How much does solar panel installation cost?

*Figures above represent national average prices for 200-350 watt photovoltaic panels. Average costs assume your home will require 15-25 panels. Costs do not include any solar tax credits.

Thinking about installing solar panels? Keep reading to learn about what factors can impact the cost so you can set a budget. And when you’re ready to move forward with this project, contact nearby solar panel installation professionals to get free estimates for more accurate pricing. 

High-quality solar panels (which are considered to be 200-350 watt photovoltaic panels) cost an average of $625-$960 in the U.S. A low-quality photovoltaic solar panel that's up to 150 watts costs $542-$833, on average, in the U.S.

This article will focus on high-quality 200-350 watt solar panels. If you're interested in low-quality panels, your costs will likely be a bit lower up-front, but expenses could be higher over time.

On average, you can expect to pay anywhere from $255-$391 per panel in labor costs and $370-$569 per panel in material costs in the U.S. 

*Figures above represent prices per panel for 200-350 watt photovoltaic panels.

In addition to material and labor costs, other factors could impact how much you will pay to install solar panels. These may include the following.

System size.

The size of your system and how many solar panels you're using can impact your total cost. You can optimize solar panel costs by determining the energy you need to consume, then installing the number of panels that help you achieve that without being excessive.

Roof’s condition.

You'll need to ensure your roof is in good enough condition to install solar panels. If you need to replace your roof (which can get pricey), that will add to your project’s total cost. 

Tree trimming or cutting.

Ideally, you don’t want any trees to create too much shade near your roof. If you have trees in the way, you may need to factor in the additional cost of trimming the branches or cutting them down. 

Type of installation.

In addition to roof-mounted solar panel installations, carport installation and ground-mount options are available. Chat with a solar panel installation professional to learn more about your options and the potential costs.

Monocrystalline vs. polycrystalline solar panels. 

According to the American Solar Energy Society, monocrystalline solar panels have a dark, uniform look with rounded edges. They tend to be more efficient than polycrystalline panels, which have a bluish hue and no rounded edges. 

The cost to manufacture monocrystalline panels is high and tends to result in more waste — which typically makes them more expensive than polycrystalline panels. 

Type of inverter.

There are also different types of inverters that convert energy from your panels:

• String inverters are more common. With this setup, energy from all of the panels is sent to a single inverter. String inverters tend to be more affordable.
• Microinverters tend to be more expensive than string inverters. With this setup, each solar panel is connected to a microinverter to convert energy on the roof.
• Power optimizers provide similar benefits to microinverters and string inverters. They tend to cost less than microinverters.

Additional “soft costs.”

In addition to labor costs, you’ll need to consider the other “soft costs” of going solar. Soft costs tend to make up about 65% of that total cost. Ultimately, these costs are factored into what a homeowner will pay to install solar panels:

Source: Office of Energy Efficiency & Renewable Energy

When you decide to use solar panels, consider these options to maximize your financial savings:

1. Optimize your roof. 

The condition of your roof and the amount of sunshine and shade it experiences can impact the efficacy of your solar panel system. To optimize the installation, ensure your roof is in prime condition for solar panel installation. You may also want to consider removing trees or obstacles that could create excess shading for the panels.

2. Install a purchased solar system.

You can often save money on installation costs when you install a purchased solar system rather than a system installed using a lease or power purchase agreement, according to the Office of Energy Efficiency & Renewable Energy. Solar loans may also offset the up-front costs and often require monthly loan payments that are lower than a typical energy bill.

3. Compare installers.

Save money and ensure you’re paying a fair price by comparing solar panel installers before you hire one. You can get quotes from multiple installers to find the most cost-effective professional you're comfortable with.

4. Consider setting up net metering.

Net metering is an agreement between the homeowner and the utility company. With net metering, solar panel homeowners get compensated in utility bill credits for excess solar power generation they send back to the electricity grid.

5. Look into tax incentives.

Look into current federal tax solar credits that may help you save on income taxes (scroll down to the Are solar panels cost-effective? section for more information.)

The answer to this depends on various factors, including the following.

• How much electricity do you consume?
• What’s the size of your solar energy system?
• How much power does your solar energy system generate?
• What are the electricity rates set by your utility (which you can check in the National Utility Rate Database)?
• How much will your utility company compensate you on your electric bill based on the excess solar energy you send back to the grid?

The U.S. federal government also offers tax incentives for renewable clean energy use, including a federal residential solar energy credit. Homeowners can claim this federal solar tax credit on federal income taxes based on a percentage of the solar panel system the taxpayer pays for.

There may also be additional state and local incentives in your area. Check the Database of State Incentives for Renewables & Efficiency to see if there are more potential solar panel savings where you live.

Installation labor accounts for around 7% of total solar panel installation costs. A professional can also help with permitting, inspection and interconnection for the solar panel system. Additionally, you may need to hire a pro for installation to be eligible for some tax incentives.

Some DIY solar panel systems are available. However, as CNET points out, most are designed for off-grid purposes. In these cases, you would only use a DIY solar panel system to power spaces that aren't typically served by a standard utility, like an RV. 

For a home solar panel system, it's best to enlist a professional. Due to municipal zoning laws, you may even be breaking the law if you install solar panels yourself.

Based on regular recommended maintenance and conditions of normal wear and tear, the life expectancy of solar panels is 20-30 years. The life expectancy of solar system batteries is 3-12 years.

However, you should ask the solar company, manufacturer and/or contractor you hire to understand your solar panels’ lifespan. Also, check your warranty.

One of the most frequently asked questions in this industry is, are solar panels worth it? Installing solar panels could be a worthwhile investment, especially if you live in an area that experiences a lot of sunshine. 

Other benefits include the following:

• Energy savings. With a solar panel system, you could use net metering to earn utility credits based on the energy you don't use. 
• Return on investment. Depending on your energy usage and how you finance your solar panel system, you may be able to get a return on your investment in the form of energy savings over time. 
• Increased home value. The U.S. Department of Energy reports that installing solar panels can improve your home’s value. Plus, a 2019 study by Zillow found that homes with solar panels sell for 4.1% more on average than homes without solar power. Talk with your real estate agent about the potential increased value your home could see with solar panels.

Related: Ranked: The most solar cities in the U.S.