Solar panel cost in 2025: It may be lower than you think
It costs around $30,000 to install solar panels. That's a big number, but incentives usually lower it significantly.
By Emily Walker
Updated July 31, 2025
The average U.S. solar shopper needs about 11 kilowatts (kW) of home solar to cover their electricity usage. Based on thousands of quotes in the EnergySage Marketplace, you'll pay about $20,754 to install a system around that size in 2025 after applying the federal tax credit—but that incentive is going away at the end of the year.
President Trump signed his sweeping reconciliation bill into law on July 4, 2025, eliminating the Biden-era residential solar Investment Tax Credit (ITC). Starting in 2026, homeowners will no longer be able to claim the solar tax credit. If you go solar after December 31, 2025, expect to pay 30% more.
If you finance your system with a loan, this number will be higher due to interest rates. Either way, the economics of going solar almost always result in electric bill savings that will pay for your system over time, sometimes a few times over.
We often reference the cost-per-watt ($/W) of solar to compare the value of a quote against the national average. According to the most recent data from the EnergySage Marketplace, the average cost-per-watt across the U.S. is around $2.53/W before incentives. Your state-level average cost-per-watt will be a more relevant benchmark, but those numbers vary widely. Even with that number, you'll still need to consider the shape of your roof, the incentives in your state or region, and the quality of your solar equipment before you can get a true cost estimate.
Fortunately, EnergySage can help you determine how much solar will cost you, and how you can lower that price to start saving sooner.
KEY TAKEAWAYS
- The average cost of a 12 kW solar panel installation on EnergySage is $20,754 after the federal tax credit.
- You'll probably save anywhere from $34,000-$120,000 over 25 years by going solar.
- Solar panels are just 12% of the total cost of a solar panel installation.
- Federal and state solar incentives significantly lower the cost of solar for most homeowners. However, the 30% federal tax credit will no longer be available to claim after December 31, 2025.
Average cost of an 12 kW solar panel installation in 2025
How much do solar panels cost in your state?
If you live in a hot state and require a lot of air conditioning, you'll probably need a lot of solar panels. As we explain more below, most solar installers charge less per watt for larger systems, so your "unit" price could be quite low.
We generally see this trend on EnergySage (though there are some outliers), with lower $/W pricing in warmer states and higher $/W pricing in colder states: Arizona has the lowest average cost of solar, while Wyoming and Nebraska have some of the highest prices. But, because you probably need a larger system in sweltering Arizona than in cooler Maine and New Hampshire, you may end up paying a similar price overall.
| State | Before Incentives | After Incentives | Tax Credit Value | Cost Per Watt | 25-Year Savings |
|---|---|---|---|---|---|
| Alabama | $44,200 | $30,940 | $13,260 | $3.20 | $56,205 |
| Arkansas | $31,935 | $22,355 | $9,581 | $2.44 | $38,041 |
| Arizona | $27,288 | $19,102 | $8,186 | $2.05 | $33,286 |
| California | $20,363 | $14,254 | $6,109 | $2.29 | $118,316 |
| Colorado | $29,670 | $20,769 | $8,901 | $2.83 | $31,793 |
| Connecticut | $31,270 | $21,889 | $9,381 | $2.79 | $129,152 |
| Washington D.C. | $29,628 | $20,740 | $8,888 | $3.01 | $88,076 |
| Delaware | $31,671 | $22,170 | $9,501 | $2.25 | $50,487 |
| Florida | $31,935 | $21,482 | $9,206 | $2.16 | $68,751 |
| Georgia | $31,581 | $22,107 | $9,474 | $2.54 | $29,423 |
| Hawaii | $28,106 | $19,674 | $8,432 | $3.23 | $137,835 |
| Idaho | $32,151 | $22,506 | $9,645 | $2.51 | $20,419 |
| Iowa | $33,282 | $23,297 | $9,985 | $2.96 | $30,753 |
| Illinois | $33,834 | $23,684 | $10,150 | $2.81 | $53,878 |
| Indiana | $36,224 | $25,357 | $10,867 | $2.87 | $32,530 |
| Kansas | $34,903 | $24,432 | $10,471 | $2.94 | $30,220 |
| Kentucky | $35,785 | $25,050 | $10,736 | $2.66 | $34,127 |
| Louisiana | $27,683 | $19,378 | $8,305 | $2.52 | $24,126 |
| Massachusetts | $32,500 | $22,750 | $9,750 | $3.04 | $180,204 |
| Maryland | $36,444 | $25,511 | $10,933 | $2.65 | $62,536 |
| Maine | $34,443 | $24,110 | $10,333 | $2.94 | $64,483 |
| Michigan | $34,112 | $23,878 | $10,234 | $3.10 | $31,531 |
| Minnesota | $33,664 | $23,565 | $10,099 | $2.87 | $42,050 |
| Missouri | $32,143 | $22,500 | $9,643 | $2.64 | $35,708 |
| Mississippi | $27,665 | $19,366 | $8,300 | $2.71 | $26,340 |
| Montana | $32,463 | $22,724 | $9,739 | $2.57 | $29,779 |
| North Carolina | $32,669 | $22,868 | $9,801 | $2.34 | $37,659 |
| Nebraska | $62,057 | $43,440 | $18,617 | $3.42 | $8,860 |
| New Hampshire | $31,763 | $22,234 | $9,529 | $2.99 | $97,289 |
| New Jersey | $33,265 | $23,286 | $9,980 | $2.62 | $65,668 |
| New Mexico | $26,333 | $18,433 | $7,900 | $2.88 | $31,564 |
| New York | $33,482 | $23,437 | $10,045 | $2.81 | $49,047 |
| Nevada | $26,362 | $18,453 | $7,909 | $2.22 | $79,644 |
| Ohio | $33,961 | $23,773 | $10,188 | $2.66 | $65,953 |
| Oklahoma | $32,641 | $22,849 | $9,792 | $2.31 | $48,328 |
| Oregon | $32,272 | $22,590 | $9,682 | $2.67 | $51,169 |
| Pennsylvania | $33,664 | $23,565 | $10,099 | $2.62 | $79,176 |
| Rhode Island | $32,502 | $22,751 | $9,751 | $3.17 | $132,200 |
| South Carolina | $30,946 | $21,662 | $9,284 | $2.52 | $41,199 |
| Tennessee | $42,469 | $29,728 | $12,741 | $3.25 | $15,902 |
| Texas | $28,844 | $20,191 | $8,653 | $2.09 | $87,947 |
| Utah | $30,321 | $21,225 | $9,096 | $2.58 | $4,290 |
| Vermont | $32,615 | $22,831 | $9,785 | $2.98 | $38,528 |
| Virginia | $37,697 | $26,388 | $11,309 | $2.81 | $56,794 |
| Washington | $34,227 | $23,959 | $10,268 | $2.60 | $24,570 |
| West Virginia | $44,721 | $31,305 | $13,416 | $3.10 | $69,935 |
| Wisconsin | $35,327 | $24,729 | $10,598 | $2.99 | $44,799 |
| Wyoming | $38,233 | $26,763 | $11,470 | $3.53 | $8,476 |
How to calculate your cost of solar?
There’s a lot that goes into the sticker price a solar installer charges you. Panels are just one part of the equation. It’s also worth understanding the costs that come from the business operations an installer needs to account for to stay afloat.
*Based on a $29,649 12 kW system before incentives. These are averages for the whole U.S. Costs will always vary from installation to installation.
**Based on a 2021 study by the National Renewable Energy Laboratory (NREL).
Solar equipment costs
The panels themselves are probably the first thing that comes to mind when you think about going solar, but solar panels represent less than a third of the total solar equipment costs. You can expect all required solar equipment, including supply chain costs and sales tax, to cost $13,650—about 46% of the total system price.
This price depends on the brand and quality of the equipment you select, and sometimes the bigger price tag is worth it: Investing in high-quality equipment can lead to better long-term savings. But reaching for the highest-priced panels often isn't the best choice. There are many high-quality options with varying price points.
The type of panel you install also directly impacts the quality of your installation. Monocrystalline solar panels offer the highest efficiency and power output and are used in most home systems today. They're often more expensive than polycrystalline solar panels, but you need to buy more polycrystalline panels for the same amount of power, so your overall installation costs may be similar. Thin-film solar panels are the cheapest type of panel, but they aren’t often used for home installations due to their low production. They're a great option for RVs, campers, and DIY home setups.
Inverters can cost almost as much as solar panels depending on the type you select. They convert the direct current electricity your solar panels produce into alternating current that household appliances use. Microinverters and optimized inverters are similar in price but cost a few thousand dollars more than string inverters. If you have a complex roof with multiple planes or shading, it's usually worth it to select a pricier microinverter or an optimized inverter to maximize your system's production.
Racking and mounting equipment attaches solar panels to your roof, but it's a relatively low-cost portion of the installation. You'll also need wiring to connect your rooftop system to the grid and your electrical panel, which can add a few thousand dollars.
Installer costs
Another piece of the solar installation puzzle is the company performing the job. Solar installers charge varying amounts for their services. The final price they offer depends on their track record, warranty offerings, and internal operations. A well-regarded solar installer with premium warranty offerings will often charge more–and it will usually be worth the money.
Installer costs are about the same as equipment at around $13,650 or 46% of the total installation. Labor is only about 7% of installer costs and profit is generally around 11%. Your biggest installer costs go toward sales, marketing, and overhead.
SOLAR SAVINGS
Why EnergySage prices are lower than national prices
Permitting and interconnection
Permits and fees can add a few thousand dollars to your installation, accounting for about 8% of the total cost. You'll usually need a few solar permit documents, which your installer should handle. You'll also have to pay a fee for interconnection, which is the process of connecting your solar energy system to the grid.
There’s some exciting work happening to lower the costs and the interconnection timeline. The Department of Energy’s SolarApp+ aims to make the interconnection process cheaper and quicker for everyone.
What impacts the cost of your solar panel system?
Besides the equipment and installer you select, the price you pay heavily depends on other factors related to your electricity use and property. The system size you need to cover your electricity usage, your roof's characteristics, and your location all significantly impact your cost of solar.
System size
It's pretty simple: Bigger solar panel systems produce more electricity and cost more money. But there’s also a Costco-esque relationship between system size and price, where larger systems generally have a lower average $/W. It’s like buying food in bulk: The overall price is higher, but the per-unit price is lower. It's not an exact science, but there's a pretty clear trend.
| System Size | Average $/W | Cost Before Federal Tax Credit | Cost After Federal Tax Credit |
|---|---|---|---|
| 4 kW | $2.80/W | $11,200 | $7,840 |
| 5 kW | $2.71/W | $13,550 | $9,485 |
| 6 kW | $2.65/W | $15,900 | $11,130 |
| 7 kW | $2.58/W | $18,060 | $12,642 |
| 8 kW | $2.59/W | $20,720 | $14,504 |
| 9 kW | $2.56/W | $23,040 | $16,128 |
| 10 kW | $2.54/W | $25,400 | $17,780 |
| 11 kW | $2.53/W | $27,830 | $19,481 |
| 12 kW | $2.49/W | $29,880 | $20,916 |
| 13 kW | $2.47/W | $32,110 | $22,477 |
| 14 kW | $2.47/W | $34,580 | $24,206 |
| 15 kW | $2.42/W | $36,300 | $25,410 |
*This number doesn't match the average cost of solar because that number includes all quotes, not just those for 12 kW systems.
It's worth it to get a larger system that covers all your electricity use. You’ll cut your utility bill and save more money as a result. Zero-down, low-interest solar loans are also becoming common. They make it easier to buy a solar panel system that can fully offset your electricity bill so you can start saving immediately.
Roof and home characteristics
The complexity of your solar installation impacts the price you pay. The more direct sun exposure to your roof, the fewer panels you'll need to cover your electricity bill. If you have a south-facing roof that slopes at a 30-degree angle and has full sunlight exposure, installing solar on your home will be relatively easy and cost-effective.
If your roof has multiple planes, dormers, or skylights, solar will require more equipment and labor, driving up your costs. Big trees shading your roof will also set you back $300 to $1,500 to remove them or cut them back.
You probably don't think about your electrical panel too much, but it's another key component of a solar panel installation. Sometimes, you might need to upgrade or rewire your electrical panel to go solar, which can add a few thousand dollars to your bill. As a rule of thumb, your electrical panel should be at least 200 amps to go solar.
Location
Solar installation costs can vary depending on where you live. Some areas require larger system sizes to produce the same amount of energy as those with more daily sunlight. Other areas have higher electricity needs due to extreme temperatures. And, in some areas, you'll have access to better incentives, like state rebates and tax credits that can significantly lower your costs.
Is solar worth the price tag?
Solar is worth it for most homeowners because it eliminates or significantly reduces your electric bill. It's most helpful to think about solar panels as an investment. It takes an average of 7.3 years to earn back the money you spend on installing solar panels. After that point, the electricity from your solar panels is free.
Most homeowners will save $34,000 to $120,000 over 25 years with solar. Your savings depend on a few factors, including your electricity rates and the cost of your system. You can calculate your break-even point, or solar payback period, by dividing the final cost (the total cost of your solar panel system minus any upfront incentives) by your annual financial benefit (the amount you save on electricity combined with annual incentives). The faster the cost of electricity increases, the shorter your payback period and the greater your savings will be.
Lower solar prices also drive shorter payback periods. Ten years ago, a home solar installation cost $3.36/W according to the National Renewable Energy Laboratory. That's 28% more than what we see on EnergySage right now. Solar prices did increase slightly in the last three years, primarily due to the pandemic-related equipment shortages felt in many industries. But, as of 2024, solar is back down to pre-pandemic prices, so it's a great time to get quotes.
Solar incentives can help make solar a worthy investment
Tax credits, cash rebates, net metering, performance-based incentives (PBIs), and solar renewable energy credits (SRECs) are all ways you can get money back on a solar installation. Your eligibility for these types of incentives depends on where you live. Utilities, cities, and states can all offer solar incentives to people living in their service areas.
The federal solar tax credit (expires January 1, 2026)
The federal solar tax credit, or the investment tax credit (ITC), is available through the end of 2025.
The ITC isn't location-dependent. With this federal incentive, you'll get a credit worth 30% of your entire solar panel installation cost applied to your federal tax bill. There's no cap value. You just need to have a high enough tax bill to take advantage of it.
For example, with a 12 kW system that costs $29,649, you'd get a credit worth $8,895. If you don't have a big enough tax bill to take advantage of the full credit, you can roll over the remaining value to the next year.
Are there hidden solar panel costs?
You shouldn't face any hidden costs with a solar installation, but there are a few additional expenses you may consider.
Maintenance costs
Solar panels require little to no maintenance over their lifetime, so you shouldn't expect to spend much once your panels are operating. The stronger the warranty associated with your equipment and labor, the less you'll need to worry. The best solar panel brands today offer comprehensive 25-year warranties.
There’s always a chance that something happens that’s not covered by your warranties. You may need to trim trees as they grow or hire a cleaner if you live in an area with heavy air pollution or pollen. Learn more about potential costs you could run into post-installation.
Roof replacement
Solar panels last up to three decades. Before you install your system, you'll want to ensure that your roof will hold up for the same amount of time. Generally, we recommend replacing your asphalt roof if it's more than 5 to 10 years old before installing solar panels.
