The national average cost to install solar panels on a residential house is between roughly $15,000 and $25,000. That average cost encompasses a number of factors — from the amount of solar energy you need the solar panels to generate to the slope of your south-facing roof, which is where solar panels are typically mounted. These reflective, flat solar panels use energy from the sun to power your home.
Depending on your location, your installer can connect your solar power set-up to the existing electric grid (this is called "grid-tied") or install them off the grid, letting you (and only you!) use the power you make. If your home receives enough sunlight, solar panels combined with a generator or battery backup could let you eliminate electricity bills entirely while you help save the earth.
Installing a solar power system can save you tons of money in the long run, despite the large upfront system cost. The average payback period for solar power — or how long it takes before you've saved more than you spent — is about 7.4 years, according to Energysage.
What's included in this cost guide?
While installing solar panels can be a big, complicated job, there are four primary factors that affect the solar installation system cost: the cost of the raw materials for the solar panels, the system size, the labor expense and whether you elect for any financing.
Here's how those costs break down.
An average-sized home will use several 60-cell solar panels, which measure about 3.5 feet by 5.5 feet and provide between 250 and 375 watts of power. Typically, the solar panels cost between $0.30 and $1.30 per watt, without installation costs — so $75 to $490 for each solar panel.
Because solar panels are priced in dollars-per-watt, you'll first want to determine how many watts you need to figure out how many solar panels you'll need to buy. A watt is a unit of energy generated by the cells inside the solar panel. The number of watts produced will vary during the day: at noon, with the sun shining directly on the panel, you'll get full power. When the sun is lower, you'll have less power.
Your solar professional will calculate how much energy you need based on last year's energy consumption and then determine an appropriate system size. An average two-person home uses about 10,000 kilowatt-hours (kWh) per year, says Clay Mauldin of Clayco Electric and Solar. That number varies depending on the age of your home, your energy habits, and your location. Are you boiling in the desert of Arizona? You'll likely need more energy to power your air conditioning — and thus more solar panels.
You also may be interested in using flexible thin-film solar panels, which are typically used in commercial set-ups. These über-efficient solar panels cost between $0.50 and $1 per watt, but installation may be more expensive, especially as it might be difficult to find an experienced residential pro.
As an example, Clayco Electric and Solar recently installed an 8.2 kW solar panel system consisting of 28 295-watt panels on the roof of a 3,000-square-foot house. This provided 8,200 kWh of solar power per year — the vast majority of the home's energy.
At some point, you may be faced with a decision: to save some money and buy "cheaper" solar panels, or spend a little more for the higher-quality solar panels. In the short term, it may be tempting to save some cash and opt for the less expensive option. However, the quality of solar technology matters a lot. If you decide to settle for a conventional home solar energy system that costs less upfront, you may only see average (or below average) results and it may save you less money over time.
If you decide to invest a bit more money upfront in higher quality panels and materials, you'll see a higher return on your investment in the long run. Also, more expensive panels may also be more efficient – which means you'll need fewer panels for the same amount of energy output.
Ultimately, the choice is yours. The efficiency and durability of higher quality panels may pay for itself by providing increased savings over time and lower maintenance costs.
The cost to hire a solar installer will make up about half of your solar installation costs. Alone, solar panels cost just $0.30 to $1.30 per watt, but the average cost of installation runs between $2.50 and $3 per watt. (However, that's the total cost for both installation and the price of the panels!)
Typically, pros will want to install panels on a south-facing roof, but steep slopes or a lack of southern sun can make that impossible. In those situations, ground mounting can allow you the benefits of solar energy without sacrificing roof space.
Here are the national average prices for each installation method:
- Roof installation: $2.50–$2.75 per watt
- Ground mount installation: $2.75–$3 per watt
Other factors that affect the cost of installing a solar energy system include:
- Whether your state or local government provides tax incentives, net metering, or other credits
- The cost of solar panels in your area, which does tend to vary by state or zip code
- The shape and size of your roof
- How much energy your household uses
- The quality of the solar panel technology
- How you decide to finance your solar power system
Yes, a single solar panel likely won't break the bank. However, a solar panel doesn't act on its own – it requires a system of hardware and software to generate electricity from the sun. Once you get a cost estimate from a solar company, you'll have a better understanding of how going solar will impact your finances.
While leasing or financing your solar panels is an extremely popular (and low-cost) option, many pros advise against going this route. "Avoid doing a lease," says Mauldin. Over time, you'll end up paying significantly more for your solar energy system, but you won't actually own anything. It also makes selling the house more complicated: Your new buyers will need to take over the solar lease.
Be wary of financing, too. Make sure to research your lender and review the financing plan with a fine-toothed comb. Consider credit unions and local lenders, and be sure to ask if they'll put a lien on your home. That can make refinancing hard.
A good way to save money on solar installation, however, is to check for any applicable solar panel incentives — like the federal government's investment tax credit, which qualifies you for a tax credit of 30 percent of your system's cost, excluding any rebates.
Speaking of rebates: Many local governments offer rebates for installing a solar panel system. This can reduce your expenses by between 10 and 20 percent, so make sure to ask around. Your solar energy installer will likely know of any local incentives you should use to reduce the total solar panels cost.
Bottom line – solar energy is an excellent option for those who are looking to save on their electric bills and decrease their carbon footprint. Higher quality panels may cost more in the upfront, but will most likely save you a good chunk of change in the long term.
While leasing or financing a solar power system may seem like a good option, pros often advise against it. Be sure to do your research prior to making a decision, or it could end up costing you thousands. A quality solar energy system should save you money in the long run and should end up paying for itself twice and three times over.
To get a better understanding of how much a solar energy system costs, be sure to contact a Thumbtack pro in your zip code. A pro will be able to provide an accurate quote and have you on your way to total solar power in no time.