The future of solar is here, and smart consumers are taking advantage of the lowest average solar panel installation costs in history, paired with the most advanced solar panel technologies to-date. With this guide, businesses and homeowners alike will find helpful information answering some of the most common and practical questions about solar: How much does the average solar panel cost? What are the best and most affordable solar panels? What solar panel savings are available? Read on to discover why solar may be the best choice for your home or business.
Average Solar Panel and Installation Costs
Despite prices being low across all market segments – from hardware to labor – it can still be challenging to figure out what to expect when it comes to solar panel and installation costs.
According to the U.S. Department of Energy’s Lawrence Berkeley National Laboratory, the average installation price continued its years-long decline into 2019, at $3.70 per watt for residential, and between $2.40 and $3.00 per watt for commercial. However, they report that prices vary widely across projects due to a variety of factors, reaching up to $4.50 per watt.
The Solar Energy Industries Association (SEIA) states that for an average-sized system homeowners can expect to pay about $18 thousand, a monumental drop from a pre-incentive price of $40 thousand in 2010.
These averages include hardware costs such as the PV module and inverter, which turns light into energy, structural and electrical components and soft costs such as labor, sales tax, land acquisition, overhead and net profit.
Going solar as a sustainable and reliable source of alternative energy for a home or business can be a wise move. Prices to install solar PV systems are at an all-time historic low, and with dire warnings about climate change and a national average of $0.13 per kilowatt-hour of electricity, there’s never been a better time to go green with solar.
Solar PV System Sizes and Installation Steps
In 2019, the U.S. is home to more than 2 million solar PV installations,generating 69.1 gigawatts (GW) of solar energy. An installed solar capacity of nearly 70 GWs is enough to power 13.1 million American homes and is made up of various sized systems ranging from smaller residential installations in the 5 kW-zone to massive utility-scale projects generating 100s of megawatts (MW).
Smaller systems are between 2.5 kW to 10 kW, and the average residential system of 6.2 kW falls into this category. This is followed by larger 10 to 100 kW systems which can help power a larger home or small business. A 100 to 500 kW system is now considered commercial PV with the average commercial size at 181 kWs. From 500 kW to 5 MWs and beyond, we’ve entered utility-scale PV territory.
Whatever the size, home and business owners looking to go solar will find a variation of the following six steps when working with a solar installation company:
Technicians will visit the home to measure and evaluate whether a solar system will benefit the consumer. At this point, they will work on designing the system.
The design is further refined and any adjustments are made. The home or business owner approves the design for next steps. Solar expert Gaye Tomlinson, founder of Vaha Energy, explains that this is an involved process that relies on design and engineering experts.
The design is sent to the local city government for permitting.
Once the design is approved, installers meet with the buyer to go over the design, get final approval, and begin installing the system.
The city and/or county completes a final inspection of the system before it gets connected to the utility grid.
The solar company submits paperwork to the utility company to begin net-metering, the utility company then finalizes the whole process when they provide “Permission to Operate.”
Average Solar Panel Installation Costs State-by-State
Where a buyer lives impacts how much they will pay for solar, and while the average cost of solar installation doesn’t vary wildly between states, there are differences. Certain states offer cheaper labor, others do a better job of promoting and incentivizing the use of solar through rebates or tax breaks, and others are just well-suited to using solar due to their topography and climate.
Certain costs are generally static across states, these include the actual module (panel), inverter, structural and electrical components, supply chain costs, and net profit. Prices start to fluctuate more between individual states in permitting, inspection, interconnection with the grid, overhead, and installation labor. However, in a report from the National Renewable Energy Laboratory (NREL), the largest difference between the states they surveyed was only about $0.34 per watt.
Even with a higher than average cost per watt to install solar, California leads the country in installed solar capacity with more than 25,000 MWs, providing almost 19 percent of the state’s electricity. This far outpaces the rest of the nation; the next largest installer is North Carolina with 5,601 MWs.
- California dominates thanks in large part to the state’s bold moves to make solar mainstream. State law requires at least 50 percent of California’s electricity to come from non carbon-producing sources by 2030. In 2019, the state passed a standard requirement to take effect in two years for all new homes to have solar, adding a projected $8,000 to $12,000 to the cost of a home. Builders can either place solar panels on individual homes or build community-solar systems that serve a group of homes.
- While California is at the forefront of clean energy (it has more than 200 policies and incentives that support renewables and energy efficiency), there are a lot of other states working to promote solar. In 2019, the Maine Legislature passed three clean energy bills, including a renewable portfolio standard that requires the state to get 80 percent of its electricity from renewable energy by 2030 and 100 percent by 2050.
- 22 states and D.C. have renewable portfolio standards with provisions for solar and a majority of states offer solar rebates or tax credits, deductions, or exemptions including Arizona, Colorado, Kentucky, Oregon, Texas, California, Massachusetts, Montana, South Carolina, Iowa, North Carolina, New Mexico, Oklahoma, South Dakota, Washington, Hawaii, Nevada, Utah, Connecticut, Florida, Pennsylvania, Minnesota, New Hampshire, Vermont, Indiana, Rhode Island, Tennessee, Wisconsin, New York, and the U.S. territory, Puerto Rico.
- The states with the most policies and incentives promoting renewable energy and efficiency are California with 218 incentives, Minnesota with 184, Oregon with 146, Texas with 142, and Colorado with 131. However, while these states have the greatest number of incentives, that doesn’t always translate into greater numbers of installed solar.
- The price of electricity, the solar market, the climate or terrain, and other individual state-specific factors can play a role in how successful solar is in each state. For example, Nevada offers only 38 policies and incentives, yet its large uninhabited landmass, the amount of sun it sees each year, and the cost of electricity, make renewable energy an appealing alternative for homeowners and businesses alike. In addition, the utility company serving Nevada has more than 50 renewable energy plants throughout the state.
Top 10 Solar States
The top 10 solar state ranking is based on the cumulative amount of solar electric capacity installed in 2019 and based on data from the SEIA/GTM “Research Solar Market Insight” report.
California: 25,773 MW
North Carolina: 5,601 MW
Arizona: 3,873 MW
Nevada: 3,502 MW
Florida: 3,337
Texas: 3,028 MW
New Jersey: 2,911 MW
Massachusetts: 2,567
New York: 1,775 MW
Utah: 1,671 MW
| State | Average cost per watt | Cost of 5kW system (showing after tax credit) show before tax credit |
Average lifetime savings |
|---|
| Alabama | $2.89 | $10,115 | $31,926 |
| Alaska | $3.19 | $11,165 | $16,725 |
| Arizona | $2.81 | $10,675 | $77,134 |
| Arkansas | $3.47 | $11,793 | $55,005 |
| California | $3.44 | $12,594 | $72,323 |
| Colorado | $3.22 | $11,408 | $43,627 |
| Connecticut | $2.92 | $10,650 | $86,574 |
| District of Columbia | $2.96 | $10,157 | $70,363 |
| Delaware | $3.12 | $10,915 | $52,501 |
| Florida | $2.94 | $10,428 | $41,938 |
| Georgia | $2.81 | $9,856 | $33,430 |
| Hawaii | $3.88 | $14,447 | $121,586 |
| Idaho | $2.58 | $9,382 | $22,690 |
| Illinois | $2.48 | $8,718 | $51,962 |
| Indiana | $2.61 | $9,127 | $23,244 |
| Iowa | $2.41 | $8,448 | $43,796 |
| Kansas | $2.14 | $7,196 | $52,636 |
| Kentucky | $3.37 | $11,801 | $27,023 |
| Louisiana | $2.89 | $10,102 | $27,308 |
| Maine | $2.49 | $8,724 | $51,492 |
| Maryland | $2.76 | $9,367 | $65,489 |
| Massachusetts | $3.20 | $11,575 | $133,695 |
| Michigan | $3.31 | $10,761 | $42,962 |
| Minnesota | $3.00 | $11,199 | $30,900 |
| Mississippi | $2.93 | $10,247 | $63,178 |
| Missouri | $2.42 | $8,922 | $35,445 |
| Montana | $2.87 | $9,271 | $51,216 |
| Nebraska | $2.47 | $8,333 | $52,936 |
| Nevada | $3.00 | $8,116 | $95,076 |
| New Hampshire | $2.96 | $10,926 | $72,935 |
| New Jersey | $2.91 | $9,135 | $84,244 |
| New Mexico | $3.40 | $12,216 | $60,291 |
| New York | $3.37 | $12,059 | $49,832 |
| North Carolina | $3.18 | $11,431 | $54,293 |
| North Dakota | $1.99 | $6,967 | $35,724 |
| Ohio | $3.05 | $10,109 | $45,493 |
| Oklahoma | $2.69 | $9,426 | $60,149 |
| Oregon | $3.16 | $10,903 | $38,140 |
| Pennsylvania | $2.86 | $9,283 | $48,705 |
| Rhode Island | $3.21 | $11,654 | $114,225 |
| South Carolina | $3.30 | $12,254 | $56,734 |
| South Dakota | $2.69 | $9,399 | $40,659 |
| Tennessee | $1.86 | $6,495 | $45,495 |
| Texas | $2.80 | $9,956 | $50,009 |
| Utah | $3.06 | $10,633 | $45,783 |
| Vermont | $2.86 | $9,945 | $50,073 |
| Virginia | $2.46 | $9,644 | $35,185 |
| Washington | $2.91 | $11,364 | $32,188 |
| West Virginia | $3.64 | $13,643 | $40,525 |
| Wisconsin | $2.39 | $8,596 | $38,038 |
| Wyoming | $2.97 | $10,390 | $55,175 |
Source: Solar Reviews
Top 10 Best and Most Affordable Manufacturer Brands in 2019
It’s not difficult these days to come across high-quality systems at affordable prices. In fact, solar module power efficiency has gone up from 13.3 percent for residential in 2010 to 17.2 percent in 2017 and efficiency is even higher for commercial panels. However, subtle differences can make some manufacturer brands more attractive than others.
Let’s Go Solar has developed the following top 10 brands to help consumers make informed panel selections.
- Canadian Solar: Canadian Solar is the top choice for solar expert Gaye Tomlinson from Vaha Energy. It’s been around since 2001, has proven its sustainability, and produces a solid and reliable solar panel at an affordable price. It also now offers a poly module exceeding 400 watts, reaching one of the highest poly module power outputs in the solar industry.
- LG Solar: This premium brand recommended by Tomlinson produces high-quality panels with efficiency ratings between 18.5 and 21.7 percent. The reliable LG Solar brand offers panels that feature thinner wires, making the panel look all black from a distance.
- Panasonic: This premium brand has been in the solar business since 1975. Their testing protocols demand 20 additional tests beyond those mandated by current standards and while they’re more on the expensive end, their module efficiencies rank among some of the highest.
- SunPower: Another reliable premium brand offering high-efficiency panels with strong warranties. They have 400-watt panels for consumers who need to fit fewer panels on their system.
- Trina Solar: This standard brand’s panels are more affordable and offer 19.2 to 19.7 percent efficiency in three different models. It has a 0.5 percent annual power degradation, and a 30-year linear power warranty.
- Hanhwa Q Cells: This company uses its cutting-edge Q.ANTUM DUO Technology to offer up to 19.9 percent efficiency on a small surface area under both with low-intensity solar radiation and on hot, clear summer days. It was a top performer in multiple categories for the PV Module Reliability Scorecard
- SolarTech Universal: This American owned and operated company and is the number one listed solar panel by the California Energy Commission.
- Suniva: Another American manufacturer offers panels with efficiencies between 18 and 21 percent. It’s one of the more affordable options while still offering high-efficiency modules and a 25-year linear power warranty.
- REC Group: This company is an industry favorite and one of the top performers in the dynamic mechanical load sequence for the PV Module Reliability Scorecard, ensuring its durability.
- Jinko Solar: A top performer since 2014 in the PV Module Reliability Scorecard, Jinko Solar offer efficiencies between about 18 and 20.45 percent, and has proven the reliability and performance of their products.
Top 10 Most Affordable Solar Panel Brands
| # | Manufacturer | Model | Power (STC) | Price | Price per Watt |
|---|
1. |
Talesun |
TP660P-235 |
235W |
$183.30 |
$0.75 |
2. |
Canadian Solar |
CS6P-235PX |
235W |
$190.35 |
$0.81 |
3. |
Eoplly |
E156P/60-230W |
230W |
$204.70 |
$0.89 |
4. |
Eoplly |
E156P/60-240BB |
240W |
$213.60 |
$0.89 |
5. |
Eoplly |
E156P/72-280W |
280W |
$249.20 |
$0.89 |
6. |
Talesun |
TP660PB-240 |
240W |
$220.80 |
$0.92 |
7. |
Talesun |
TP660PB-245 |
245W |
$225.40 |
$0.92 |
8. |
Suniva |
MPV285 |
285W |
$262.20 |
$0.92 |
9. |
Jinko |
JKM-235P |
235W |
$230.30 |
$0.98 |
10. |
EcoSolargy |
ECO230S156P-60 |
230W |
$227.70 |
$0.99 |
What to Consider with Solar Panel Installation Costs
Not all solar PV systems are created equal, especially when it comes to price, and there are a few important factors shoppers should consider when exploring installation costs.
According to Tomlinson, equipment, including the solar panels and inverters, is a big part of the installation costs. She explains that there are two basic types of equipment, standard and premium. Standard panels include brands like Canadian Solar, one of her favorite brands. Premium equipment includes LG Solar or SunPower. These are more expensive, perform a little better and tend to pack more wattage per panel compared to a more basic brand. So, if space is a concern, the premium could be a good choice. Premium panels can also be more aesthetically pleasing.
In terms of performance, there aren’t huge differences between the two types of equipment. Most solar panels come with 25-year warranties and most inverters have at least a 10-year warranty.”
Depending on the solar installation company, a shopper may or may not be able to choose the type of equipment for their system. Tomlinson explains that larger companies, like SolarCity, will only install certain panel brands. Others have bought in bulk from a certain manufacturer and will encourage you to use that brand since they can offer it at a good price. Still yet, other, more boutique installers can do any kind of panel a shopper wants.
The second biggest factor that plays a role in pricing is installation labor, followed by permitting and inspection costs, and these all vary from state to state.
Tomlinson suggests the best way to gauge where a shopper is standing on price is to do their due diligence and get three to four bids.
Our experience shows that even today when solar is a more mass-market product prices are ridiculously different. I’ve seen anywhere from a $2,000 to $15,000 difference for the same system. Homeowners shouldn’t feel pressured to go with the first installation company that meets with them and they shouldn’t get dazzled by the glitz of a sales presentation.”
Karen lives in a rural community and is looking to install a 4 kW system. She doesn’t have a lot of neighbors and isn’t really concerned about curb-appeal. Her house is large and she has plenty of roof space. In Karen’s case, she can move forward with a more basic model solar PV system. She can expect to pay somewhere in the $12,000 range, pre-incentive.
Frank is also looking to install a 4 kW system. He lives in Orlando in a densely populated area. He owns a small condo with little roof space. The neighborhood he lives in has HOAs and he’ll need to get his design approved by them before moving forward with installation. He’s willing to pay more for a premium system that packs more wattage per panel and has a smaller footprint. He also wants one that looks all black from afar. Frank’s system can end up costing around $16,000, pre-incentive.
Other helpful resources to help get shoppers started:
A solar calculator developed with funding from the U.S. Department of Energy, Solar panel cost and savings customized to your location, utility company and the physical characteristics of your home.
Estimates the energy production and cost of energy of grid-connected photovoltaic (PV) energy systems throughout the world.
Summarizes installed prices and other trends among grid-connected, distributed solar photovoltaic (PV) systems in the United States.
Solar Panel Savings with Tax Breaks, Rebates, and More
Shoppers across the country are encouraged to deploy solar thanks to the many tax breaks, rebates, and other incentives offered by local, state, and federal governments.
The main tax break that shoppers should consider when calculating installation costs is the federal Investment Tax Credit. The ITC applies to both residential and commercial projects and was implemented in 2006. Since then, it has helped the U.S. solar industry grow by more than 10,000 percent.
Solar experts hope that the 30 percent tax credit will get extended but until then there is currently a drop-down in 2020 to 26 percent, and again in 2021 to 22 percent. However, Tomlinson notes that if shoppers at least “begin construction” in 2019 the 30 percent tax credit will still apply. Consumers can do this by either beginning actual physical work of a significant nature; or paying or incurring 5 percent or more of the total cost of the solar project.
Tomlinson notes that businesses can especially benefit from depreciation methods – these make qualifying solar energy equipment eligible for a cost recovery period of five years.
Many states and utilities also offer tax incentives and rebates. To find tax credits, deductions, exemptions, as well as rebates and other incentives, access the Database of State Incentives for Renewable Energy (DSIRE), the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States.
While incentives vary across the country, some examples include:
Austin Energy in Texas provides rebates to small, medium, and large commercial customers who wish to install photovoltaic systems. Incentives range from $0.02-$0.08/kWh.
The City of Philadelphia will give rebates for commercial or residential solar installations completed after July 1, 2019. These incentive payments will average $1,000 per home.
Iowa offers a 15 percent individual tax credit for solar energy systems. Specifically, the law allows individuals to claim a state tax credit worth 50 percent of the ITC. Each taxpayer may claim up to $5,000 for residential systems and $20,000 for commercial systems under this program, and any excess credits may be carried over for up to 10 years.
In South Carolina, taxpayers can claim a credit of 25 percent of the costs of purchasing and installing a solar energy system.
Top Five Shopping Tips for Affordable Solar Panel Installations in 2019
A solar PV installation comes with big benefits, but it’s no small feat. It takes a lot of hard work, research, and patience to find a good quality installer at the right price. Tomlinson, a solar expert with more than a decade of experience in the field, has seen the many pitfalls that consumers fall into when it comes to starting the solar installation process.
Here are her top five tips:
Tomlinson says the best thing consumers can do is shop around. Get at least three to four quotes from various installers. Most often, shoppers should pick the mid-range company. Red flags are, “If the estimate is too low, that company isn’t sustainable and if it’s too high, that company might just be ripping you off.”
Find out how long the company has been in business. Consumers want to make sure that they’re working with a long-standing, reputable business that isn’t going to go gone within a few years. Tomlinson has all too often seen installers go out of business, leaving system owners paying out of pocket for repairs or maintenance that should have been covered under the solar company’s warranty.
Ask the solar installer lots of questions and see how they respond. Tomlinson notes that solar technicians that work with you should be able to explain the system’s return on investment, the process of installation, as well as answer any questions about the specifications of the system.
Get references. A reliable solar company should be able to give the names and contact information for previous customers. Just like with any job interview, shoppers should be doing their homework and calling references to make sure the solar company does solid work.
Don’t get fooled by glitzy presentations or feel pressured by friendly salespeople. Tomlinson has seen consumers go with the first and only solar company they talk with based solely on a slick presentation. She’s also seen people feel pressured into taking the first bid since the presenter seemed like a great person and spent hours talking with them. Unfortunately, taking the first and only bid can mean spending thousands more than necessary.