuming process for many solar homeowners. There are several steps involved in the installation process, such as wiring your home, preparing your roof, and attaching the components. Depending on the size of your system, the installation might take around a couple of days.

5. Approval and interconnection

After the panels have been installed, the next step is to connect them to the electricity grid. This process can take around a couple of days. Before you can start generating power, a representative from your local government will inspect the system to make sure that it’s working properly.

An installer will also make sure that the wires are working properly and that the mounting hardware is secure. They’ll also check that the system meets the building setback codes.


The cost of solar panels is only as important as the return that you’ll get from your investment. For most people, going solar is a great investment because it allows them to generate free electricity. After around seven or eight years, you can break even on your solar system.

By going solar, you’ll be able to generate your own electricity, which means that you’ll no longer be paying for the electricity that you use from the grid. In addition, through net metering policies, you may be able to receive credit for the additional power that you produce.