Solar Panel Cost

The cost of solar panels has dramatically decreased over the past 10 years, about 80% between 2010 and 2017. This means that solar panels for your home costs less than paying your utility bill every month. When you consider the upcoming reduction in the Federal Tax Credit, there has never been a better time to buy solar panels than right now.

Solar Panel Price Per Watt – The Key Term to Know

When beginning your research into how much the cost of solar can be, you’ll see a couple of different terms describing the advertised system cost.

The most important term is solar cost per watt.

Solar price per watt (PPW) is the cost of your solar panel system per each watt of power it provides. The cost of your solar system should be the gross system cost – the price of your solar before any rebates, tax credits, or other incentives. The size of solar arrays are defined in terms of the electrical power unit Watts (read our Solar Starter Guide for more), because that tells you how much solar power this system will produce. Price per watt ($/W) helps you make an apples-to-apples comparison of different solar quotes that may vary in total wattage, solar panel brands, and more. When comparing PPW, make sure your installer is using the gross cost in their calculation.

There are many structural and electrical aspects that determine your home solar system cost, but most cost between $3.00 and $4.00 per watt. For example, a 5 kW solar system would cost between $15,000 and $20,000. This price will change if a project needs special adders to make the project feasible, like mounting it on the ground instead of the rooftop, for instance. As a general rule of thumb, be skeptical of any solar quote you receive that’s more than $5.00 per watt.

How much is solar’s price per kilowatt-hour?

A kilowatt-hour is a unit of energy, and measures of how much electricity your system will produce in a specific amount of time. Your utility bill will use cost per kilowatt-hour ($/kWh), to charge you for how much electricity you used from the utility. The average price per kilowatt-hour from electric providers in the United States is about 13 cents/kWh.

The cost of solar can also be measured in price per kilowatt-hour. Solar cost per kilowatt-hour is calculated with your solar panel array’s net system cost – what you pay after all incentives are factored in – and the total kilowatt-hour output of the system over its 25 warranted lifetime (although solar arrays last even longer than 30 years!). Unlike utility bills, where every month you “pay as you go,” with solar your energy costs are paid upfront or through loan or lease financing. Be sure to check out our Solar Financing Guide to learn more about how to pay for the cost of going solar. Using price per kilowatt-hour for solar is useful when comparing your solar costs against your current costs with your electrical utility.

The typical price range on’s platform is $0.06 to $0.08 per kilowatt-hour. That’s a great savings Return On Investment compared to $0.13 per kilowatt-hour from your utility!

Summary of Difference Between Solar Price Per Watt and Solar Price Per Kilowatt-hour
Solar Price Per Watt Solar Price Per Kilowatt Hour
GROSS system cost / Total system wattage NET system cost / Total lifetime system production
Useful for comparing solar quotes against one another Useful for comparing solar versus utility bill
Pertains to the POWER of a system Pertains to the PRODUCTION of a system
Typically $3.00-4.00/watt Typically $0.06-0.08/kWh

Total Solar Installation Cost

Solar price per watt and price per kilowatt-hour incorporate the entire cost of your solar. This includes other components besides just the panels themselves.

Here’s what’s included in the cost of solar panels for a house:

  • Solar Panels – The equipment that we all know and love. Produces DC power.
  • Solar Inverter – A box that converts DC electricity from the solar panels to AC that can be used in the home.
  • Home Battery – This optional equipment enables you to store your solar power for later use, such as during a grid outage (Learn more here).
  • Balance Of System (BOS) – All of the other electrical and structural components needed to tie the system together. Electrical components include system disconnectors, charge controllers, utility meters, breaker panels. Structural components include mounting hardware, combiner box, and other miscellaneous components.
  • Soft Costs – Important costs to install the solar array, including: Engineering & design, direct labor & installation, supply management, sales & marketing, contractor profit margin.

What’s the cost of solar panels by themselves?

On average, solar panels account for only 12.6% of a residential solar array, or roughly $0.31 per watt. The cost of one solar panel, if it were 300 watts, would cost around $93.

Here’s the Cost of a Solar Array Broken Down by Component:

Cost of Solar Panels

Source: U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017, NREL

How to Get Solar Panels for the Best Price

Obtaining Solar Prices Directly from the Market:

Homeowners can directly contact solar installers in their area to receive quotes from them. This process requires time and effort, and can risk installer salespeople adding in project commissions to the system cost.

Obtaining Solar Prices Using’s Platform: has collected solar cost data from 12 states since 2016, culminating in the following price comparison graphs from the NREL report. This shows the average cost to install solar panels in California, Florida, and other states, and compares our platform versus obtaining the quotes at market directly from installers.

On average, the cost to go solar is $4.21 per watt if you obtain quotes on your own. Through, the average solar cost is $3.80 per watt.

Average Cost of Solar Panels

Average prices found through the platform have been lower than market prices in a majority of the states according to data procured from the National Renewable Energy Laboratory.

Cost of Solar by State

Here’s a precise breakdown of the cost to go solar:

Average Cost of Going Solar Per State, Market Versus
State Market Price Per Watt Price Per Watt
Arizona $3.61/W $3.39/W
California $4.31/W $3.76/W
Connecticut $3.65/W $3.68/W
Florida $3.45/W $2.82/W
Massachusetts $4.18/W $3.92/W
Maryland $3.93/W $3.64/W
Minnesota $4.61/W $3.66/W
New Hampshire $3.72/W $3.37/W
New Mexico $4.82/W $3.56/W
Oregon $3.79/W $3.68/W
Texas $3.83/W $3.17/W
Wisconsin $3.29/W $3.83/W

The Price of Solar Panels Over Time


French scientist, Edmond Becquerel discovered the photovoltaic effect and how to capture electrical energy from sunlight.


Bell Labs announced the invention of a silicon solar cell that produces electricity at 6% efficiency. Silicon is much cheaper and more efficient than selenium, which had been used for years.


Hoffman Electronics’ Semiconductor Division released a commercial solar product that produced energy at 2% efficiency (most panels today have 15-18%). The price was $25 per cell with a peak power of 14 milliwatt (one thousandth of a watt), which is enough to power a laser pointer. In today’s dollars, the cost of the energy produced using this technology would be $16,784.73 per Watt!


The U.S. Department of Energy launched the Solar Energy Research Institute, now known as the National Renewable Energy Laboratory. Due to rising prices of gas due to the Oil Embargo of 1973, The United States wanted to explore non-petroleum energy options. Scientists and engineers from all different fields came together to develop a full understanding of photovoltaic technology to support and advance a budding solar industry.

The world’s production of photovoltaic modules now exceeded 500 kW. The cost of a solar cell was about $330.28 per watt, in today’s dollars.


In 1978, as a part of the National Energy Act, U.S. Congress released the Energy Tax Act. This act gave a income tax credit to private residents who used alternate forms of energy, including solar, geothermal, and wind. The tax credit was 30% of the first $2000 invested in renewable energy, and 20% of the next $8000.


Global photovoltaic production exceeded 21.3 MW, enough to power around 3,000 homes. Solar technology and deployments continued to incrementally improve over the next several decades.


In 2011, the Department of Energy launched the SunShot initiative, which aimed to reduce solar system costs by 75% in order to incorporate solar energy at a large scale.

The SunShot initiative focused on four main cost areas:

  1. Technologies for solar cells and arrays that convert sunlight to energy
  2. Electronics that optimize the performance of the installation
  3. Improvements in the efficiency of solar manufacturing processes
  4. Installation, design and permitting for solar energy systems.


The Department of Energy met their goal in September 2017, three years ahead of schedule. The Department of Energy is continuing their solar cost reduction goals by investigating and improving photovoltaic technology, soft cost reduction techniques, and innovative business models to bring new technology to market. Fully installed residential solar arrays now cost between around $3.00 and $4.00 per watt.


In efforts to fortify U.S. solar panel manufacturing, a 30% tariff on foreign solar modules and solar cells was introduced by President Trump. The tariff declines 5% annually for 4 years and excludes the first 2.5 Gigawatts of imports each year. Leading up to this tariff announcement, the volume of solar installations and generations in the United States had increased dramatically. The United States imports about 80% of our solar materials and modules from abroad.

Due to our heavy reliance on foreign solar, the tariff was estimated to increase solar panel cost per watt by 10-12 cents. Solar installation costs increased for the first time in years after the tariff was announced. Companies like Panasonic, Hanwha Q, and Jinko Solar had initiated plans to open manufacturing sites in the United States. Based on the timeline that is required to build and begin production at manufacturing plants in the United States, the U.S. will continue to import 80-90% of our solar from abroad and sell at a higher price.


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