Average Cost of Solar Panel Installation in 2024: Breaking Down the Numbers

Renewable energy has been gaining traction in recent years as a clean and sustainable alternative to traditional fossil fuels. Among the various renewable energy sources, solar power stands out as one of the most accessible and widely used options for residential and commercial properties alike.

As more and more people look to harness the power of the sun, it's important to understand the costs associated with solar energy systems.

In this article, we will break down the average cost of solar panel installation in 2024 and explore the factors that contribute to these numbers.

The cost of installing a solar panel system can be divided into two main categories: hardware costs and soft costs .

Hardware costs include solar equipment such as solar panels, mounting equipment, and inverters, while soft costs refer to labor, permits, and other administrative expenses.

Let's discuss the main costs associated with solar panel installation in more detail.

The solar panels' cost varies depending on the size and efficiency of solar modules. For instance, a monocrystalline solar panels can cost around $1 to $1.50 per watt, while a polycrystalline module may cost between $0.80 to $1 per watt.

A typical residential solar system will require around 20-25 panels, with each panel costing anywhere from $150 to $350. This means the total cost for solar panels alone can range from $3,000 to $8,750 .

The inverter is an essential component of a solar panel system as it converts the direct current (DC) electricity generated by the panels into alternating current (AC) electricity that can be used in our homes and businesses.

On average, inverters cost around $2,000 to $4,000 for a residential system. However, some high-end inverters can cost up to $10,000.

For solar panels to function properly, they need to be mounted on a sturdy and secure structure. This can be in the form of roof mounts, ground mounts, or pole mounts.

The cost of mounting equipment will depend on the type and size of the system. On average, it can range from $500 to $5,000 .

The installation process for a solar energy system requires skilled professionals and can take anywhere from one to three days to complete. On average, labor costs can range from $3,000 to $6,000 .

Solar panel systems require permits from local authorities which can cost anywhere from $500 to $2,000 . Additionally, there may be administrative fees for paperwork and inspections that can add another $1,000 to $2,000 to the total cost.

Based on the average cost per watt, and taking into account the size of a typical solar panel system (6 kW), the average cost of 6 kW solar panel installation in the US is around $17,852 .

However, this cost can vary significantly based on factors like solar incentives, location, type and size of the system, and available incentives in your area.

Note- To learn more about the incentives programs available in your area, check out Solar Energy Industries Association rebate and incentives guide.

Now that we have discussed the average solar panel costs for the country, let's take a closer look at the average cost of solar panel installation in each state for solar energy.

Alabama - $14,700

Alaska - $14,460

Arizona - $14,640

Arkansas - $18,360

California - $17,160

Colorado - $20,640

Connecticut - $19,320

Delaware - $16,500

Florida - $15,480

Georgia - $19,200

Hawaii - $16,020

Idaho - $17,580

Illinois - $18,960

Indiana - $21,780

Iowa - $20,700

Kansas - $14,340

Kentucky - $14,040

Louisiana - $19,020

Maine - $20,700

Maryland - $18,780

Massachusetts - $21,240

Michigan - $22,680

Minnesota - $20,700

Mississippi - $15,840

Missouri - $17,100

Montana - $14,520

Nebraska - $16,980

Nevada - $15,600

New Hampshire - $21,660

New Jersey - $17,700

New Mexico - $20,340

New York - $20,880

North Carolina - $18,240

North Dakota - $14,520

Ohio - $17,880

Oklahoma - $15,720

Oregon - $18,780

Pennsylvania - $18,360

Rhode Island - $21,660

South Carolina - $17,340

South Dakota - $14,340

Tennessee - $17,820

Texas - $16,620

Utah - $16,140

Vermont - $18,840

Virginia - $18,240

Washington - $19,500

West Virginia - $17,520

Wisconsin - $20,460

Wyoming - $15,420

There are several payment options available for those interested in installing solar panels:

Purchasing a solar panel system outright with cash is the most straightforward and cost-effective option. While it requires a larger upfront investment, homeowners can see long-term savings on their electricity bills.

Many lenders offer specialized loans for financing homeowner's solar power system. This allows homeowners to spread out the cost over a longer period of time and make manageable monthly payments on their residential solar panels.

With a PPA, a third-party company installs and owns the solar panel system and sells the generated electricity back to the homeowner at a fixed rate. This can be a good option for those who cannot afford upfront costs but still want to benefit from using solar energy.

Similar to a PPA, leasing involves renting the solar panel system from a company and paying a fixed monthly fee. In simpler words, homeowners pay a monthly fee to use solar panels installed on their property and owned by the lease provider.

However, unlike a PPA, the homeowner does not receive any credits or payments for excess electricity generated.

There are many factors that impact the overall cost of solar panel installation. These include:

The location of a property plays an important role in determining the cost of solar panel installation. States with more sunlight and favorable policies for solar energy tend to have lower installation costs compared to states with less sunlight and limited incentives.

As mentioned earlier, the size of a solar panel system can range from 4kW to 12kW or more. The bigger the system, the higher the cost.

The energy needs of a property also impact the cost of solar panel installation. A larger home with high energy consumption will require a bigger and more expensive system compared to a smaller home.

The type and efficiency of solar panels can greatly affect the overall solar costs. Cost of solar panels with higher efficiency may be more expensive but can generate more electricity, resulting in long-term savings on energy bills.

With the federal solar tax credit, many states offer solar incentives and rebates for installing solar panels, which can significantly reduce the overall cost of installation. It's important to research and take advantage of these opportunities when considering solar panel installation.

The type of roof a property has also affects installation costs. A simple and easy-to-access roof will require less labor to install solar panels and equipment compared to a complex or steeply-sloped roof.

To learn more about the factors influencing the costs and saving associated with solar panels, check out the guide on savings with solar panels.

The payback period for solar panels refers to the amount of time it takes for the cost of installation to be recouped through energy savings.

This can vary depending on factors such as location, system size, and energy usage. The National Renewable Energy Laboratory reports that it can take anywhere from 4 to 10 years for a homeowner to see a return on their investment in solar panels.

However, with increasing electricity rates and available incentives, this time frame can substantially decrease, making solar panel installation a long-term cost-effective solution for generating renewable energy.

Installing solar panels can be a smart and environmentally friendly choice for homeowners looking to reduce their carbon footprint and save money on energy bills.

While the upfront solar panel cost might seem daunting, there are various payment options and incentives available, that make solar energy more accessible. Additionally, with advancements in technology and increasing availability, solar panel installation is becoming more affordable and efficient than ever before.

So, it's worth considering as a long-term investment for both your home and the planet. So don't hesitate to explore this renewable energy option for your property today!