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Key Points
- The average cost of residential solar has decreased by about 69% since 2003.
- The Residential Clean Energy Credit is a 30% tax credit off the cost of a solar system through 2034.
- In 2004, solar panels cost $10.28 per watt, compared to $3.25 per watt in 2024.
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The cost of residential solar
Installing solar panels on your home is not as expensive as it once was. According to Solar Energy Industry Association (SEIA) data, the cost of residential solar panels decreased by 68.4% from 2004 to 2024. This significant price decline makes solar panels more attainable for homeowners searching for a better energy solution. If you are considering going solar, understanding the evolving cost of solar prices in the U.S. can help you make an informed decision.
Caption: The cost of residential solar panels from 2004 to 2024, based on SEIA data.
Why has the cost of solar dropped?
Several factors contribute to the decrease in solar panel costs, including:
- Increased research and development efforts by solar companies.
- Improved technology for hardware components like solar panels, batteries, and inverters.
- Larger and more efficient manufacturing facilities to create solar products.
- Growing market competition between solar manufacturers.
- More consumer interest in renewable energy as traditional electricity rates increase.
- More available solar incentives for consumers.
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The average cost of solar panels
The cost of installing solar panels on your home will depend on a few factors, including the size of the solar system and the cost per watt. According to the Lawrence Berkeley National Laboratory (LBNL), the average size of a residential solar system is around 7.4 kilowatts (kW). At $3.25 per watt, this solar system would cost $24,050.
The average size and cost of solar systems vary by location. For a more accurate solar estimate, multiply your state’s average system size by the price per watt.
Solar panel costs in top-generating states
Explore the cost of solar panel systems in popular solar states.
| State | Average system size | Average price per watt | Average total cost |
|---|---|---|---|
| California | 8.6 kW | $3.67 | $31,562 |
| Texas | 9 kW | $3.27 | $29,430 |
| Florida | 9 kW | $3.21 | $28,890 |
| North Carolina | 9 kW | $3.51 | $31,590 |
| Arizona | 8 kW | $3.07 | $24,560 |
Solar tax credits
While the upfront cost of solar can be high for many consumers, tax credits can help with the investment. The Residential Clean Energy Credit offers a 30% tax credit for home solar panel purchases. The U.S. Congress passed the Inflation Reduction Act to encourage homeowners to upgrade or add renewable and greener energy products to their homes. The credit applies to the entire cost of your system, including parts, batteries, and labor.