Solar Panels For Your Home: How Much Do Solar Panels Cost?
Updated September 30, 2024 at 12:21 pm
Solar panels have become a popular choice for homeowners who want sustainable and cost-effective energy solutions. These panels capture the sun’s energy to produce electricity, providing a renewable and eco-friendly alternative to conventional power sources. Homeowners who install solar panels can greatly lower their electricity expenses, enhance their property value and play a part in promoting a cleaner environment.
Thanks to environmental incentives and industry advancements, solar panel cost in 2024 is affordable and well worth it for many homeowners in the U.S. As the total investment in solar panels is going to vary for every person, this guide is designed to give you a better idea of how much solar panels will cost for your home in 2024.
Our Methodology Our research is designed to provide you with a comprehensive understanding of personal finance services and products that best suit your needs. To help you in the decision-making process, our expert contributors compare common preferences and potential pain points, such as affordability, accessibility, and credibility.
Vault’s Viewpoint on Solar Panel Cost
- Your solar panel costs will primarily depend on your energy demand, geographic location and several unique considerations for your property.
- The panels are usually just a fraction of the total expenses involved in a home solar energy installation, which also includes costs for the other electrical equipment, labor, permitting and project overhead.
- The cost of your solar panels can be reduced if you qualify for federal or local energy incentives, tax credits or rebate programs.
Solar Panels Costs in 2024
The average cost of solar panels depends on many individual factors and considerations but generally falls between $18,000 and $29,000 for homeowners in 2024. This average represents the cost of an 8 kW solar energy system before the application of any tax credits or financial incentives.
Ultimately, the price you can expect to pay for your unique home solar panel installation will depend on several factors, including:
- The number of solar panels.
- The location of your property
- Your system components
- Tax credit qualification
Average Cost of Solar Panels by State
Across the U.S., state solar industries vary in maturity, energy policies and available services. As a result, geographic location is one of the largest factors in the cost of installing solar panels. If you are considering solar in the U.S. right now, here is an estimate of what you may pay for a typical residential solar energy system in 2024.
| 8 kW Solar System (Average Price) | Average Price After Applying the 30% Federal Tax Credit | |
| Arkansas | $22,400 | $15,680 |
| Arizona | $18,800 | $13,160 |
| California | $22,640 | $15,848 |
| Colorado | $25,040 | $17,528 |
| Connecticut | $25,360 | $17,752 |
| Washington D.C. | $26,320 | $18,424 |
| Delaware | $22,000 | $15,400 |
| Florida | $19,280 | $13,496 |
| Georgia | $22,960 | $16,072 |
| Iowa | $24,560 | $17,192 |
| Idaho | $22,800 | $15,960 |
| Illinois | $25,600 | $17,920 |
| Indiana | $27,680 | $19,376 |
| Kansas | $22,480 | $15,736 |
| Kentucky | $25,120 | $17,584 |
| Louisiana | $24,480 | $17,136 |
| Massachusetts | $27,840 | $19,488 |
| Maryland | $23,920 | $16,744 |
| Maine | $28,080 | $19,656 |
| Michigan | $25,920 | $18,144 |
| Minnesota | $25,120 | $17,584 |
| Missouri | $22,160 | $15,512 |
| North Carolina | $21,680 | $15,176 |
| New Hampshire | $28,160 | $19,712 |
| New Jersey | $23,120 | $16,184 |
| New Mexico | $24,000 | $16,800 |
| Nevada | $20,640 | $14,448 |
| New York | $26,320 | $18,424 |
| Ohio | $21,520 | $15,064 |
| Oklahoma | $20,560 | $14,392 |
| Oregon | $23,680 | $16,576 |
| Pennsylvania | $23,440 | $16,408 |
| Rhode Island | $28,000 | $19,600 |
| South Carolina | $21,600 | $15,120 |
| Tennessee | $28,320 | $19,824 |
| Texas | $19,040 | $13,328 |
| Utah | $22,480 | $15,736 |
| Virginia | $23,920 | $16,744 |
| Vermont | $27,280 | $19,096 |
| Washington | $23,600 | $16,520 |
| Wisconsin | $25,440 | $17,808 |
| West Virginia | $23,040 | $16,128 |
| U.S. Average | $22,880 | $16,016 |
What Factors Impact the Cost of Solar Panel Installation?
Solar panel costs can vary widely based on several factors. To help maximize your investment, here’s a look at the factors that can impact the costs of solar panels.
Type of Solar Panels
Solar panels are available in different types, each offering distinct features and advantages that can impact costs. The three main types include:
- Monocrystalline: These panels consist of a single, pure silicon crystal, making them highly efficient (about 15% to 20%) and long-lasting. They excel in low-light conditions and typically last over 25 years. But their complex manufacturing process results in higher prices.
- Polycrystalline: Made from silicon crystals that are melted together, polycrystalline panels are less efficient (13% to 16%) than monocrystalline panels. But they are more budget-friendly due to a simpler production method. They have a slightly shorter lifespan but still provide reliable performance for home use.
- Thin-film: These panels are created by layering photovoltaic material onto a substrate. Thin-film panels are the least efficient (around 7% to 18%) and have a shorter lifespan (10 to 20 years). But their lightweight and flexible nature, along with being the most affordable option, makes them ideal for specific uses like portable solar devices.
Location
The cost of solar panels can also be influenced by location for several reasons.
- Areas that receive more sunlight need fewer panels to produce the same energy, which can lower costs.
- Labor costs for solar panel installation vary from one region to another, impacting the total expenses.
- Local permit fees can vary significantly, contributing to the overall cost differences. ‘
- State and local incentives also play a role in reducing expenses, and these incentives can change based on location.
Installation Costs
Installation costs can also impact the cost of solar panels. Several factors that influence these costs include:
- Labor Rates: Labor costs can vary by region, affecting the total expense.
- Roof Characteristics: Complex installations on steep or shaded roofs may lead to increased labor time and costs.
- Permitting Fees: Fees for permits from local governments can vary significantly.
- Company Overhead: Different installers have their own overhead costs, which can impact pricing.
Incentives and Rebates
Federal credits can bring down the cost of solar panel installations. The most notable incentive is the Investment Tax Credit (ITC), which allows you to deduct a percentage of the installation cost from your federal taxes. As of 2024, the ITC offers a 30% credit for residential solar systems. This can substantially lower the upfront cost, making solar energy more affordable.
Energy Usage
The amount of energy your household consumes determines the size of the system you require. If your energy usage is high, you’ll need a larger system, which can drive up costs. But investing in a bigger system may result in significant savings on your electricity bills in the long run. To get a precise estimate of your energy needs, you’ll need to review your previous electricity bills.
Quality of Equipment
Investing in high-quality panels and inverters may come with a premium price tag, but they typically provide better performance and durability. For example, brands like SunPower or LG offer solar panels with higher efficiency rates and longer warranties (up to 25 years). Inverters, which convert the DC electricity generated by the panels into AC electricity for your home, also vary in quality and cost.
Roof Characteristics
Your roof, including the type, angle and condition, can impact installation expenses. Roofs with steep pitches or multiple levels can complicate the installation process, leading to increased labor costs. Roofs that require repairs or reinforcement prior to installation will also contribute to the overall expense. Shaded roofs might need additional equipment like microinverters or power optimizers to maximize efficiency.
Adding Up Solar Panel Installation Costs
When you purchase solar, there are many expenses beyond the panels themselves, including unique hard and soft costs for every system to operate and meet local safety standards.
Hard Cost: Solar Panels
First, solar panels usually only make up a small portion of a residential installation’s expenses, estimated to be about 25% of project costs, or $5,720 for the average U.S. homeowner. Although some homeowners may think of purchasing panels independently in an attempt to save money on upfront costs, in general, professional solar companies prefer to source and install their own equipment to guarantee safety and performance.
Hard Cost: Inverters and Balance of System
Encompassing all of the solar power components of your project other than the panels, Balance of System costs include expenses for inverters, wiring, mounting materials, required safety devices and other electrical hardware. Estimated at 20% of project costs or a U.S. average of $4,576, your actual expenses for inverters and BOS components will depend on the technology used and the capacity of your system.
Soft Cost: Labor
While some labor costs are incurred in the design and planning stages of a solar panel project, the majority of labor expenses will be recorded during the physical installation. In general, most solar installations are physically completed within a day or two and account for approximately 10% of project costs or $2,288 on average in the U.S.
Soft Cost: Permitting, Inspection and Interconnection
For a solar installation to legally operate on your roof or in your yard, it must be installed up to code, that is, within the guidelines provided by your local building authority and electric utility company. Typically, permitting, inspection and interconnection fees make up about 8% of the costs to go solar and can be near $1,800 nationwide. In many areas, a licensed electrician is required for a solar installation to meet local electrical codes.
Soft Cost: Project Overhead Costs
From supply chain, sales, marketing and administrative costs to sales tax, profit and miscellaneous expenses, project overhead costs can often make up the largest portion of a solar panel purchase. While the price of solar panels, batteries and other hardware costs have dropped significantly in the last 15 years, solar project overhead expenses rose by 31% between 2022 and 2014.
Recovering the Cost of Solar Panels
With costs upwards of $20,000 for typical homeowners, it is important to remember that most solar energy systems are designed to offset utility electricity expenses and help save money over time. So, beyond the upfront price alone, the long-term costs of solar panels can usually be recovered with participation in local solar buy-back programs like net metering or net billing.
To speed up the recovery of your solar investment, there are also many incentives and programs available nationally and locally. These include:
- Tax credits. In addition to the federal solar tax credit outlined above, several states offer residents a similar program to earn state income tax credits for qualified solar energy installations.
- Rebates. Whether through an equipment manufacturer, your city’s government or the electric utility that serves your property, the purchase of a solar energy system may also help you qualify for green technology or energy-efficient rebates in your area.
- Battery programs. In 2024, there will be an increasing number of established and pilot programs in which solar battery owners can be paid directly for sharing electricity with the utility grid during prescheduled periods of high energy demand.
- Tax exemptions. In many states, solar panel costs are exempt from sales and property taxes. With these exemptions, you may be able to save on the potential upfront costs of solar and avoid increased property taxes due to the value of your solar assets.
Frequently Asked Questions
Why is Solar So Expensive?
When looking at the average cost of solar panels, the final price of an installation may seem expensive without considering all that goes into a project or the long-term value of the investment. In addition to solar panels, inverters and other system components, going solar requires labor, permitting and several other expenses. While this can add up to a high buying price, solar panels are designed to reduce grid-power consumption for multiple decades.
Will Solar Panels Get Cheaper in 2024?
Although it is difficult to predict market trends in the dynamic solar industry, solar panels may be cheaper in 2024 than in years prior. After steadily declining for over 15 years, the price of solar temporarily plateaued and even increased during the early 2020s, largely due to supply chain interruptions. Today, the industry has largely recovered with the price of solar panels back on the decline, though high interest rates in 2024 may increase the total costs of a financed system.
Is Solar Really Worth the Money?
Every solar panel system is different, but in general, solar is really worth the money for homeowners in the right set of circumstances. By installing solar panels, you can dramatically reduce your long-term energy costs while the system powers your home and pays for itself in electricity bill credits. However, not every property is suitable for solar panel installation, and economic net energy metering programs are not available in every utility service area.
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