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Cost of solar
The cost of a solar panel installation depends on many factors, including your installation company, the quality of equipment you install, your location, the system design, the size of the system, and more. The best way to find out how much it would cost to put solar panels on your property–and whether that’s a fair price–is to compare custom quotes on our Marketplace.
Average cost of solar
In 2022:
- The average solar panel system costs range from $17,538 to $23,457 after taking into account the federal solar tax credit.
- The average price per watt ($/W) is $2.77.
- From a payback period prospective, solar shoppers recoup their investment at around 8.7 years on average.
See how the average cost of solar varies by state and system size
Solar costs terminology
Net cost, upfront cost, gross cost – what’s the difference?
Gross cost
Also known as “total cost”, your gross cost is the price of your system before any applicable incentives.
Upfront cost
This is the total cost of your system, minus any upfront incentives (e.g. rebates).
Upfront cost = Gross cost - upfront incentives
Net cost
This is the total cost of your system, minus both upfront incentives and tax credits. Tax credits are accounted for here–not in the upfront cost–since you can only claim the federal investment tax credit and other local tax incentives when you file for your taxes. In some cases, this will be months after your solar panel system is up and running!
Net cost = Gross cost - upfront incentives - tax incentives
Price per watt ($/W)
This is how much your solar panel system costs per watt of power.
Price per watt = Gross cost / system size in Watts
Learn more about $/W and why it’s important
Payback period
Solar payback periods estimate how long it will take for you to “break even” on your solar energy investment.
Payback period = Net cost (gross costs - upfront incentives - tax incentives) / annual benefits (avoided annual electricity costs + annual incentives)
More on calculating your solar payback period
Common questions
How much does a single solar panel cost?
A single solar panel can cost between $200 to $250 depending on factors such as quality, whether it has monocrystalline or polycrystalline cells, power output, and efficiency rating.
Why does the cost of solar vary so much from state to state?
There’s a lot wrapped up in the cost of solar, including labor costs, permitting, and other soft costs. In some areas, those costs add up more than in others.
How much of my solar costs are equipment or labor?
According to the National Renewable Energy Laboratory (NREL), hard costs make up about 44% of total system costs once you account for added costs due to the supply chain. Soft costs, on the other hand, make up the majority of solar panel system costs (~56%).
Hard costs
- Solar panels: 12%
- Inverters: 10%
- Racking and mounting equipment: 3%
- Wiring: 9%
- Supply chain: 9%
Soft costs
- Labor: 7%
- Permitting and interconnection: 8%
- Sales and marketing: 18%
- Overhead: 11%
- Profit: 11%
Learn more about the soft and hard costs of solar
Can I go solar with no money down?
Yes! There are plenty of $0-down financing options available to help you go solar.