Average solar panel cost by state
The average cost 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 solar panel 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.
6-kW system*
10-kW system*
Estimated ITC value**
Average cost per watt***
Typical payback period****
Alabama
$14,700
$23,510
$4,410-$7,053
$2.45
10 years
Alaska
$14,430
$23,060
$4,329-$6,918
$2.41
9 years
Arizona
$14,640
$24,400
$4,392-$7,320
$2.44
7 years
Arkansas
$17,100
$28,500
$5,130-$8,550
$2.85
11 years
California
$18,360
$30,600
$5,508-$9,180
$3.06
7 years
Colorado
$20,640
$34,400
$6,192-$10,320
$3.44
11 years
Connecticut
$19,200
$32,000
$5,760-$9,600
$3.20
7 years
Delaware
$17,100
$28,500
$5,130-$8,550
$2.85
10 years
Florida
$15,180
$25,300
$4,554-$7,590
$2.53
8 years
Georgia
$17,700
$29,500
$5,310-$8,850
$2.95
10 years
Hawaii
$16,000
$25,580
$4,798-$7,674
$2.67
6 years
Idaho
$18,060
$30,100
$5,418-$9,030
$3.01
13 years
Illinois
$19,080
$31,800
$5,724-$9,540
$3.18
5 years
Indiana
$21,960
$36,600
$6,588-$10,980
$3.66
12 years
Iowa
$20,940
$34,900
$6,282-$10,470
$3.49
12 years
Kansas
$17,220
$28,700
$5,166-$8,610
$2.87
10 years
Kentucky
$19,140
$31,900
$5,742-$9,570
$3.19
12 years
Louisiana
$18,900
$31,500
$5,670-$9,450
$3.15
9 years
Maine
$21,420
$35,700
$6,426-$10,710
$3.57
9 years
Maryland
$18,060
$30,100
$5,418-$9,030
$3.01
10 years
Massachusetts
$21,180
$35,300
$6,354-$10,590
$3.53
7 years
Michigan
$20,220
$33,700
$6,066-$10,110
$3.37
10 years
Minnesota
$19,740
$32,900
$5,922-$9,870
$3.29
12 years
Mississippi
$15,830
$25,310
$4,750-$7,593
$2.64
12 years
Missouri
$16,920
$28,200
$5,076-$8,460
$2.82
10 years
Montana
$14,540
$23,240
$4,361-$6,972
$2.42
10 years
Nebraska
$16,970
$27,110
$5,090-$8,133
$2.83
12 years
Nevada
$15,420
$25,700
$4,626-$7,710
$2.57
8 years
New Hampshire
$21,900
$36,500
$6,570-$10,950
$3.65
8 years
New Jersey
$18,000
$30,000
$5,400-$9,000
$3.00
7 years
New Mexico
$19,680
$32,800
$5,904-$9,840
$3.28
9 years
New York
$20,100
$33,500
$6,030-$10,050
$3.35
7 years
North Carolina
$16,680
$27,800
$5,004-$8,340
$2.78
12 years
North Dakota
$14,538
$23,240
$4,361-$6,972
$2.42
12 years
Ohio
$16,500
$27,500
$4,950-$8,250
$2.75
10 years
Oklahoma
$15,360
$25,600
$4,608-$7,680
$2.56
9 years
Oregon
$18,300
$30,500
$5,490-$9,150
$3.05
13 years
Pennsylvania
$18,300
$30,500
$5,490-$9,150
$3.05
8 years
Rhode Island
$21,660
$36,100
$6,498-$10,830
$3.61
8 years
South Carolina
$16,800
$28,000
$5,040-$8,400
$2.80
8 years
South Dakota
$14,320
$22,880
$4,296-$6,864
$2.39
11 years
Tennessee
$19,380
$32,300
$5,814-$9,690
$3.23
13 years
Texas
$15,840
$26,400
$4,752-$7,920
$2.64
8 years
Utah
$15,720
$26,200
$4,716-$7,860
$2.62
10 years
Vermont
$19,800
$33,000
$5,940-$9,900
$3.30
10 years
Virginia
$18,240
$30,400
$5,472-$9,120
$3.04
10 years
Washington
$18,300
$30,500
$5,490-$9,150
$3.05
16 years
West Virginia
$17,100
$28,500
$5,130-$8,550
$2.85
11 years
Wisconsin
$20,040
$33,400
$6,012-$10,020
$3.34
11 years
Wyoming
$15,400
$24,590
$4,620-$7,377
$2.57
9 years
* Before the federal tax credit (ITC) and other financial incentives; ** Average ITC value for a 6 kW to 10 kW system; *** Cost per watt may vary by system size; **** How long it takes to break even on solar panel installation costs with cash purchase
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.
» LEARN MORE: The most common solar myths and misconceptions
Other solar panel cost factors to consider
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.
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 in the amount of $429 from NV Energy.&#;
» COMPARE: Solar energy pros and cons
Are solar panels worth it in your state?
- Arizona
- California
- Nevada
- New Hampshire
- New Mexico
- Oklahoma
- Vermont
- West Virginia
How to pay for solar panels
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
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.&#;
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:
GECONA SOLAR Product Page
&#;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?
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
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.
Do you own or rent?
FAQ
Do solar panels increase the value of your home?
Studies show that homes with solar panels sell for more than homes without them, and that increase in value can be significant.
- A study by the Department of Energy&#;s Lawrence Berkeley Laboratory found homes with solar panels sold for an average of around $15,000 more than comparable homes without solar panels.
- A National Bureau of Economic Research study found that solar panels added an average of $20,194 to the sale price of homes in the San Diego and Sacramento areas.
- Zillow found that homes with solar panels sold for an average of 4.1% more than comparable homes without solar panels.
How much value the solar panels add depends on your system's quality, location and other factors.
» EXPERT TIPS: How to save energy at home
How many solar panels do I need?
How many solar panels you need varies based on your energy usage, the efficiency of the panels and other factors.
The average household uses 886 kWh per month in electrical power, according to the Energy Information Administration.
A solar panel typically produces about 1.5 kilowatt-hours (kWh) per day, so if your daily kWh usage is 30, you would need 20 solar panels to generate all of your energy needs.
- Energy usage: To estimate the amount of energy you&#;ll need, you need to know your average kWh. This number should be on your utility bill as &#;kWh used.&#; To get your monthly average, look at bills for the past year, add up the stated kWh used and divide by 12.
- Panel output: Next, you need to find the solar panel output, which is the amount of energy the panel can produce per hour of sunlight it receives.
» WHAT&#;S THE DIFFERENCE? kW vs. kWh
How does net metering work?
Net metering is a system that lets you send the extra power your panels produce back into the power grid (the big network of wires that carries electricity to everyone&#;s houses). In exchange, you get a credit on your electricity bill.
This also means that if your solar panels don&#;t generate enough electricity (like on cloudy days), you can still use electricity from the grid without paying for it because you&#;ve already earned credits through net metering.
A reviewer in Texas explains how it worked for them: &#;When I first signed up, my contract was a net metering, so I paid a certain cost of kilowatt-hours used, and the utility company purchased back from me at that same price. If I generated 200 and consumed 200, my net usage was zero, and my bill was essentially zero. My contract ended and I had to renew it."
They continued: &#;Now, I'm paying 21 cents a kilowatt-hour for usage, and I'm only getting back 10 cents a kilowatt-hour for anything I push back to the grid. There's another $40 a month service fee from the utility company as well. So the incentive isn't quite what it was a year ago. Still, it's a good value.&#;
It&#;s a win-win situation: You save money on your bill, and the power grid gets more renewable energy to distribute to people who need it.
» MORE: Greenest states in the U.S.
How are solar panels installed?
Installing solar panels typically takes only a few days. The technicians install wiring connecting the panels to an inverter, which converts the DC power generated by the panels into AC power for use in your home.
&#;One of the most common misconceptions is that going solar is a complicated process that involves a lot of work and expensive equipment,&#; said Alan Duncan, founder of Solar Panels Network USA. &#;In reality, the process of buying and installing solar panels is relatively straightforward, and many companies offer turnkey solutions that take care of everything from the design to the installation of the system.&#;
Once the solar installation is complete, an inspector checks the system to ensure it meets local safety and building codes. The system is then connected to your utility's power grid. If you&#;re not grid-connected, you&#;ll need to get a battery to store solar energy.
Once that&#;s done, your solar panel system is activated and ready to generate electricity. You can monitor the system's performance and energy production using a monitoring system provided by the installer.
Are solar panels worth it?
After solar 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 chargers and passive solar home design.
» NEXT: 7 steps to going solar
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