How much do solar panels cost in 2024?

Average solar panel cost by state

The average price for a 6-kilowatt (kW) solar panel system is $17,852. That price drops to $12,497 after the full federal solar investment tax credit (ITC), which gives you a federal income tax credit equal to 30% of the cost of your solar energy system.

Your actual costs vary based on local labor rates, available financial incentives, equipment quality and other factors. Depending on the size of your roof and your energy needs, you could pay anywhere from $10,000 to $30,000 or more. On the high end, we talked to a solar customer in Hawaii who spent $100,000 going solar.

How much does it cost to install solar panels?

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. The cost per watt is what you pay for each unit of power of your solar energy system. For example, if a 5-kW (5,000-watt) system costs $3 per watt, the total cost is $15,000 (5,000 watts x $3 per watt).

If you just need a few panels for a small do-it-yourself solar project, expect to pay around $200 to $350 per panel (between 80 cents and $1.40 per watt).

The difference between $3 and $4 per watt can add up to thousands of dollars.

It’s worth it to get a few quotes on a system, whatever the size. One ConsumerAffairs reviewer, Brad in California, was quoted almost $26,000 for a 5-kW system, which works out to $5.20 per watt. Brad said that “for a 4.97-kW system … it should be priced between $13,071 and $17,047. I personally would have expected a price of $13,668 for a 4.97-kW system ($2.75 per watt).”

Online tools like Project Sunroof and NREL's PVWatts Calculator are great resources for estimating your solar installation costs.

» COMPARE: Best solar energy companies of 2024

Solar panel installation cost breakdown

Your energy needs determine how many panels you need, which affects the overall price of your home solar system installation. Local climate and the availability of sunlight in your area also play a role in how much you end up paying.

How much do solar panels save?

Switching to a home solar system could reduce your energy bill by 75%. The savings you see will vary based on your electricity rates, the climate and your particular energy needs.

Like a lot of solar energy customers we talk to, Brandie in Texas took their “electricity bill down significantly, so even with the price we're paying for the solar panels and the amount of electricity we're using … it's still much cheaper than what we were paying before we had them.” Diana in Pennsylvania told us their electric bills are between $0 and $10, even in the summer, after going solar.

Depending on your out-of-pocket costs for a solar power system, it could take seven years or longer to break even, according to Wayne Turett, the founder of The Turett Collaborative, an architectural firm that specializes in sustainable designs.

The average U.S. electric bill is $80 to $178 per month, according to the U.S. Energy Information Administration.

The good news is we expect to see solar hardware continue to get cheaper, thanks to advancements in technology and increased competition in the market.

» EXPLORE: Most efficient solar panels

Other cost factors to consider

Some people do see their electricity bills go back up if they run into a problem with their system — like Eunice in Nevada, who didn't realize their inverter needed to be replaced, which led to an unexpected increase in their utility costs.

“Everything had been going well and my energy bill had averaged $13 to $15 a month,” Eunice said. “Until I received a bill at the end of September 2022 in the amount of $429 from NV Energy.”

So, keep in mind that maintenance, including panel cleaning and occasional repairs (depending on the warranties), adds to the overall cost. Most solar energy companies offer monitoring apps that help you see how much energy your system is producing and when maintenance may be required.

» COMPARE: Solar energy pros and cons

How can I pay for solar panels?

Like buying a new car, you can pay the full cost of solar panels upfront, but most people don’t. People often use loans, solar leases or power purchase agreements (PPAs) to pay for or avoid paying upfront costs. You might also consider a cash-out refinance or HELOC.

Get a loan

In general, solar loans work a lot like any other kind of loan: There’s an application and approval process, and you repay the loan amount in installments over time. Financing solar panels makes sense as long as the loan payments are cheaper than your existing electricity bill.

A solar customer we talked to, Christian in California, said he “did the math,” and everything worked out. “Instead of paying $100 or $200 for the electric bill, if I use the same amount of energy or less, I will end up paying just the financing, which is $150,” he said. “But only for six years, and then after that, the panels will be mine and I don't have to pay anymore.”

Just remember to pay attention to the interest rate. Another reviewer in California said he’s “paying more for the loan payment than I save from the utility. Interest payments alone are over $1,000 per year and this will continue for a long, long time.”

» MORE: Best solar financing companies

Lease solar equipment

With a solar lease, you don’t own the equipment. Instead, you make monthly payments to use the solar energy system for the duration of the lease term. Your leasing company is responsible for maintaining and repairing the solar panel system during this time.

You won’t be eligible for the federal tax credit if you lease equipment or enter a PPA.

Another solar power customer, Dan in California, said he “opted for the lease approach instead of a purchase. So, we did not have to put any money upfront at all. Zero. I work in finance/accounting and generally feel that if it sounds too good to be true, it usually is. But in this case, it truly has turned out even better than we could have hoped for.”

At the end of the term, you typically have the option to renew the lease, purchase the system at fair market value or have the leasing company remove the system from your property.

» LEARN: How does a solar lease work?

Enter a power purchase agreement

A power purchase agreement (PPA) is another way to get solar panels installed on your property without paying for them upfront.

An energy service company (ESCO) installs the panels for you but owns and maintains them. You then purchase the electricity generated by the solar panels from the ESCO at a fixed price. You can still save money on your electricity bills with a PPA, but some reviewers said they've felt stuck with a company.

» COMPARE: Solar lease vs. solar PPA

Pay cash upfront

If you can pay for the system in full upfront, it’s usually cheaper in the long run. For example, consider this review from David in California:

“Financing it was $18,000,” he said. “But if I paid cash, it was $15,000 and they gave me a $1,000 debit card. It only cost me $14,000. I'm totally satisfied. I haven't paid any electric bills in six months now. I'd recommend it to anybody.”

It typically takes five to 15 years to break even on installation costs. Solar panels pay for themselves faster in states where electricity costs are high.

» MORE: What is solar panel ROI?

Bottom line: Are solar panels worth it?

After incentives, the general range is $10,000 to $30,000 for an average American household to invest in solar panels. This includes the cost of the panels themselves, installation and any additional equipment needed.

Whether or not it’s worth it for you depends on how much you can save on your electricity bill. If you aren’t financially ready to install solar panels yet, you still have options to incorporate solar technology into your life with solar phone chargers and passive solar home design.

» NEXT: 7 steps to going solar