Discover the Cost of Solar Panels in the US: A Comprehensive Guide
As of 2023, the installed cost of solar panel systems ranges between $14,000 and $40,000 for the low-priced and high-priced tiers. However, the actual cost of solar panels varies in different locations across the U.S. due to several price-determining factors.
Note: Federal solar tax credits and other rebates and incentives help lower the installed costs of solar panels.
For instance, the average cost of a 5 kW solar panel system in Florida ranges from $10,500 - $13,900 (without federal tax credit), while Californians pay $12,000 - $15,000 with similar incentives. Florida's $2.55 per kW of solar power is lower than the $2.73 paid by Californians.
Average Cost of a 5 kW Solar Panel System in Some U.S. States Without Federal Solar Tax Credit
|Arizona||$10,200 - $13,000|
|California||$12,000 - $15,000|
|Colorado||$14,000 - $17,300|
|Florida||$10,500 - $13,900|
|Maryland||$12,500 - $16,700|
|Massachusetts||$13,500 - $17,600|
|New Jersey||$12,000 - $16,000|
|New York||$13,400 - $18,200|
|Texas||$11,200 - $15,300|
|Washington||$11,400 - $15,000|
As of 2023, the U.S. federal solar tax credit is 30% of the gross installed cost of the solar panels' system for eligible homeowners and businesses.
This means that for a solar system with a gross installed cost of $15,000, a homeowner gets to pay $11,500 ($15,000 - (0.3 x $15,000)) after receiving a solar tax credit.
The 30% rate is available for property owners who install solar systems between 2022 and 2033.
Cost of Installing a 6kw System
As of March 2023, the average costs of installing 6 kW and 10 kW solar energy systems in the United States are about $12,000 and $21,000 with federal solar tax credit.
Average Cost of Solar Panels for a 6kW Solar System by State
|State||Average cost per watt ($/W)||Cost of a 6kW system||Cost after 30% federal solar tax credit|
Note: Before you install a solar panels system on your property, you need to:
Average cost of Solar Panels for a 10kW Energy System by State
|State||Average cost per watt ($/W)||Cost of a 10 kW system average||Cost of 10 kW after 30% federal solar tax credit|
There are two ways you can calculate your solar panel cost. Solar panel cost can be calculated as price per watt($W) or cost per kilowatt-hour (also known as the levelized cost of energy (LCOE)).
Price Per Watt (PPW)
The price per watt method is a straightforward calculation whereby the gross installed cost of the solar panels is divided by the solar panels' system wattage in direct current (DC).
Price Per Watt (PPW) = Gross System Cost / System Size in DC.
The system size is calculated as the product of the solar panel wattage multiplied by the number of installed panels (System size = Panel DC Watt x Number of Panels).
For instance, if the gross cost of installing twelve 250-watt solar panels in California is $34,400 (total cost without solar tax credit or rebates). Using the price per watt method, the solar panel cost is:
PPW = $5.73 per watt ($34,400 / (250 x 12))
Cost Per Kilowatt-hour (LCOE)
The cost per kilowatt-hour method (also known as the levelized cost of energy method (LCOE)) calculates the average cost of energy a solar system produces over its lifetime. It calculates the amount you pay for each unit of electricity delivered to the home.
LCOE shows the advantage of solar energy systems over electricity from the electric utility grid by comparing the average cost of a kilowatt-hour of solar energy to that of the electric utility.
To get an estimate of your solar panel cost using the LCOE method, you must have an idea of:
The net installed cost of your system (this is the cost after deductions of federal solar tax credit, rebates, and other incentives).
The amount of sunlight the solar panel daily (you can the annual daily sunlight average for the area).
Your solar panel system efficiency - This may depend on the tilt angle and orientation in addition to the quality of the solar panels and the efficiency of the inverter..
The annual rate of degradation of your solar panel system - The efficiency of the solar panels decreases as they age. To calculate the rate of degradation, you will need a spreadsheet program.
For illustration, consider an installation in Tucson, Arizona, a city that receives a daily average 5.75 kWh of sunlight.
The cost of solar energy produced over 20 years for a 10 kW solar system with a net cost of $17,080 using the LCOE method is calculated as
Solar Energy Produced = 321,200 kWh (10 kW x 5.75 kWh of daily sunlight x 365 days x 20 years x 80% efficiency)
LCOE = $17,080/ 321,200 kWh = 5 ¢/kWh
Note: in this example, we assume the solar panels to be at 80% efficiency.
The cost per kilowatt method is useful when comparing the cost of electricity of two different providers side-by-side. In addition, it can be used to compare the cost of utility grid electricity to the solar energy alternative.
The number of solar panels you need depends on your:
On average, a 2,000-square-foot home consumes 1,000 kWh of electricity monthly or 32 kWh daily. Using 400 watts solar panels will produce between 1.2 and 3 kWh of energy daily depending on the hours of peak sunlight (the median value is 2 kWh).
Hence, you will need between 16 and 27 solar panels for a 2,000-square-foot home using an average of 2 kWh per day of solar energy.
Solar panels for residential properties have a wattage range between 250 to 400 watts.
To estimate the number of solar panels you need for residential energy use, divide your daily consumption by the daily power production for one solar panel (you can use the average value of 2 kWh daily).
Typically, the number of solar panels you need to run a home depends on the type of appliances you have and their energy consumption ratings. On average, a 1,500-square -foot home consumes about 11,700 kWh of energy annually (about 975 kWh monthly).
To meet your need, you may need 16 to 27 highly efficient solar panels with a 400-watt rating. For budget solar panels with lower wattage (for instance, 250 watts solar panels), you will need between 25 and 38 solar panels to run a 1,500-square-foot home.
The number of solar panels you need varies across the states of the U.S. Areas within the southern United States may require fewer solar panels than the northern parts due to the higher amount of sunshine in the south.
To get an accurate figure for your home energy consumption, you may need to engage the services of a professional solar installer for analysis. A professional installer will estimate the number of panels producing enough energy to meet your needs.
A 1,000-square-foot home consumes about 8,500 kWh of energy annually, this translates to a monthly average of 708 kWh. The number of solar panels needed to produce this amount of electricity depends on:
On average, the U.S. experiences 4 hours of peak sunshine daily. Using highly-efficient high quality 400-watt solar panels, a 1,000-square-foot home will require at least 16 solar panels to run effectively.
Most solar panel producers offer a 25-year warranty on their products. After this time elapses, there is a noticeable decrease in energy output.
Electricity power generation declines due to light-induced degradation (LID). Light-Induced Degradation results from the exposure of solar panels to direct sunlight during installation.
Exposure of solar panels to direct sunlight causes a small amount of heat build-up that causes the cells to buckle and break down. There may not be any need to replace solar panels on residential properties after 25 years because they may continue to produce electricity, though at a less efficient rate.
Do-it-yourself (DIY) solar panels materials or kits are tools to assemble solar panels independently without help. You can set up a solar panel system by following the easy-to-follow step-by-step instructions outlined in the installation manual.
To install solar panels system, you need the following tools:
Before you install a solar panels system on your property, you need to:
Note: to prevent accidents, electrocution, and fire outbreaks, the U.S. Office of Energy Efficiency and Renewable Energy recommends you engage the services of a professional solar system installer.
How much you pay for Tesla solar panels depends on your location and the size of the energy system. A 7.2 kW solar system from Tesla will cost about $14,000 to $17,000.
However, the price comes between $11,200 and $11,900 with solar tax credits. The average cost of Tesla solar panels per watt of energy ranges between $2.00 to $2.75 per watt of solar energy. This figure is lower than the national average solar panel cost of $3.00 per watt.
The Tesla Powerwall home battery brand is a popular pick in the U.S. market. As of March 2023, the Powerwall cost between $9,100 and $14,300 without incentives and solar tax credit.
Tesla offers discounts if you purchase more units. For instance, you may get a 9.3% discount for buying three Powerwall batteries and pay $31,288 instead of $34,500.
You may also get discounts if you buy three or more Powerwall. The table below illustrates how Powerwall net cost drops with quantity. Note that an individual is limited to not more than ten battery purchases.
|The number of Powerwall||Cost per unit||Total Cost After Discount|
Depending on the location within the United States. A 10 kW Tesla solar panel system consisting of 24 panels capable of producing between 38 to 48 kWh of energy daily may cost between $19,500 and $24,500.
However, this is without Powerwall home batteries which may raise the cost to over $40,000. If you are eligible, some of the incentives that can help lower the cost of your Tesla solar panels include:
Several factors impact the amount you pay for solar panels in the United States. To install solar panels on a property, it is important to have a calculated estimate of the capital outlay to ensure it fits with the budget.
The installed costs of solar panels across the states are influenced by but are not limited to the following:
Energy consumption - Home with more non-electricity dependent appliances consumes less electricity and may not need the more costly larger solar panels. For instance, gas appliances do not run on electricity.
The size of the panels and quality - Solar panels with large surface areas produce more electricity than smaller ones of the same quality. Hence, they cost more to install.
The purchasing option - There may be different payment options available to individuals to install solar systems on their properties but some may come with a discount or interest. Solar panel companies may offer discounts for lump-sum payments, while structured payments may cost more. Also, solar panels installation through loan financing attracts interest on the loans.
The type of solar panels - The type and quality of solar panels vary. Solar panels types include:
Monocrystalline and thin-film solar panels are more expensive than polycrystalline types because of their appearance, how they are made, and better performance.
The type of roof - Several types of roofs may require different skill levels and components to install. For instance, to install on shingle roofs, you need first attach a flashing piece for the racks that will hold the solar panels. In comparison, the racks are connected directly on ribbed or standing seam metal roofs. Attaching flashing pieces to shingle roofs increases the installed cost of solar panels.
Labor - The price of labor for installation affects the installed cost for solar panels. Individuals residing in areas having a higher cost of living may pay more for labor and solar system installation.
Permits from the local authorities and interconnecting fees for connection to the electricity power grid add to the cost of solar system installation
Tax incentives - Eligibility for federal solar tax credits and other rebates and incentives lower the installed costs of solar panels.