How Much Does It Cost for Solar Panel Installation in the USA

Are you planning to get your solar panel installed soon? Then, “How much does it cost for solar panel installation in the USA in 2025? Solar panel installation cost relies on system size, panel price, inverter, battery, mounting system, and other PV system components, and current market cost. The average residential and commercial solar panel system installation cost can range from $24,000 to $36,000 (for a home), $125,000 to $500,000 or more (for commercial).

Indeed, it’s tough to count the exact cost of solar panel installation. As the installation is complex enough, it is not a one-size-fits-all solution. There are so many factors connected to the installation process. A detailed breakdown of the factors will help you estimate the approximate cost of your solar panel installation.

In this journey, we will give you an attractive and profitable idea of the average residential and commercial solar panel installation cost. We will also introduce the factors affecting the cost and how to save money while installing your solar panel. So, let’s start.

How Much Does It Cost for Solar Panel Installation in Your State

The cost depends on the solar panel installation system size, number of panels, inverter, batteries, mounting, and location, like a PV system on a tile roof, concrete roof, etc. The average cost to install a home solar system in the USA can range from $24,000 to $36,000, including federal tax. Similarly, the commercial solar panel system average cost can range from $125,000 to $500,000 or more.

Latest Cost to Install Residential Solar Panels in different States

The cost to install solar panels in different states in the United States of America varies from time to time. In that the best way is to check the market or justify the marketing trend, like solar panel price, inverter cost, battery cost, mounting system cost, solar panel netting cost, etc. However, according to our recent observation and market research, we have shown a residential solar system installation pricing based on a specific KW per price in any specific area. So, let’s take a look.

Latest Cost to Install Commercial Solar Panels in Different States

The average commercial solar panel installation cost in Q3 2024 was $1.44 per watt DC, a 12% decrease from the previous year. According to the Solar Energy Industries Association (SEIA), the main reason for the fall was a 35% drop in solar module prices. It averaged $0.31 per watt DC throughout the same time. In 2025, the average commercial solar installation cost is around $1.46 per watt DC. So, commercial sectors should invest around $125,000, $140,000 to $500,000 or more to open a solar panel business. It will also depend on system size and energy requirements. 

Labor Cost to Install Solar Panels in the USA 

A 5 kW solar energy system, consisting of 15 to 25 panels, costs approximately $30,000. The average labor cost for installation is $0.59 per Watt. On average, the labor cost is around 10% of the entire system cost. In this case, the labor costs for installing a 5kW solar energy plant are $3,000. This cost includes both the electrician installation and non-electrician labor costs. However, labor costs for installing solar panels vary based on the weather, the energy production, and soft costs.

Average Cost to Install Commercial Solar Panels by State

As of late, the average cost of installing solar panels in the United States is $2.84 per watt. A typical 6 kW household system costs roughly $17,040 before incentives. After applying the 30% federal solar investment tax credit, the net cost is around $11,928. Also, prices vary depending on system size, equipment quality, and local labor costs which will be discussed below.

Cost Breakdown of Solar Panel Installation: What are you paying for?

You already know that installing a solar panel involves spending a lot of money. So, you must know what you are paying a massive amount for. Here are the most common spending areas for installing solar panels.

• Solar panels: They are the central equipment for converting sunlight into direct current. Panel costs consist of less than one-third of the installation expenses.
• Inverters: Inverters convert direct current into alternating current (AC) to power home appliances. They can cost as much as the panels themselves, depending on the quality. String solar inverters are cheaper, while micro-inverters and optimized inverters are much costlier.
• Racking and Mounting Systems: Mounting systems ensure your panels are strictly and optimally positioned. They are a minimal portion of the installation cost. 
• Wiring: This is the cost of connecting your rooftop system to the grid and electrical panel. It can add a few to thousands of dollars to the price.
• Labor and installation: Labor is one of the most variable expenditures in solar installation. However, this cost is excludable if you choose portable solar panels or go for DIY installations.
• Battery Storage (Optional): If you want to store the excess energy for the cloudy or stormy days, you must also pay for the battery.

Additional Cost Considerations

Apart from the deal breakers of the solar panel installation cost discussed above, some potential expenses can slightly affect the installation cost. So, you must include them in your budgeting. They are,

• Permit and inspection fees: You may have to pay local governments for permitting and inspection. The costs can vary depending on where you live, from $100 in smaller towns to over $1,000 in larger cities. Some state regulations cap permitting fees. Also, you will have to pay for interconnection if you take a grid-tied solar power system off-grid.
• Advanced monitoring systems: Your upfront cost will be added if you upgrade from basic to advanced panel-level monitoring.
• Tree removal or trimming: You may need professional tree trimming to prevent shading above the panel. The additional cost will depend on the trees’ size, number and complexity. Removing or pruning large trees that shade your roof can range from $300 to $1,500.
• HOA requirements: Sometimes, meeting specific aesthetic or necessary guidelines is necessary in communities like homeowner’s associations. So, you must pay extra for custom panel layouts or additional screening.
• Home insurance adjustments: Though most insurance policies cover solar panels as a built-in part of the home structure, sometimes they may slightly increase your insurance premium.

How to Calculate the Cost of Solar Panel Installation Using a Solar Panel Installation Calculator?

The solar system cost calculation is important. However, you should remember that many variables influence the cost of solar panels. The online calculators assume the variables that are not always accurate while calculating. For example, the rise of the utility rates over the last 25 years is a significant factor.

• Firstly, choose a convenient online solar cost calculator. 
• Then, enter your address, average monthly electricity bills, roof type, age, shade condition, residential and commercial factors, etc. 
• They can also request additional information. Then, you will get an approximate cost estimate for your solar panel installation.

Indeed, most calculators approximate 3 to 5% yearly inflation based on historical averages, but it is uncertain. So, blindly depending on an online calculator may not be a wise decision. You should break down the factors and calculate the overall cost. Don’t worry, it’s easy, and we will give a proper guideline below.

8 Factors Impacting the Cost of Solar Panel Installation

Here are the most common factors behind the varied cost of solar panel installation.

1. Panel Type

There are several types of panels, and they can influence the cost directly. Here is the cost comparison between different types of solar panels,

• Monocrystalline Solar Panels: They are the most popular and expensive solar panels. Monocrystalline solar panels cost $1 to $1.50 per watt produced. These panels ensure a better electricity production with a higher efficiency rate of 20-24%. They are space-saving and have the least carbon footprint.
• Polycrystalline panels: Polycrystalline panels are cheaper. However, they are less efficient than the previous type. They cost $.90-$1 per watt produced. Their efficiency is 13%–17 %, which balances cost and output. 
• Thin-film solar panels are also less efficient and have a shorter lifespan. They cost $1 – $1.50 per watt with 7-15% efficiency. 
• Bifacial Solar Panels are costly because they capture sunlight on both the front and back sides for the best energy production. Their efficiency can exceed 30%. These panels cost $0.80 – $1.10 per watt.

2. Panel Quality

Apart from the type, the quality can also impact the overall cost. It includes panels brand, efficiency and output ratings. The quality, warranty and pricing structure make one brand of panels different than the others. The high-quality and branded solar panels cost way more than the non-branded solar panels.

Also, panels that produce more watts of power tend to cost more. They cost more for their efficiency and power for their size. Premium-quality solar panels cost up to 25% more than standard solar panels.

3. System Size, Number and Energy Usage

The size and number of solar panels can significantly impact the installation cost. And the size and number of panels you need will depend on your energy usage. To calculate this, determine your kilowatt per hour (kWh) usage from your latest electricity bill. Then, divide the number by 1200. The result will give you a rough estimation of the system size you need.

Other cost affecting factors are the shape of the roof, sunlight angles and installation design. The larger and complex the system, the higher the cost. However, the larger panels have an average lower cost because soft costs are distributed across more total watts. If you need more panels, it will occupy more space, weight and labor cost and increase the overall cost. 

4. Location

Your geographical location can significantly influence the solar panel installation cost because different states have different types of sun exposure, energy demands, incentives, labor costs, permitting and inspection costs, etc. For example, an area with good sun exposure helps the solar panel meet the energy needs and cut the overall cost. In this case, sunny states like California, Florida and Arizona are the winners.

Also, labor costs can differ significantly by location. States like California, New York, and Massachusetts have higher labor costs. On the other hand, Texas, Florida, and Arizona have lower labor costs for the growing solar markets. Incentives also vary. California, New York, New Jersey, Washington D.C and Massachusetts have higher incentives than the other states. To understand what is available in your area, check out the DSIRE database, a free, comprehensive resource for solar incentives by state.

Lastly, permission and inspection costs vary by location. Urban areas have greater permitting costs due to stricter building rules, higher labor costs, and more complex utility interconnection processes. In contrast, rural locations may have lower fees.

5. Solar Equipment

The type and brand of solar equipment can increase or decrease the cost. Premium equipment has higher upfront costs but ensures more extended warranties, better efficiency, and durability for good savings. Here are a few solar equipment items and their prices. 

• Inverter: Their price depends on their size and efficiency. Generally, you can get them between $1,000 and $3,000.
• Mounting system: The system generally costs between 7 and 20 cents per watt.
• Electrical wiring and hardware: Electrical wiring and hardware cost too little. It ranges from 10 to 20 cents per watt.
• Optional equipment: Additional equipment, like Critter guards, costs about $400. Another optional equipment is costly, costing $7,000 to $18,000. 

6. Purchasing Method

Your purchasing method can make or break your installation cost in the short and long term. Cash as a payment method helps avoid further interest on the overall system price, so it will help you save the most in the long run. On the other hand, a solar panel loan or any kind of installment will save you from the high upfront cost. 

You will have to pay up to 47% more than the cash value of a solar system. Your loan terms will determine how much more you’ll pay. The added interest will result in a much higher overall cost in the long run. Lastly, solar leases or power purchase agreements will not require upfront fees. However, there will not be any ownership or other economic privileges.

7. Installer

The solar installer you pick to install your system can significantly impact your pricing. Each installer has its own installation process and pricing structure. These depends on the solar panel company’s established status, the margins it must meet, and the equipment it uses. Remember, costly installers are not always the best installers. So, consider both the cost and the value received for that expense. 

8. Roof Type and Installation Method

The most common placement for solar panels is on the roof. The roof’s position, tolerance, space, shape, and orientation will impact the installation process, increasing or decreasing the cost. Also, the more direct sunlight your roof receives, the fewer panels you need to pay for your electricity expenditure. Installing solar on your home will be affordable and simple if you have a south-facing roof that slopes at a 30-degree inclination. 

If your old home roof cannot sustain the weight of the panel, you will have to pay extra for structural reinforcements. The pitch angles of your roof significantly affect installation complexity and professional labor prices. Complex roofs with multiple faces, dormers, vents, or skylights need additional labor, time, specialized hardware, or structural adjustments. It can increase installation and labor costs. For example, PV system for tile roof or metal roofs need extra mounting equipment to install the panels safely and securely. On the other hand, a simpler and easier-to-access roof has a lower installation cost.

How Should You Pay for Solar?

There are mainly for payment methods for solar panel installation payment. You can choose them according to your financial abilities and convenience.

1. Purchase it with cash

Cash payment is the simplest and the most cosmetically costliest option. Here, you will not have to pay financing fees or need any credit check. So, your total system cost will be the lowest. Also, you won’t be paying the approximate $5,000 in interest that you would with a loan. This means your panels will maximize the ROI and make the utility bill savings the quickest. The shortest panel payback period means the most significant long-term savings.

Additionally, you will get full ownership to avail of solar incentives. However, the drawback of a cash purchase is that it is a one-time payment. So, it’s the least accessible option as not everyone can afford the $22,880 average system price up front. The best long-term savings will come from a cash purchase if you can pay for your system up front and have a sizable enough tax bill to qualify for the ITC. 

2. Take out a solar loan

Compared to cash purchases, solar financing is far more accessible. With a loan, you can pay for the system up front and then pay it back over time in payments. Many solar loans don’t require a down payment. Many lenders also keep your monthly payment below your average monthly energy expenditure, currently approximately $134.07. It further facilitates loan accessibility. The benefit of panel ownership is still present in loans. Therefore, you can pay off your panels even sooner with the government credit. 

One drawback is that you will have to pay interest and dealer fees on the loan. So, the overall costs are typically greater than with cash systems. As a result, it will extend your panel payback period. Additionally, you will need at least respectable credit to apply for and be granted a loan. 

3. Manufacturer Financing

It is a direct loan from the solar panel manufacturer or a connected lender for the purchase and installation of solar systems. You can pay over a specific period in manageable monthly installments. The manufacturer will take care of the installation. But don’t worry, you will get ownership of the system with tax credits and other benefits. 

Numerous financing programs offer adjustable terms according to customers’ budgets. They also offer incentives like rebates or low interest rates. However, you should carefully read the loan conditions, interest rates, credit standards, and any possible tax ramifications. 

4. Solar lease or Power purchase agreement (PPA)

A solar lease or power purchase agreement (PPA) lets you get solar energy without purchasing the installation. A lease needs a predetermined monthly cost to use the panels. In contrast, a PPA charges you for the electricity generated. It is often lower than your utility bills. Both choices usually need no down payment and include maintenance services. So, they are perfect if you do not have a tax credit or do not want to deal with system maintenance.

However, these options offer the lowest long-term savings. Also, leases frequently include cancellation fees, making it difficult to sell your property. Lastly, while land leases for PV system and PPAs provide low initial costs and convenience, they have limited financial benefits and no system ownership.

5. 6 Overlooked Costs of Solar Panel Installation

Now we are going to answer another common question, “Is there any hidden cost in solar panel installation?”. Of course, there are hidden costs. The common hidden costs of solar panel installations are, 

6. Solar panel maintenance costs

The cost of solar panel cleaning and inspections can add to the installation cost. However, most panels come with 25-year inspection warranties to reduce maintenance costs. However, some tasks, such as trimming trees or cleaning in polluted areas, may not be covered. Annual maintenance like cleaning dust, trimming shade trees, and checking connections can average $450–$780 per year in the US, with cleaning a typical 20–25 panel system around $300–$630. The cost is roughly £100–£250 in the UK. 

7. Financing fees

In a solar loan, you must pay dealer’s fees ranging from 20% to 50% of the installation price. It can vastly increase the overall expense. On the other hand, leases/PPA contracts often include less obvious charges. For example, many PPA/lease agreements lock in a flat monthly rate with annual “escalators” (price increases) to match rising utility costs. Thus, hidden interest, loan fees or penalties can add thousands over 20–25 years.

8. Roof replacement costs

If your roof is older than 10 to 15 years or in poor shape, you will go through roof repair or replacement at any point of solar panel installation or usage. Because, 

Solar panels last 25–30 years, so your roof must support them for that long. The cost of a new roof plus a new solar system costs about $25,000 to $30,000 (combining labour and materials costs). In different markets, the numbers vary. A roof replacement in the US might range from $5k to $15k, depending on size and materials. On the other hand, in Australia or the UK, a full reroof might be on the order of a $8k–12k, or £5k–10k. 

9. Electrical panel upgrades

Many installers recommend at least a 200-amp panel for a new solar array. If your panel is smaller or outdated, upgrading the wiring or main breaker can add a few thousand dollars to the project. Depending on your current setup, upgrading the panel can cost between $2,000 and $3,000 in the UK. Similar upgrades in the UK and Australia also incur extra electrician fees. 

10. Inverter replacement

Unlike solar panels, which last 25+ years, most solar inverters are warranted for 10–15 years. Manufacturers usually cover inverter replacements under warranty. However, labor costs for inspection and repairs may still apply depending on your coverage. In the US/Australia, a string inverter can cost $1,000–$2,000 plus installation. On the other hand, Micro-inverters (one per panel) can cost ~$150–$250 each. In the UK, it costs about £500 to £1,500. So replacing them can run into several thousand. 

11. Solar panel repairs

Though durable, panels can incur damage. In many cases, minor repairs are inexpensive. For example, resealing a panel frame or tightening connections may only cost tens of dollars or pounds. But if a replacement is needed, like shattered glass or a failed cell, it can exceed $1,200 to $2,000 in the US and £1,000 in the UK. 

12. Solar Panel Cost vs. Return on Investment (RoI)

The high installation cost may make you ask, “Is solar panel installation worth it?” But you will be assured after knowing about the massive ROI of solar panel installation. Here are some of the benefits of owning solar panels.

13. Energy Independence

One of soar’s top benefits is reducing reliance on the utility grid. Solar grants homeowner’s energy autonomy. Solar battery storage in the USA can provide backup during storms or grid failures. So, it will keep your home powered through typical outages. Also, the net-metering rules in most US states credit excess midday solar to lower your bills in the evening or winter. In the UK, solar can cover a significant portion of summer electricity. So, you can stay assured of your own energy supply most of the time.

14. Reliable Performance

Most high-quality panels come with 25-year performance warranties without any notable degradation. A study by NREL shows that output typically falls by 0.5–0.8% annually. So, after 20 years, a panel still produces around 85–90% of its original power. A well-installed PV array delivers consistent output and is “set and forget.” Their hail impact ratings and high wind/gust certificates indicate they can tolerate harsh weather. Also, panels even self-clean with rain in snowy or rainy climates. Cherry on top? Warranties cover most of the unexpected failures.

15. Increased Home Value

Installing solar panels can boost property resale value because buyers want a green, energy-efficient home.  In the USA, Lawrence Berkeley Lab (DOE) research found that homes with Photo Voltaic cell for a premium, averaging about $4 per watt installed. In the UK, the effect is more modest but positive. Industry sources suggest solar panels can increase a home’s value by roughly 5–7% on average. So, solar often makes homes more attractive and quicker to sell.

16. Environmental Benefits

Across regions, solar cuts carbon emissions and pollution. Every kilowatt-hour from rooftop PV replaces the toxic coal, gas or imported nuclear. The UK’s Energy Saving Trust estimates an average home solar system saves 1 tons of CO₂ annually. Moreover, solar helps reduce local air pollution.

Extensive adoption of solar can also stabilize the grid’s carbon intensity. In the UK, solar supplies 4% of annual electricity and up to 30% in summer peaks. Thus, they significantly cut fossil fuel generation on sunny days. So, this creates a longer-term return in environmental preservation and public health.

How Can I Lower the Cost of Solar Panels?

There are some essential factors that can directly assist you in reducing the cost of installing a solar panel system at your home and commercial area in the United States, the United Kingdom, Canada, Germany, Bangladesh, and other countries. So, let’s check them.

Solar Incentives

You should always search for the available incentives because they make solar panel installation more accessible. First, solar incentives are offered by federal, state, and local governments, in addition to utility providers. Till 2032, if you install residential solar panels in the USA, you can get the 30% federal solar tax credit known as the Solar Investment Tax Credit (ITC).  So, if your system costs $25,000, you can save up to $7,500. Before ending in 2035, it is expected to drop to 26% in 2033 and 22% in 2034. 

Additional incentives for home solar systems include tax credits, tax exemptions, and rebates in several states. For example, New York offers a NYSERDA rebate, a 25% state tax credit, and exemptions from sales and property taxes for solar installations. At the local level, there are incentives for solar panels, battery storage, and other energy-efficient home improvements.

Generally, city governments, municipal utilities, and investor-owned utilities offer the incentives. So, always spend some time looking for solar incentives from your utility company, state, county, and city. Some of the common incentives are: 

• Protection against rising energy costs and independence from your utility company.
• Commercial projects can use the 30% federal tax credit to recover taxes due from the previous three years.
• Accelerated depreciation for Businesses and farms to offset higher tax liabilities.
• 50% USDA Reap Grant for farmers and rural businesses.
• Several local government and utility incentives.

Compare Multiple Quotes

In most states of the United States, at least a few solar installers are eager to compete for your business. They offer different packages, equipment options, and financing schemes. You should get a quote from at least three reliable installers. It will give you an idea of a realistic price, filter out scammers, and give you leverage to negotiate a cheaper price. 

Some companies can also offer discounts or special promotions, whereas others may offer more complete warranties or free additional services. Ensure each quote includes extensive information regarding the planned solar panel system, including equipment specifications, installation costs, warranties, and financing alternatives. Don’t be afraid to ask questions or get clarification on any vague parts of the quotes. 

Finding the Best Deal

Ultimately, the goal of comparing quotes is to get the best deal on solar panel installation. This does not necessarily mean selecting the cheapest choice. Rather, it means determining the best value for your investment. So, when assessing quotes, consider equipment quality, installation experience, and warranty coverage. You should also review the evaluations and continuing maintenance support to make the best decision. 

Conclusion

We hope now you know how much does it cost to install a solar system in the USA. The cost is so much variable as it depends on so many factors like panel type, installers, location, labor cost, payments system etc. Also, you should never ignore the hidden costs while budgeting. Having a clear idea about the convenient PV system installer company and payment method can help you a lot in this journey. We have covered everything you should know about the solar panel installation cost and how to save your money. So, take this as a comprehensive guide to make your installation process a bit affordable and hassle-free. Good luck.

How Much Do Solar Panels Cost in Texas?

The average Texas homeowner needs a 13.72 kW solar panel system. It costs $28,586 before subsidies. Prices range from $24,298 to $32,874, but after the federal tax credit, that decreases by 30%. Some utilities in Texas also provide local incentives. So, the cost may be further lowered.

How Much Does It Cost for Solar Panel Installation Per Square Foot?

Solar panels cost an average of $8.77 per square foot after the incentive. However, the cost per square foot varies depending on the size of the home. It will also depend on the specific elements involved in each installation.

How Much Do Solar Panels Cost for A 1,500 Square Foot House? 

The perfect solar array size for a 1,500-square-foot home is a 4 kW (4000-watt) system that produces 16 kWh daily. The total cost of purchasing and installing a 4kW system ranges from $12,000 for budget components to $16,000 for premium components. The approximate price is $3-$5 per watt. 

How Much Do Solar Panels Cost in California in 2025?

The cost of solar panel installation in California is comparatively high because of the high labor costs. The average system size here is 7.2 kilowatts (kW). It equates to installing 18 400-watt solar panels. As of May 2025, the average cost of solar panels in California is $3.14 per watt, with a typical installation costing approximately $22,600 before subsidies. The total cost can be reduced to $15,820 after the first year when paired with the federal solar tax credit.

How Much Do Solar Panels Cost If I Go Solar in 2025?

Solar panels cost $3.03 per watt on average if purchased cash, and $3.70 per watt if financed with a solar loan. An average 7.2 kW system costs roughly $21,816 in cash or $26,604 with a solar loan.

How Much Do Solar Panels Cost If I Do A DIY Installation?

You will have to spend $9,000 and $15,000 if you chose DIY installation. However, the system size and the availability of your equipment can affect the amount. When you install solar yourself, you save on paying labor costs, client acquisition fees, and installer profit margins. However, installing solar panels is risky. It can also void your warranties and prevent you from connecting to the grid.

How Much Do Solar Panels Cost If I Buy Used Solar Panels?

Used solar panels will cost less than new ones. According to secondary solar market specialists, old panels typically cost between $0.05 and $0.60 per watt. However, we do not recommend using them to power your home. Used solar panels are unlikely to be protected by the manufacturer’s guarantee and negatively impact performance.

What Incentives Are Available for Solar Installations in 2025?

In 2025, the Federal Solar Investment Tax Credit (ITC) offers a 30% incentive for residential and commercial installations through 2032. Furthermore, states such as New York and California provide additional refunds, grants, and property tax exemptions based on your location.

Where Should I Search for The Available Incentives in My Area?

To find incentives available in your area, visit the Department of Energy or the Energy Star website. They offer tools to search for rebates, tax credits, and other financial assistance for renewable energy upgrades. The Energy Commission and PG&E also offer specific programs for income-eligible households and businesses. 

Disclaimer

A comprehensive budget before solar panel installation can lessen the hassle of the process. For this, having a clear idea about the overall cost of solar panel installation is very crucial. That’s why we have provided the approximate solar panel installation cost by state here. We have also discussed the factors that increase and decrease the cost and how you can save money while installing solar panels. So, you must go through the complete overview of the solar panel installation cost before planning your installation process.