The solar industry continues to shine as more homeowners realize that investing in solar panels can benefit the environment and their wallets. But before going solar and delving into this renewable energy source, it’s essential to understand the true cost of solar panels so you can decide which options suit your needs and budget.
Learn more about the cost of solar panels, what affects price, and the best ways to lower costs and fund your solar panel project with minimal upfront expenses.
How Much Do Solar Panels Cost?
Generally speaking, you can expect to pay about $3 per watt installed. However, your cost will vary by the type of solar panel you choose. On an average-sized solar panel system of 6 to 8 kW (6,000 to 8,000 watts), you can expect to pay around $18,000 to $24,000 or more.
The price includes the cost of the solar panels and equipment like inverters, mounting hardware, and batteries. Also wrapped up in this initial investment is the professional installation cost.
What Impacts The Cost of Your Residential Solar System?
The size of the system, the number of solar panels required, and the type of panels greatly influence how much you pay. Below, we take a closer look at these factors. However, before purchasing a solar panel system, be sure to accurately assess your energy needs and determine your goals.
Your best bet is to reach out to a solar panel provider to review your energy consumption and goals to determine the right-size system and how many panels you need.
Size & Electrical Needs
Two key drivers of the total cost of solar panels are the size and number of panels you require to meet your energy needs. The 20% rule is a helpful guideline that can help you avoid overspending by choosing a system that’s the right size for your home.
The rule suggests sizing your system to produce about 20% more energy than you typically use. This buffer covers cloudy days, seasonal spikes, and gradual efficiency losses as panels age.
Types of Solar Equipment
Not all solar panels are the same, and the type of solar panels you choose will impact your overall cost. There are three types of solar panels, each with benefits and drawbacks.
- Monocrystalline: Featuring solar cells made from a single (mono) crystal, these panels are the most efficient, often providing 15% to 22% efficiency. They also feature a sleek, black color that looks good in almost any setting. The main downside of monocrystalline photovoltaic (PV) panels is their highest average cost.
- Polycrystalline: These panels aren’t as efficient as monocrystalline solar panels (they rarely go over 17% efficiency), but they make up for that with a lower cost. Another downside of polycrystalline PV panels is that they’re more susceptible to heat-induced efficiency loss. Yes, solar panels need sunlight to generate energy, but excessive heat can reduce their efficiency.
- Thin-film: These solar panels have the lowest efficiency of available solar panel types, but they offer some unmatched benefits. First, they are lighter than other panels. Also, they are flexible in some cases, so they’re great for portable setups and rooftops that require the panels to bend slightly. They also usually cost less to install.
Credits & Rebates
While there used to be a federal tax credit covering up to 30% of the installation cost when you purchased a solar panel system, it expired at the end of 2025. Texas doesn’t have a statewide solar rebate or tax credit program, but there may be local utility rebates and solar buyback programs that can save you money.
Explore credits and rebate by state:
California | Connecticut | Florida | Illinois | Indiana | Maryland | Minnesota | New Jersey | New York | Ohio | Pennsylvania | Texas | Virginia
Pricing Solar Panel FAQs
Generally, producing your own electricity using only the sun’s rays will lower your monthly electric bill. If your electric company offers the option of net metering, you’ll get a credit on your bill if you fully offset your energy usage and put more power into the grid.
You have several financing options to make solar power systems attainable, such as solar loans and solar leasing. A solar loan is a specific type of loan that you get to finance your solar panels. In solar leasing, you rent the panels from a solar energy company for a monthly fee.
Another popular solar panel financing option is a home equity loan. With this loan, you borrow a lump sum and use your home’s equity as collateral.
A solar panel lease is a contract in which you agree to rent your solar panels for a set period, typically 20 years. You pay a monthly fee and avoid the upfront system cost, while the solar leasing company handles all the installation and maintenance costs. You get the energy savings of any other solar power.
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