How Much Do Solar Panels Cost to Install in 2024

When people start looking into solar, the first question is always the same: "What's this actually going to cost me?" The national average for a solar panel installation hovers around $29,000 before any incentives kick in. But here's the good news—that sticker price drops significantly once you factor in things like the federal tax credit.

Most homeowners find their final, out-of-pocket cost lands somewhere between $18,000 and $25,000 for a full residential setup.

The Real Cost of Solar Panel Installation

To really understand what you're paying for, you have to look past the national average and get into the specifics of your project. The total price isn't just for the solar panels themselves. It's a complete package that includes inverters, mounting hardware, the labor to get it all on your roof, plus all the necessary permits and inspections. Think of it as a comprehensive investment in your home's energy independence.

The biggest factor influencing the final bill is the size of your system, which is measured in kilowatts (kW). A larger house with a family that uses a lot of electricity will naturally need a bigger system, which means a higher upfront cost. On the flip side, the cost-per-watt—the standard way we price solar—often goes down as the system gets bigger, so you get more bang for your buck.

Average Costs Before and After Incentives

The single most powerful tool for making solar affordable is the federal solar tax credit. This incentive slashes 30% off the total cost of your system. It's not just a simple discount; it's a dollar-for-dollar reduction of what you owe in federal taxes, which makes a massive difference in your net cost. For many homeowners, this credit is what pushes solar from a "maybe" to a "let's do this."

We put together a complete guide that breaks this all down in much more detail, which you can find at https://www.honestwatts.com/blog/solar-panel-installation-cost.

To put this into perspective, let's look at the numbers. The average 12-kilowatt solar panel system costs about $29,649 before any credits are applied. After claiming the 30% tax credit, that price drops to just $20,754. That's a huge saving that shows just how impactful these incentives are.

Your initial quote is just the starting point. The final price you pay is almost always lower once federal, state, and local incentives are factored in, turning a large investment into a manageable one.

Now, let's break down how this looks across different common system sizes. The table below gives you a clear picture of the initial costs and what you can expect to pay after the 30% federal tax credit is applied.

Average Solar Panel Installation Cost by System Size

As you can see, the tax credit provides substantial savings across the board, making solar a more accessible investment for more families.

One last thing to keep in mind: the health of your roof is critical. If your roof is old or needs repairs, you might have to handle that before the panels can go on. To get a sense of what that could involve, it’s worth looking into typical roof replacement costs to avoid any surprises.

What's Actually in Your Solar Quote?

Getting your first solar quote can feel a bit like trying to decipher a foreign language. You see a long list of parts, labor costs, and fees, and it’s easy to get lost in the jargon. But once you understand what you're looking at, you can see exactly where your money is going and feel much more confident in your decision.

Think of it like a recipe. The solar panels are the star ingredient, but they're not the whole meal. In fact, the panels themselves often account for only about 25% of the total project cost—a much smaller slice of the pie than most people think. The other components are just as crucial for making the whole system come together.

The Hardware That Powers Your Home

Beyond the panels, your quote will detail a few other key pieces of equipment. Each one has a specific job to do in converting raw sunlight into the power that runs your lights and appliances.

• Inverters: This is the brain of the operation. Solar panels generate direct current (DC) electricity, but your home uses alternating current (AC). The inverter’s job is to make that conversion, seamlessly.

• Racking and Mounting: This is the system's backbone. It’s the heavy-duty framework that bolts the panels securely to your roof, built tough enough to handle decades of wind, rain, and snow.

• Wiring and Electrical Gear: This covers all the behind-the-scenes connections—the specialized wiring, conduits, and safety disconnects that link your panels to the inverter and then safely into your home’s electrical panel.

This graphic does a great job of showing how all these costs typically break down in a standard solar project.

As you can see, the physical equipment is only one part of the equation. A huge chunk of what you pay for covers the services and other non-hardware expenses.

Demystifying the "Soft Costs"

The biggest part of your quote—often more than 60%—is what the industry calls "soft costs." These are all the essential, non-hardware expenses required to get a solar project done safely, legally, and professionally. They're a major reason why the final price tag is much more than just the cost of the panels.

Soft costs cover everything from the skilled crew working on your roof to all the paperwork and planning happening behind the scenes. This includes things like permit fees, city inspections, and the installer's overhead like insurance, trucks, and marketing.

These costs can vary quite a bit depending on where you live and which installer you go with.

For instance, a typical home needs somewhere between 20 and 30 solar panels. In 2025, the all-in cost for a professional installation averages around $1,200 per panel. That puts the total project cost somewhere in the $24,000 to $36,000 range. These numbers reflect the combined price of the hardware and all those significant soft costs. To see how these figures stack up nationally, you can dig into more cost survey data on This Old House.

How Your Location and Choices Shape the Final Price

The final number on your solar quote isn't pulled out of a hat. Think of it more like buying a car—the sticker price is just the starting point. The final cost really comes down to the options you pick, the engine you want, and even where the dealership is located. When it comes to solar, the total price is a mix of your geography, the gear you choose, and the specific quirks of your own home.

You could have two identical houses in different states, and they'd get wildly different quotes for the exact same solar setup. Why? A big part of it is the local cost of living and what installers have to pay their crews. An installation in a pricey city on the coast is always going to have higher labor costs than one in a small town out in the Midwest. This directly affects those "soft costs" we talked about earlier, and they can really add up.

State policies and even the local weather have a huge say, too. States with great solar incentives or ridiculously high electricity bills, like California, can make the upfront investment look a lot better. At the same time, the amount of sun you get—compare sunny Arizona to the often-overcast Northeast—dictates how many panels you'll need to hit your energy goals, which has a direct impact on the size and cost of your system.

Your Equipment Choices Matter

Beyond where you live, the hardware you pick is one of the biggest factors in what you'll pay. Not all solar equipment is the same, and you're constantly making a trade-off between how much you spend now versus how well the system performs for the next 25 years.

Here are the main decisions you'll be making:

• Solar Panel Efficiency: You can go with standard-efficiency panels to keep the initial cost down, or you can opt for premium, high-efficiency panels. The premium ones cost more upfront, but they crank out more power from a smaller footprint, making them a great fit for homes with limited roof space.

• Inverter Technology: You'll also need to decide between a single string inverter that manages all your panels together or individual microinverters attached to each one. String inverters are the cheaper option, but if even one panel gets shaded, the production of the whole group takes a hit. Microinverters cost more but let each panel do its own thing, squeezing out every last drop of electricity, which is a lifesaver on complicated or partially shaded roofs.

Think of your equipment choice as a long-term strategy. Spending more on high-efficiency panels and microinverters today can easily translate into bigger energy savings down the road, giving you a much better return over the life of the system.

The Complexity of Your Roof

Finally, the roof itself is a huge piece of the cost puzzle. To an installer, every roof is a unique job site with its own challenges. A simple, single-story house with a standard asphalt shingle roof that isn't too steep? That's the dream scenario—easy and cheap.

But things get more complicated, and labor costs climb, when you add in factors like:

• Steep Pitch: A really steep roof is a safety challenge and just takes the crew longer to work on.

• Roof Material: Bolting mounts onto fragile materials like clay or slate tiles is a delicate, time-consuming process compared to asphalt shingles.

• Obstructions: If the crew has to work around a bunch of vents, skylights, or a chimney, it means custom work and more planning.

Every one of these little details adds time and requires more skill from the installation team, and you'll see that reflected in the final quote. It's also why your neighbor's price could be totally different from yours, even if your houses look the same from the street.

Finding Savings with Solar Incentives and Rebates

The sticker price you see on a solar quote is rarely what you actually end up paying. Think of it more as a starting point. The real key to figuring out how much solar panels cost to install is knowing how to tap into the various financial incentives out there.

These programs are designed to make clean energy more affordable, and they pop up at the federal, state, and even local levels. When you start stacking them, you can seriously slash your net cost. The big one, of course, is the federal solar tax credit.

The Federal Solar Tax Credit

The Investment Tax Credit (ITC) is the heavyweight champion of solar savings in the U.S. It gives you a tax credit worth a whopping 30% of your total system cost, which you can claim directly against what you owe in federal income taxes.

This isn't just a deduction from your income; it's a dollar-for-dollar reduction of your tax bill. A $9,000 credit means you pay $9,000 less to the IRS. To be eligible, you have to own the system (leases don't count) and have enough tax liability to use the credit. If your credit is bigger than your tax bill for the year, you can typically roll the remainder over to the next.

For a full rundown on how it works and how to claim it, check out our detailed guide to the federal solar tax credit. Getting a handle on this incentive is the most important step in figuring out your true cost of going solar.

Beyond The Federal Credit: State And Local Perks

While the ITC is a nationwide benefit, the savings don’t stop there. Many states, local governments, and even individual utility companies offer their own programs that you can often stack on top of the federal credit. The specifics vary a lot depending on where you live, but they usually fall into a few common categories.

The world of solar incentives can feel complex, but understanding the main types makes it much easier to see what you might qualify for.

Common Types of Solar Financial Incentives

These incentives really add up and make a huge difference in the final cost.

• Cash Rebates: Some programs offer straightforward cash back. For instance, Oregon’s Solar + Storage Rebate Program can put up to $5,000 back in a homeowner's pocket for a new system.

• Property Tax Exemptions: A fantastic long-term perk. Many states agree not to reassess your home's value after you add solar, saving you from a higher property tax bill for years.

• Performance-Based Incentives (PBIs): In certain markets, you can earn money for the power you generate through programs like Solar Renewable Energy Certificates (SRECs).

Staying informed about major home energy and solar tax credits is a smart move for maximizing your savings. When you combine all these layered incentives, it's not uncommon for homeowners to knock 40-50% or even more off their total installation cost. This dramatically shrinks your payback period and makes your investment that much better.

Navigating Your Solar Financing Options

Paying cash upfront for a solar installation gives you the best return on your investment, but let's be realistic—that's not feasible for most of us. The good news is, you don't need a mountain of cash to go solar. Several financing paths have opened the door for homeowners to start saving on their electric bills right away.

The three main routes you'll encounter are solar loans, solar leases, and Power Purchase Agreements (PPAs). Each one works a bit differently, with its own trade-offs. Getting a handle on them is the first step to picking the right strategy for your home and your budget.

Owning Your System with a Solar Loan

Think of a solar loan just like any other home improvement loan. You borrow the funds to buy the entire system, then pay it back over time, usually with a fixed interest rate. This is by far the most popular option, and for good reason: it makes you the owner of the solar panels from day one.

Why does ownership matter so much? Two huge reasons:

• You get the incentives. As the owner, the lucrative 30% federal tax credit is all yours, along with any state or local rebates.

• You boost your home's value. A solar system you own is an asset that adds real, tangible value when it comes time to sell your house.

Of course, you'll pay interest, but it's often less than you might think. A typical solar loan might add $3,000 to $8,000 in interest over its lifespan. The best part? The monthly loan payments are usually structured to be less than your old utility bill, so you can start seeing net savings almost immediately. You can dig deeper into the numbers by checking out the latest solar panel cost data.

Accessing Solar with No Upfront Cost

What if your main goal is just to slash your electricity bill without a big financial commitment? In that case, a solar lease or a PPA could be a great fit. They're similar concepts, but with one critical distinction.

Leases vs. PPAs: What's the Difference? With a solar lease, you pay a flat monthly "rent" for the panels on your roof. With a Power Purchase Agreement (PPA), you agree to buy the power the system generates at a fixed price per kilowatt-hour—a rate that's almost always cheaper than what the utility company charges.

With either a lease or a PPA, a solar company installs and maintains the entire system on your roof for free. You get all the benefits of cheaper, clean power, but you don't actually own the equipment. This means the solar company gets to claim the tax credits and rebates, not you.

These "solar-as-a-service" models are perfect if you want immediate savings without the long-term financial commitment of ownership. If you're curious about how this compares to other big-ticket home upgrades, it can be helpful to explore the financing options for other major home systems like HVAC.

Ultimately, your choice boils down to what you value more: the long-term financial upside of ownership or the simple, zero-down path to a lower electric bill.

Answering Your Top Solar Cost Questions

Even after you've sorted through quotes and looked at incentives, a few practical questions always pop up. It's only natural when you're thinking about a long-term investment like solar. Let's dig into the three questions I hear most often from homeowners trying to figure out if solar really makes sense for them.

Getting these answers straight will give you a much clearer picture of what to expect years down the road, long after the installation crew has packed up and left. It’s about understanding the total cost of ownership, not just the price on the contract.

How Long Until My Solar Panels Pay for Themselves?

This is the big one, isn't it? We're talking about the solar payback period—the time it takes for your savings on electricity bills to completely cover your initial investment. Think of it as your system's personal break-even point.

For most homeowners across the U.S., you're typically looking at a payback period between 8 and 12 years.

Of course, that timeframe can shift. A few key things can speed it up or slow it down:

• Your Local Electricity Rates: If you're paying a fortune to your utility company now, your payback will be much faster. Every kilowatt-hour your panels produce is a direct saving at that high rate.

• How Much Sun You Get: It's no secret that living in a sunny spot means your panels will crank out more power. More power means more savings, which shortens that payback timeline.

• Great Incentives: Taking full advantage of federal tax credits, plus any state and local rebates, slashes your net cost right from the start. Your savings have a much smaller number to overcome.

Once you hit that break-even point, every ounce of energy your system produces for the rest of its 25+ year lifespan is pure savings. It’s money back in your pocket. For a deeper dive into how all these factors work together, check out our guide on residential solar panel cost.

Will Solar Panels Actually Increase My Home's Value?

Yes, they absolutely will. Multiple studies have confirmed that owning your solar panel system adds real, measurable value to your home. It's not just another home improvement project; it's an asset that buyers are actively looking for and are willing to pay more for. They see a home with solar as one that's already protected from soaring energy costs.

A solar panel system is one of the very few home upgrades that can actually pay you back over time. The bump in your home's resale value is often greater than the net cost of the system itself, making it a powerful financial move.

This boost in value is strongest when you own the system outright (whether you paid cash or used a loan) instead of leasing it. A potential buyer can immediately grasp the benefit of tiny—or even nonexistent—electricity bills, making your home stand out in the market.

What Are the Real Long-Term Maintenance Costs?

I get it. A lot of homeowners worry that solar panels will be a headache to maintain, but the reality is refreshingly simple. Solar panels are built tough, with no moving parts, making them one of the most hands-off additions you can make to your home.

Honestly, a good rainstorm is usually all it takes to keep them clean and working efficiently.

The main long-term cost to budget for is the eventual replacement of your inverter. Most modern inverters come with a 10 to 15-year warranty, so you might need to replace it once during the system's life. But beyond that, ongoing costs are minimal. Plus, the cost of solar technology just keeps dropping. Some analysts expect the global cost of solar power to fall by as much as 49% by 2035. You can see the full research on declining renewable energy costs on BloombergNEF.

Ready to see what solar could save you? With Honest Watts, you can get a free, no-pressure solar potential estimate in 30 seconds using just your address. No sales calls, just data-driven insights to help you make a smart decision. Discover your savings potential at https://www.honestwatts.com.