How Much Do Solar Panels Cost? A Full Guide to Solar Pricing

How much solar panels actually cost depends on multiple factors, including location, installation, and the type of solar system.

Additionally, prices vary from one provider to the next. To compare multiple offers, you need to look into the cost of solar panels per watt.

However, you shouldn’t base your choice of solar energy company on the price alone—you should also consider their expertise and equipment quality. For example, Portable Sun offers a wide range of products, from inverters to solar batteries, while also providing installation services.

In this article, we’ll discuss the cost of solar panels more closely, elaborating on solar system financing options and solar panel installation costs. Let’s begin!

Is Solar Energy Worth It?

Solar energy is worth it, especially nowadays, when the price of solar panels has significantly declined over the past few decades. The reason behind this is that the industry has evolved over time and reached a higher level of production globally.

Additionally, utility electricity rates have been rising, making solar power a more budget-friendly option than ever.

Americans are becoming increasingly aware of this fact—according to the 2023 Heatmap Climate Poll, 13% of US adults already rely on sunlight to power their homes, while 46% of them plan on doing so in the future.

Since 2010, residential solar system pricing has dropped by approximately 50%. In addition, solar installations in the US have increased by more than 2,000%.

While prices rose slightly between 2020 and 2023, this was mostly due to the supply chain complications caused by the pandemic. This trend is unlikely to continue, especially with local manufacturing plants going online—solar prices in the US are expected to stay on a downward trajectory in the coming years.

In fact, in many parts of the world, large-scale solar systems cost much less than other energy production methods, promising more eco-friendly power generation worldwide.

How Much Do Solar Panels Cost?

Nowadays, the best monocrystalline solar panels cost between $1 and $1.50 per watt. Therefore, the price of a single 400-watt solar panel ranges between $400 and $600, depending on where and how you buy it.

If we compare monocrystalline and polycrystalline solar panel costs, the latter variant is cheaper at $0.75 per watt or $300 for one 400-watt panel. Depending on the provider and payment method, polycrystalline panels can be twice as cheap as monocrystalline solar panels.

However, the differences between the two go beyond pricing. Namely, polycrystalline solar panels are less efficient, as their irregular structure limits their ability to capture sunlight and convert it into electricity.

That said, to put things in perspective, the cost of both monocrystalline and polycrystalline panels used to be much higher around ten years ago. The price of monocrystalline panels ranged between $3 and $4 per watt, while polycrystalline solar panels typically cost $2.50 to $3.50 per watt.

As previously mentioned, the cost of a solar panel doesn’t depend solely on whether it’s monocrystalline or polycrystalline—it also varies based on how you buy it.

Namely, if you choose a full-service installer, such as Portable Sun, the price per panel will likely be lower than buying them individually from a retail store. On top of that, you’ll have the complete system professionally installed, including the solar inverter, battery, solar generator, charge controller, mounting equipment, and wiring.

It’s also noteworthy that the cost of a solar panel is less than 20% of the cost of its installation. Therefore, choosing a cheaper product won’t save you much money, and you’ll end up with a lower-quality panel.

Solar Price per Watt

Solar price per watt is what you should consider when comparing offers from multiple providers. This number typically ranges from $3 to $5 when you don’t count deductions such as the 30% tax credit. Therefore, the gross cost of a solar system of 5,000 watts (or 5 kW) would be between $15,000 and $25,000.

That said, the price per watt is typically somewhat lower for larger and simpler projects—between $3 and $4. When you count in rebates and tax credits, the price drops even further.

Still, the following factors can increase the solar price per watt, bringing it into the $4 to $5 range:

• Unusual layout or roof material
• Premium inverter and panel models
• Smaller system size
• Extra work, including roof repair, trenching, and panel box upgrades
• Multiple arrays compared to a single array

You can calculate the solar price per watt by dividing the gross cost of a solar system by the number of watts in it. For example, the price per watt of a $20,000 system with 24 250-watt panels is $3.33 ($20,000 / 24 panels x 250 watts).

This is useful when you need to decide on a solar quote, as these may vary depending on solar panel brands and total wattage, among other things.

Now, let’s draw a parallel between solar price per watt and the cost of solar panels per kilowatt-hour:

Cost Per Kilowatt-Hour

Cost per kilowatt-hour is the measure you should look into when comparing the price of solar energy and traditional energy sources.

As opposed to solar price per watt, which depends on the system’s size, cost per kilowatt-hour pertains to the system’s production. It’s calculated by dividing the net cost of the system by the total amount of electricity it’s expected to generate over its lifetime.

For instance, if the net cost of a solar system that’s expected to produce 150,000 kilowatt-hours (kWh) of electricity is $10,500, its cost per kilowatt-hour is $0.07 ($10,500 / 150,000 kWh).

Cost per Square Foot

Yet another way to estimate the cost of solar panels is to consider the square footage of your house. Once you factor in the 30% tax deduction, the cost of solar panels per square foot is roughly $8.77.

That said, this number largely varies depending on the square footage of the house. For example, the price for a 1,500-square-foot house is $12.83 per square foot. Meanwhile, the cost of solar panels for a house of 2,500 square feet is significantly lower—$7.96 per square foot.

5 Key Factors that Impact the Price of Solar Panels

The factors that impact the price of solar panels include location, the size of the solar system, installation, permits, and types of solar panels.

Let’s explore them in more detail:

#1. Location

Where you live plays an important role in the cost of solar panels. For example, in sunnier places such as Texas, solar panels can produce more electricity. As a result, fewer panels are needed, which, naturally, lowers the overall cost of the system. However, other factors, such as local labor and permitting fees, also impact the cost of solar panels in Texas.

In contrast, colder regions, like Canada, typically need more panels per building to compensate for lower sunlight levels. This increases the initial investment, making the cost of solar panels in Canada generally higher.

That said, location doesn’t impact the cost of solar panels because of the climate alone. Namely, it also affects installation expenses, including transportation and regional labor rates.

#2. The Size of the Solar System

The cost of a solar system increases with its size. This is because a larger system contains more panels, which means more materials and more installation labor. However, the price is only higher upfront—a bigger system can generate more electricity, which results in greater long-term savings on energy bills.

For example, a three-kilowatt solar system is enough for a smaller home, but for larger houses with high energy usage, an 11kW solar system is a more suitable option.

The size of the system also determines how much roof space is required, which impacts the installation cost and the number of panels needed.

With all this in mind, you should also take into account that larger systems often cost less per panel due to bulk pricing. In other words, if you buy more panels at once, you’ll pay less for each.

#3. Installation

Installation costs depend on multiple factors, such as the complexity of the job, the size of the system, and the type of surface. For instance, a simple installation on a flat roof is cheaper than one on a steep roof with shade. The latter not only calls for extra labor but also specialized mounting equipment, which naturally increases the overall price.

For example, systems involving ground mounts require additional components, such as framing and supports. Labor rates also make a difference; they vary depending on the region. In urban areas, where the choice of providers is ample, installation generally costs less. Meanwhile, in rural or remote locations, labor costs are likely higher.

#4. Permits

Permits are an essential yet often overlooked factor in solar panel pricing. They ensure your solar installation is in accordance with local building codes and safety standards, and their price largely depends on where you live.

In areas with streamlined solar policies, these permits are easy to obtain and thus generally inexpensive. In contrast, in places with less experience with solar energy or stricter regulations, they can add a significant amount to the total price.

On top of the permit fees, there may be inspections, which can further increase the overall cost.

As for the permitting process itself, it may be part of your solar installer’s service. In that case, this expense will be included in the installation cost.

#5. Types of Solar Panels

The price you pay upfront primarily depends on the type of solar panels you choose. As previously mentioned, monocrystalline panels are pricier than polycrystalline ones, but they’re also more efficient. For this reason, they typically prove to be a better option in terms of saving in the long run.

Yet another option is thin-film panels, known for their flexibility and lower price. However, they’re less durable and, like polycrystalline panels, produce less electricity.

4 Main Options for Purchasing Solar Panels

Options for purchasing solar panels include cash, loans, government incentives, and solar leasing or power purchase agreements (PPAs).

Let’s look into them more closely:

#1. Cash

Paying in cash is the simplest way to buy solar panels. It’s also the most cost-effective option in the long run. This is because when you pay upfront, you avoid interest rates and loan fees, which means you’re essentially paying only for the system and its installation.

While the initial cost can be high—typically between $15,000 and $25,000 for residential systems—it eliminates ongoing financial obligations so that you can immediately start saving on energy bills.

What’s more, paying the full price in cash often qualifies you for tax credits and rebates, which can significantly lower the net cost. It also means you fully own the system from the get-go, so you’re not tied to contracts and financial terms.

#2. Loans

Loans are a very popular option for homeowners who want to go solar but can’t afford to pay for the whole system and installation upfront. With a loan, you can finance the cost of solar panels and pay it back over time, often in monthly installments.

Solar loans typically have lower interest rates, which is an important perk. Many banks, credit unions, and solar companies offer loans specifically for solar energy systems.

Another key advantage of a solar loan is that you’ll still own the system despite not paying for it upfront, which means you can benefit from tax credits and rebates on top of energy savings.

#3. Government Incentives

Government incentives play an important role in making solar energy more affordable. The most common such incentive is the federal solar tax credit, which allows you to deduct 30% of your solar system’s cost from your taxes.

In addition to federal solar panel tax incentives, you may expect rebates or additional tax breaks, depending on your residence state. For example, some areas offer performance-based incentives, which reward homeowners based on the energy their systems produce.

#4. Solar Leasing or Power Purchase Agreements (PPAs)

With solar leasing and power purchase agreements (PPAs), you don’t need to pay for the system—only for using it. As the term “lease” suggests, these options don’t imply ownership of the panels installed on your roof.

If you opt for a lease, you’ll be charged a fixed monthly fee. Meanwhile, with a PPA, you’ll pay for the electricity the system generates, usually at a rate lower than your local utility.

Whatever option you choose, you won’t have to worry about repairs and maintenance, as the solar company will take care of these. However, you won’t qualify for solar tax credits or rebates since you won’t be the owner of the system.

How Much Money Can You Save With Solar Panels?

Exactly how much money you can save with solar panels depends on several factors, such as:

• Your energy goals
• Electricity consumption in your household
• How you finance your system
• Your local utility electricity rates

Needless to say, these factors largely vary from one household to the next. In general, if you pay for the system with cash, you’ll save the most in the long run—most likely more than $50,000. However, it will take several years (typically between six and eleven) before your investment pays for itself.

On the other hand, if you take out a solar loan, you’ll enjoy early financial benefits, as your solar loan payments will be lower than your average electricity bills. Still, this option involves interest rates, which will erode your lifetime savings, resulting in a higher long-term cost of your solar system.

Final Thoughts

The answer to the question “How much do solar panels cost?” depends on several variables, such as your location, the size of your solar system, installation rates, permit fees, and the type of solar panels.

The cost also varies depending on the payment option you choose. If you choose to pay in cash, the initial price will be larger, but you’ll have full ownership of the system and enjoy tax credits and rebates. Alternatively, if you take out a loan, interest rates will add to the overall price of going solar.

Still, regardless of the pricing differences, solar power is undoubtedly a more budget-friendly option than other energy production methods, especially since the cost of electricity went up. Over time, the savings on energy bills and environmental benefits make solar an investment that truly pays for itself.

How Much Do Solar Panels Cost FAQ

#1. How much would solar panels cost for a three-bedroom house?

Solar panels for a three-bedroom house would cost $20,412 on average after claiming the 30% tax credit. However, the number of bedrooms doesn’t accurately determine the cost of a solar system. Its price depends on its size, among other factors, which is based on electricity consumption.

#2. How long does it take for solar panels to pay for themselves?

It typically takes six to eleven years for solar panels to pay for themselves. However, this time frame depends on many variables, including the size of the system, the type of panels, and the payment option you choose.

#3. Is one solar panel enough to power a house?

One solar panel isn’t enough to power a house, as it only produces enough energy to run several small appliances. US homes typically need ten to twenty panels to cover their electricity consumption fully.

#4. Can I run AC on solar panels?

You can run AC on solar panels, but you’ll need a system large enough to meet its power needs. To ensure it works at night and during cloudy days, you should make sure to add battery storage.