See how much solar panels cost in your area
Please enter a valid zipcode.
Zero Upfront Cost
Best Price Guaranteed
Solar Learning Center > Solar Panel Cost
Solar Panel Cost
The cost of solar panels has declined dramatically over the last decade, and solar systems now offer more value to homeowners than they ever have before. That said, solar panels are only one component of a complete solar system, so there are other solar installation costs to consider as well. In this article, we’ll take a look at why solar panel cost has fallen so dramatically, the key terms for evaluating the cost of solar systems, and the many factors that will ultimately impact the price you pay for your solar system.
The Cost of Solar Panels Over Time
The cost of solar panels has declined substantially over the last decade as the industry has matured and reached production at the largest global scale. Since 2010, solar panel prices have fallen by roughly 90% while global solar deployment has grown by over 400%, and this incredible growth rate along the entire global solar supply chain has dramatically reduced prices.
(Source: https://www.greentechmedia.com/articles/read/solar-pv-has-become-cheaper-and-better-in-the-2010s-now-what)
Just like computers, big-screen TVs, and cell phones, the economies of scale that solar panels now enjoy have produced a dramatic cost curve that has fundamentally changed the energy industry. Utility-scale solar installations are now cheaper than all other forms of power generation in many parts of the world and will continue to replace older, dirtier power plants run on coal and natural gas. Additionally, homeowners are now able to own their power production more cost-effectively than ever before. There has never been a better time to install solar!
The Key Terms for Considering the Cost of Solar
To begin with, let’s define a couple of key terms that are commonly used in the solar industry to communicate the relative value of solar panels and the energy they produce.
Solar Panel Price Per Watt
The price per watt (PPW) of a solar system is the price that the homeowner will pay for every watt of solar being installed. Calculating the price per watt for a solar system is very straightforward – it’s simply the gross system cost (contract value) divided by the number of watts in the system.
This figure allows homeowners to directly compare the relative value of various solar offers. Price per watt ($/W) allows for an apples-to-apples comparison of different solar quotes that may vary in total wattage, solar panel brands, etc.
Ultimately there are many factors that figure into the price per watt of a solar system, but the average cost is typically as low as $2.75 per watt. This price will vary if a project requires special adders like ground-mounting, a main panel upgrade, EV charger, etc.
Solar Panel Price Per Kilowatt-Hour
Another measure of the relative value of a solar system is its price per kWh. Whereas the price per watt considers the solar system’s size, the price per kWh shows the price of the solar system per unit of energy it produces.
A kilowatt-hour is a unit of energy and is equivalent to consuming 1,000 watts – or 1 kilowatt – of power over one hour. You can think of watts and kilowatt-hours as speed versus distance – your instantaneous rate of power consumption is measured in watts (speed), while the total volume of power consumed over a period is measured in kilowatt-hours (distance). The kilowatt-hour is the basis for evaluating the energy costs from both the electric utility and solar.
While price per watt is most helpful comparing the relative costs of solar bids, price per kilowatt-hour is mostly used to illustrate the value of solar relative to the base case of continuing to buy your power from the electric utility. While electric bills are subject to continuously increasing rates, purchasing a solar system can be thought of as pre-paying for 25-years of power at a locked-in price, protecting you from decades of rate increases. The average price per kilowatt-hour from electric providers in the United States is about 13 cents/kWh (and always increasing), the typical price range on Solar.com’s platform is 6-8 cents!
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 |
Solar Panel Installation Cost
It’s important to understand that solar systems involve a lot more than just the solar panels themselves. The panels are only one component of the overall solar system, and these other components actually form the majority of the cost of the project. Even the most basic solar system includes multiple important components, including the panels, an inverter, a mounting/racking system, conduits, and electrical hookups. Some systems can also require upgrades like roofing improvements and upgrades to the home’s main electrical panel.
Source: U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017, NREL
As long as they’re undertaking the work to install a solar system, homeowners today often choose to incorporate additional upgrades along with the solar system. For example, solar batteries are an increasingly popular option for homeowners seeking resiliency against grid outages, and installing a home battery requires additional components like the battery, backup gateway, and critical loads panel. Another popular upgrade is installing an electric vehicle charger to accommodate for a future EV purchase.
In addition to these physical components, solar installations also involve significant soft costs like labor, engineering & design, permits, interconnection applications, and sales & marketing.
While it may seem surprising that the actual solar panels aren’t a greater share of the total project cost, it’s important to understand that these other components are critical to a well-functioning, high-quality solar system.
Incentives
Incentives for solar and batteries are also important components of the overall cost of a solar system. The most widely available incentive is the federal tax credit, currently set at 26%. There are other important incentives as well depending on location, such as New York’s 25% state tax credit and California’s SGIP program for solar batteries.
Be sure to consult a professional energy advisor to make sure you understand the full costs and available incentives for your solar system. Between the current incentives available for solar and the price reductions for panels over the last 10 years, there’s never been a better time to go solar!
The Solar.com Advantage
Now that we understand how to evaluate the relative cost of solar systems and the factors that contribute to overall installation costs, let’s consider the big question: how much do solar panels cost to install on your home?
The short answer is that it depends. Solar system costs vary widely depending on many factors like the amount of energy needed, the amount of roof space available, the kinds of panels and inverters being used, and whether a battery is included with the solar system. The average cost for a solar system is around $20-30,000 (before incentives), but the system size is proportional to the amount of power needed. Especially in places like California and New York, system payments are typically lower than the electric bill the homeowner is paying for anyway!
With an investment of this size, homeowners typically have two primary concerns:
- That they have great pricing for the system they’re having installed, and
- That the great pricing they get doesn’t come at the expense of high-quality workmanship and a fantastic customer experience
Fortunately solar.com was founded to address these concerns and ensure a positive experience throughout.
As a virtual platform, solar.com has been structured from the very beginning to have the lowest costs in the industry. Most companies rely on expensive marketing campaigns and in-home salespeople to sign up homeowners, which leads to an extremely high cost of acquisition for every system they install. By operating virtually, solar.com saves installers on those costs, and those savings are passed along to you!
Here is a direct comparison between average market pricing and solar.com’s average pricing in some of the largest solar markets in the country, according to data from the National Renewable Energy Laboratory:
State | Market Price Per Watt | Solar.com Price Per Watt |
Arizona | $3.61/W | $3.39/W |
California | $4.31/W | $3.76/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 |
That said, fantastic pricing isn’t enough. Homeowners also need to feel confident that they’ll have the highest-quality workmanship on their home and have a smooth installation process. To that end, solar.com employs a rigorous vetting process to ensure that only the best solar installers have access to our platform and customers. Homeowners who use our platform also have a dedicated Customer Success Representative who will advocate to the installer on their behalf to make sure their system is installed as quickly and seamlessly as possible.
Conclusion
Solar panel costs have fallen dramatically over the last decade and made solar systems more accessible to homeowners than ever before. Knowing the key terms for evaluating solar system costs and the primary components of solar systems helps to understand the most important considerations that factor into the cost of solar systems. While it might seem like a lot to consider, our Energy Advisors are ready to guide you through the process and connect you with bids from fantastic installers at industry-leading prices!
Related Articles
Understanding the NEM 3.0 Proposal and Impacts for California Homeowners
California utilities have proposed Net Energy Metering (NEM) 3.0, which if approved, would significantly alter the utility bill structure, rates, and charges for homeowners going...
SmartFlower Solar Review: The True Cost of a Solar Flower
SmartFlower Solar produces unique, ground-mounted solar panel systems that include a sun tracker and a number of other high-tech features. This ‘smart’ solar panel system...
How to Find High Quality Solar Quotes in 2021
As the summer heat starts taking its toll, the idea of installing a home solar panel system starts to make more sense for many homeowners....
How Much Can I Save by Switching to Solar in 2021?
As solar goes mainstream and the price continues to drop, there is a good chance that you have already thought about switching to solar. There...
BREAKING: Will PG&E's Bankruptcy Affect Going Solar?
After weeks of speculation, Pacific Gas & Electric, the largest utility in the Golden State, has announced plans to file Chapter 11 bankruptcy protection in...
Department of Energy Study Proves Customers Save with Solar.com
The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) just released a report that found that solar customers can achieve lower system prices by using online...
Solar Panels and Homeowners Insurance - What's Covered?
Going solar is one of the best ways you can personally combat climate change and make a positive impact. But with climate change comes more...
Renewable Energy May Soon be Cheaper Than Existing Fossil Fuel Plants
While 2018’s solar tariffs have increased the prices of some international modules, the solar industry continues to rapidly expand. The price of solar has decreased...
Can a Golf Ball Damage My Solar Panels?
In California and many of the other states where solar is prevalent, there is no shortage of golf courses and homes that surround them....
How to Get Fast Quotes on Solar for Your Home
The process of transitioning to a solar-powered home can be overwhelming for some. From identifying the right solar panel hardware to ensuring that you are taking...
Solar Panel Cleaning: Best Practices and Simple Guide
Dirty panels? There are some instances where solar panels might need cleaning, but most of the evidence says solar panels are self-sufficient and low-maintenance. We’ll...
How the 2018 Solar Tariffs Will Affect Prices
If you’re considering solar, you might be wondering how the recently mandated solar tariffs could affect the price of solar. Will it nudge the needle...
How Multiple Solar Quotes Saves Money
Mama said shop around, and NREL agrees. In a recent study, the National Renewable Energy Laboratory (NREL) found that people interested in switching to solar...
Solar Tariffs Are Here: The Sky Is NOT Falling, but the Sunshine...
The wait is over. Almost one year after the original trade case petition was filed, following months of hearings, negotiations, and a final recommendation from...
Snow Harm Done! Solar in Cold Climates
With the Cyclone Bomb bringing record low temperatures to the East Coast this month, many homeowners have had snow on the mind. Though it might...
Solar Panel Costs: The Full Breakdown for Installing Home Solar
Here’s an exciting number. The cost for residential solar panel systems has dropped a remarkable 61 percent since 2010. That’s according to the National Renewable...
Will the Solar Trade War Impact Home Solar?
The solar industry waits with breath abated. If approved by President Trump, the effects of the potential tariffs recommended by the United States ITC (International...
Are Solar Panels Worth It? Calculating Solar ROI
Over the past decade, solar panels have risen in popularity at an increasing rate. Odds are, if you drive through any suburban town, you’d see...
With Potential Solar Prices Increasing, Trump is Accelerating the Adoption of Solar
At a glance: Suniva, a U.S. based solar panel manufacturer, filed a product dumping complaint with the International Trade Commission in April 2017. Suniva has...
Why You Need To Know Your PPW When You Go Solar
Before even speaking with a solar company there are a few things you need to know in order to ask the right solar questions. Understanding...
The Economics of Cleaning Solar Panels
What is soiling loss? Soiling loss is the term given to all energy production loss in a solar system that is attributed to the panels...
How Long Do Solar Panels Last?
In 2017, solar panels are now thinner, sleeker, durable, and made to last decades. Your new solar panel energy system will continue to produce...
Will I Save Money When I Go Solar?
Yes, you will not only save money by going solar, but you will become the owner of independent and clean energy. By investing in...
To Wash or Not to Wash?
The economics of solar panel cleaning We all know what a fresh cleaning does for windows. The world outside suddenly seems brighter, more vibrant, because...
The Falling Price of Solar Power
In 1977, a solar panel system cost $76.77 a watt. Imagine that you want to install an average, 2,000-watt system for your home. If...
What You Need to Know about Net Metering 2.0
Traditionally, California has been one of the states with friendliest policies towards solar power. Numerous programs are in place which helps reduce the cost of...
2015 will see the Lowest Residential Solar Prices of the Decade
Asking a solar installer the right time to buy solar is much like asking a real estate agent when to buy a house. The answer...
What Is Net Energy Metering?
One of the most frequently asked questions for solar homeowners is what net energy metering (NEM) is and how it works. NEM is a credit...
The Real Price of Free Solar
“For now, the noise around solar is tolerable. But if the industry does not police itself better and make sure the search for profit is...
Sell-Out Solar Workshops Highlight Top 5 Insights Before Going Solar
With over 6,100 solar companies, 5 major financing methods, thousands of panel models and dozens of inverter manufacturers, homeowners can’t find straight answers. Solar.com has...
The Advantages of Solar Energy during the Holidays
When it comes to the holidays, few things are quite as iconic as the Christmas Tree. With beautiful lights shining night after night, entire towns...
Get the Solar Energy Facts – What Are You Really Paying For?
The fall heat doesn’t seem to be subsiding, the air conditioner is still clicking on every day and you’ve decided that you’ve waited long...
See how much solar panels cost in your area.
Please enter a valid zipcode.
Please enter a valid zipcode.
Zero Upfront Cost. Best Price Guaranteed.