Solar Panel Cost: Price, Savings, and How to Finance
Last edited
Author
Andrew Blok
Electrification and Solar Writer and Editor
Editor
Andrew Giermak
Solar and Electrification Writer and Editor
Home solar panels can save homeowners tens of thousands of dollars over their lifetimes, but they still need to be paid for. How much will you need to pay if you want to tap into those savings?
That answer depends on a range of factors — how many solar panels you need, whether you’re attaching a battery to your system, the local cost of labor and permitting, even the complexity of your roof. It’ll also depend on whether you purchase your solar panels or lease them. While there’s no one answer to how much solar panels cost, here’s what you need to know.
See how much you can save by going solar with Palmetto
How much do solar panels cost?
How much you pay for solar panels depends on a lot of factors. It’s why getting a quote is the best way to find out what solar will cost at your home.
Still we can get an idea of what solar costs by state using data from real Palmetto installations.
| State | System size (kW) | Avg. cost | Avg. price per watt |
|---|---|---|---|
| Arizona | 8.50 | $23,173 | $2.73 |
| California | 6.72 | $19,414 | $2.89 |
| Colorado | 6.40 | $19,117 | $2.99 |
| Connecticut | 9.43 | $27,968 | $2.97 |
| Florida | 10.13 | $27,332 | $2.70 |
| Georgia | 8.93 | $24,814 | $2.78 |
| Illinois | 9.84 | $28,095 | $2.86 |
| Maine | 8.50 | $27,148 | $3.19 |
| Maryland | 9.32 | $26,731 | $2.87 |
| Massachusetts | 8.54 | $23,715 | $2.78 |
| Michigan | 6.38 | $20,340 | $3.19 |
| New Hampshire | 8.18 | $25,807 | $3.15 |
| New Jersey | 9.78 | $27,938 | $2.86 |
| New Mexico | 5.95 | $16,951 | $2.85 |
| New York | 8.50 | $20,448 | $2.41 |
| North Carolina | 8.19 | $22,970 | $2.80 |
| Ohio | 8.19 | $23,379 | $2.85 |
| Pennsylvania | 7.79 | $21,996 | $2.82 |
| Rhode Island | 7.29 | $23,641 | $3.24 |
| South Carolina | 7.29 | $17,211 | $2.36 |
| Texas | 9.72 | $27,296 | $2.81 |
| Vermont | 8.51 | $25,475 | $2.99 |
| Virginia | 9.72 | $26,810 | $2.76 |
| Wisconsin | 8.51 | $25,475 | $2.99 |
How much do solar panels save?
A more important question than “how much do solar panels cost?” may be “how much do solar panels save?”
Here’s how estimated savings break down for recent Palmetto customers by state.
| State | System size (kW) | Avg. monthly savings | Avg. 25-year savings |
|---|---|---|---|
| Arizona | 8.50 | $149 | $65,463 |
| California | 6.72 | $240 | $105,292 |
| Colorado | 6.40 | $128 | $56,197 |
| Connecticut | 9.43 | $288 | $126,141 |
| Florida | 10.13 | $184 | $80,925 |
| Georgia | 8.93 | $103 | $45,416 |
| Illinois | 9.84 | $136 | $59,764 |
| Maine | 8.50 | $223 | $97,675 |
| Maryland | 9.32 | $193 | $84,633 |
| Massachusetts | 8.54 | $273 | $119,805 |
| Michigan | 6.38 | $123 | $54,190 |
| New Hampshire | 8.18 | $151 | $66,158 |
| New Jersey | 9.78 | $206 | $90,560 |
| New Mexico | 5.95 | $127 | $55,737 |
| New York | 8.50 | $222 | $97,553 |
| North Carolina | 8.19 | $137 | $60,191 |
| Ohio | 8.19 | $130 | $57,246 |
| Pennsylvania | 7.79 | $156 | $68,655 |
| Rhode Island | 7.29 | $222 | $97,227 |
| South Carolina | 7.29 | $99 | $43,669 |
| Texas | 9.72 | $179 | $78,676 |
| Vermont | 8.51 | $173 | $75,864 |
| Virginia | 9.72 | $160 | $70,113 |
| Wisconsin | 8.51 | $162 | $71,214 |
Solar lease vs. solar purchase
There are a few different ways to cover the cost of solar. Cash purchases, loans, and solar leases or power purchase agreements are the most common ways.
Leases and power purchase agreements: When you get a solar lease, you don’t buy your solar panels. You make predictable monthly payments for the solar panels, maintenance, and monitoring, and the solar panels reduce your electric bill. A key benefit of a solar lease is that you can avoid the large upfront payment of purchasing, and start saving immediately. Power purchase agreements are a similar agreement.
Cash purchases: When you purchase solar with cash, you pay the entire cost upfront.
Loan purchases: You’ll pay for your solar installation upfront, then pay back your loan in regular payments, including any interest and loan fees.
See how much you can save by going solar with Palmetto
What goes into the cost of solar panels?
There’s more to rooftop solar than just the panels. Here’s what makes up the cost.
Panels: The panels convert sunlight into electricity.
Inverter: A solar inverter converts direct current electricity from your panels into alternating current electricity your home appliances can use.
Racking: Racking is what attaches your solar panels to your roof.
Wiring: Wiring and necessary conduit is another necessary component.
Design: Since each home is different, each solar system needs to be designed to fit it.
Permitting: Local authorities may require building or electrical permits. Solar companies incur costs in pulling them.
Interconnection: Your utility company needs to grant you permission to connect your solar panels to the grid. That happens in a process called interconnection.
Inspections: Inspection after installation is another important step that adds to the cost.
Incentives: State and local incentives, from sales and property tax breaks to remaining state income tax breaks to local rebates, you still may be able to find incentives that can lower the cost of solar.
How are solar panels typically priced?
The most common metric used to measure the cost of solar is price per watt, or PPW.
Price per watt is found with a fairly simple calculation.
Total cost / Solar capacity in watt = PPW
Typically, larger systems have lower PPWs, even if they cost more in total.
What affects solar panel cost?
Home solar panels vary in cost for a lot of reasons. Here’s how a few different factors can increase your cost.
Size of solar system: The more solar panels you install, the more you’ll pay. But while your overall cost may increase, your money may go farther. Larger installations typically have a lower price per watt.
Attached battery: Backup battery storage can be useful in a blackout. In some areas, batteries are key to unlocking solar savings, so even though you’ll pay more for the battery, you save more in the long run.
Complexity of roof: It’s generally easier to install solar panels on roofs with large, uninterrupted surfaces. A simple roof could mean a lower cost.
Location: You can see above that some states have lower solar costs than others. Local cost of labor, permitting, and utility requirements can affect the cost.
Roof replacement: While it’s not a direct solar cost, if your roof is nearing the end of its useful life, you might be required to replace your roof before going solar. (Replacing your roof is a great time to go solar.)
Maintenance and cleaning: Solar panels typically don’t need a ton of maintenance, but occasional issues can arise. In particularly dusty areas, occasionally cleaning solar panels may be beneficial.
See how much you can save by going solar with Palmetto
How does a solar lease impact total solar panel costs?
When you lease your solar panels, you skip owning solar panels and instead make predictable monthly payments to the leasing company.
Solar leases reduce financial barriers to entry. Instead of paying the cost of solar panels all at once, you spread the cost over the lifetime of your system. This can mean immediate savings and no waiting for your solar payback period.
Because you don’t own the system, you’re also not on the hook for maintenance or repair when issues pop up.
Incentives and tax credits for solar panels and solar batteries
The incentives available for home solar panels have undergone a huge shift in 2025. Here’s where things stand as of this writing.
Federal solar tax credit
The longstanding 30% federal tax credit for owned solar systems expires at the end of 2025, but companies that lease solar panels have tax credits available to them that last for longer. That means you may indirectly benefit from tax credits when you lease solar panels, even after the 2025 tax credit.
State and other tax credits
Many states offer local renewable energy incentives that reduce how much solar panels cost.
- State tax credits
- Solar equipment rebates
- Low-interest loan programs and payback period adjustments
- Solar renewable energy certificates
- Performance-based incentives
- Property and sales tax exemptions
- Electric bill net metering programs
See how much you can save by going solar with Palmetto
Incentives that impact total cost for solar panels vary significantly according to your location. Check with your solar installer, state government, and electricity bill provider to learn more details, or talk with a knowledgeable Palmetto expert to understand all your incentive opportunities.
Making solar batteries pay off
After installing solar panels, another path to residential energy independence is adding a solar battery system. Batteries allow you to save electricity generated during the day for use at night or during an outage. They can also open up additional opportunities to sell electricity back to the grid and save more.
Are solar panels worth it?
Often, the answer is yes. Solar panels can reduce electric bills and generate savings for two decades or longer. How much any one homeowner can save depends on the cost factors discussed above, their cost of electricity, and the cost of electricity in the future.
You can track your home’s energy usage and energy costs, plus find ways to save money, whether those ways include going solar or not, with the free Palmetto app.
Want to see how much you could save on electricity bills with solar? Working with a reliable solar company is the best way to get the system that works best for you.
Palmetto makes it simple to understand if solar power is the right decision for your home. Explore Palmetto’s free solar savings tool and begin your journey toward a cleaner, more affordable energy future today.
See what solar can do for you:
Solar cost FAQs
How much do solar panels cost?
The cost of solar panels varies by system size, location, roof complexity and many other factors. According to Palmetto’s data, the average cost of solar panels ranges from $2.36-$3.24 depending on location.
Can solar panels save you money?
Solar panels can definitely save people money. In some cases, like those who live in heavily shaded homes, use very little electricity, or have extremely cheap electricity, savings may not be significant.
Are solar panels worth the cost?
Solar panels can definitely be worth the cost. Many systems can save homeowners tens of thousands of dollars over their lifetimes.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
