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One of the biggest concerns that people have when going solar is how much solar panels cost to install. We hate to hit you with “it depends” but it does! The type of your system, its size, the way you want to get it — all these things and more, affect the final cost of your PV installation. Let’s go over them step by step.
Key takeaways
- System type sets your baseline. Grid-tie is cheapest at $18,000–$21,000 for a 7kW system. Adding battery storage increases costs by up to 50% but protects against outages and can boost savings through peak shaving.
- How you pay is as important as what you pay. Cash wins on lifetime savings. If financing, target a dedicated solar loan at 4–7% APR — not a general personal loan at 12%+.
- The federal ITC is gone, but incentives aren't. Seven states offer their own credits, net metering saves $900–$2,200/year, and leases can still pass through up to 40% in federal and domestic content credits.
- Prices are near historic lows — but may not stay there. Installed cost hit $2.50/W in 2024. New tariffs on Southeast Asian imports have already pushed panel prices up 20–35%.
Types of solar installations differ in their costs
When you consider a home installation, there are three ways you can set up your solar system:
- Grid-tie solar system. Your house is connected to the grid, and you can use solar energy for your home or export it into the grid. This is the cheapest type of system as it requires only solar panels, a grid-tie inverter and addons, such as mounting and wirings. It provides steady savings but your home is vulnerable to power outages.
- Off-grid system. When your house can’t be connected to the grid, you can use a solar system instead of a generator. This configuration always requires energy storage which increases the cost of solar installation.
- Hybrid system. Your house is connected to the grid but you also have energy storage to rely on in case of a power outage. This setup is more expensive than a grid-tie system but sometimes provides higher savings over the years.
Whenever your system has a battery, the cost of solar panel installation increases by up to 50% and the ROI tends to go down. The battery provides the comfort of being immune to power outages. In a hybrid system, a battery may increase savings through peak shaving. You can set your system to make your house draw energy from the battery at times of peak utility rates and save money this way.
Regardless of which system type you choose, the panels themselves make a significant difference in how much power you get per square foot of roof. If you want to maximize output — especially in a ground-mounted off-grid setup or when roof space is limited — bifacial solar panels are worth considering. Unlike standard panels, bifacials capture sunlight from both sides, with the rear side adding up to 25–30% more production when mounted away from the roof surface. That extra output can meaningfully shorten your payback period without increasing your footprint.
Solar panel costs in 2026: Prices & savingsUse our calculator to find average cost of solar panel installation
Prices change all the time. Still, let’s look at the very approximate costs for different types of solar systems. The average size of a solar system in the US is 7 kilowatts.
• A 7kW grid-tie system — $18,000–$21,000 before incentives
• A 7kW off-grid system — $25,000–$35,000
• A 7kW hybrid system — $18,000–$28,000 before incentives
Solar energy continues to grow in popularity among boondockers and sailors. Their energy needs are typically low, and one or two panels are often enough to keep the lights on and devices charged. Many also prefer to handle installation themselves. A basic kit for an RV or a boat — say, 200–400W — can start from as little as $800–$1,500, while a more capable setup for full-time off-grid travelers runs $2,500–$5,000.
Let us do the math for you
A1 SolarStore Calculator will help you figure out the approximate cost of your future system and the savings that it may bring.
There are different ways to get a solar system
How much money does it cost to install solar panels depends on how you go about doing it. Technically, you could find a company that will design and install a “turnkey” solar system for your home. A more budget-friendly approach would be to purchase the equipment yourself and find an installer.
There is no fixed rate for labor when it comes to PV systems. How much does it cost to install rooftop solar panels will depend on your system size, location, and roof complexity. Keep in mind that you’ll have to schedule inspections and get permits from authorities which may also increase your expenses.
If you are good with tools and you want a small DIY solar project in our garage, an off-grid PV system for a remote house or a small mobile installation for your RV, you can install the system yourself. In this case, you bring down the cost of installing solar panels to your equipment expenses.
Labor expenses make up 30-50% of your installation costs
Buy in cash and avoid loans and lease
The way you pay for a solar system also makes a difference. There are three options to get a solar panel system: you can buy it in cash, lease it or take a loan.
~12.27%
— average personal loan interest rate in 2026
A standard personal loan or lease makes going solar more accessible, but reduces your long-term savings — leasing and high-interest financing options can deliver 40–60% less lifetime value than a cash purchase. That said, the financing landscape shifted in 2026: the 30% federal tax credit expired for homeowner-purchased systems at the end of 2025, but it still applies to leased systems through the leasing company. This has made leases more competitive for some homeowners than before — worth factoring into your decision.
The smartest loan path for solar is a dedicated solar or green energy loan. Some credit unions and state programs offer subsidized rates between 4–7% APR specifically for energy-efficient home upgrades — significantly better than a general personal loan. At those rates, your monthly loan payment will often be lower than your old electricity bill from day one.
What incentives can reduce solar costs in 2026?
The federal 30% tax credit for homeowner-purchased systems expired at the end of 2025 — but that doesn't mean going solar is incentive-free. Between state programs, net metering, and smarter financing, there's still real money on the table. How much is a solar panel installation worth after incentives? Often tens of thousands less than the sticker price suggests.
State tax credits and rebates
Dec. 31, 2025
— ITC expired
Seven states — Arizona, Hawaii, Massachusetts, New Mexico, New York, South Carolina, and Utah — offer their own solar tax credits that work independently of federal policy. New York is among the strongest: the state credit covers 25% of installation costs up to $5,000, and the NY-Sun rebate program adds $0.20–$0.80 per watt on top. In Massachusetts, homeowners can claim 15% back (up to $1,000) through the state credit, stacked with the SMART performance payment program. Some utilities in North Carolina, Illinois, Oregon, and Minnesota also offer upfront rebates worth several thousand dollars.
Check solar programs in your area
Find out how can you make the state pay for your PV system in our State Solar Power Rankings
Net metering — your ongoing annual savings engine
Net metering is now the primary financial driver for most solar owners in the US. When your panels produce more electricity than you use, the surplus goes to the grid and you receive bill credits in return. The average US homeowner saves around $61,000 over 25 years after installing solar panels, and net metering is a big reason why. In high-rate states like Massachusetts, a typical 8kW system with 1:1 net metering can save $1,500–$2,200 per year on electricity. In lower-rate states like Pennsylvania, the same system saves $900–$1,400 per year. Multiply either of those figures by 25 years and you see why net metering matters more than ever.
Those 25-year projections only hold up if your panels keep producing at the rated output for the full lifespan — which is where the quality of your equipment becomes a financial decision, not just a technical one. Panels from manufacturers with proven financial stability are far more likely to honour their performance warranties a decade from now than those from smaller, less established brands. That's the real-world value behind Tier 1 solar panels: the Tier 1 classification doesn't rate panel quality directly — it identifies manufacturers financially stable enough to back a 25–30 year warranty and still be around to honour it.
Net metering policies vary by state and utility, and some states have moved to lower "avoided cost" rates. Always confirm your specific utility's current rate before relying on a savings estimate.
Many states exempt solar equipment from sales tax and prevent your property tax from rising after installation — even though solar adds real value to your home. These aren't flashy incentives, but they quietly reduce your upfront and ongoing costs.
The indirect federal benefit: leases and PPAs
If you're going solar in 2026 and want to capture something close to the old 30% federal credit, a prepaid solar lease or PPA is worth considering. Third-party owned residential solar projects continue to qualify for tax credits if they begin construction before July 2026 or are placed in service by 2028 under the commercial solar tax credit. Homeowners who choose these options don't claim the credit directly, but competitive providers typically pass the value through as lower monthly rates.
There's an additional layer here worth knowing: if your lease or PPA system uses domestically manufactured panels, the provider can qualify for an extra 10% domestic content bonus on top of the base 30% credit — and the best providers pass that through too. With imported panels now facing tariffs of 20–35% or more, American-made solar panels have become both a financially smarter choice and a way to unlock the maximum incentive stack available in 2026.
How much can you realistically save?
How much is a typical solar panel installation worth over its lifetime? Here's a concrete picture: a homeowner going solar in 2026 with a $20,000 system in a state with net metering and a state-level rebate could realistically reduce their effective system cost by $3,000–$6,000 through state incentives alone, then save another $1,000–$2,000 per year through reduced electricity bills. Over 25 years, that adds up to $25,000–$50,000+ in total savings — even without the federal ITC.
The cost of solar panels over time
Solar energy is cheaper than it has ever been — and the long-term price trend remains one of the strongest arguments for going solar. One watt of solar capacity cost $76 in 1977. By 2000, it had dropped to around $5. By 2024, the median installed cost per watt for a residential system hit an all-time low of $2.50/W — a 33% decline in just one decade. At the raw panel level, wholesale module prices fell even further, dropping to around $0.10/W by late 2024.
It's worth distinguishing between the two: the panel itself is now a small fraction of what you pay. Labor, permitting, inverters, racking, and soft costs make up the bulk of your installation bill. That's why the all-in installed cost sits closer to $2.50–$3/W, not $0.10.
That said, the price outlook for 2025–2026 is more complicated than in previous years. New US tariffs on solar imports from Malaysia, Thailand, Cambodia, and Vietnam — which previously supplied the vast majority of American solar panels — have pushed wholesale panel prices up by 20–35% from their 2024 lows. This doesn't reverse the long-term trend, but it does mean the record-low pricing of late 2024 may not persist in the near term.
On the labor side, the Bureau of Labor Statistics projects a 42% growth rate for solar installer jobs through 2034 — one of the fastest growth rates of any occupation in the country. A larger, more competitive installer market has historically kept labor costs in check and improved service quality for homeowners. All things considered, going solar in 2026 still makes strong financial sense — you're entering the market at or near historically low system prices, and the long-term savings picture hasn't changed.
The bottom line
How much does it cost to install solar panels? For most American homeowners in 2026, a 7kW system runs $18,000–$28,000 depending on whether you add storage. That's the number to plan around.
What that number becomes after incentives, financing, and 25 years of bill savings is a different story entirely — and a much better one. The federal tax credit is gone, but net metering, state programs, and the right financing can still cut your effective cost by thousands upfront and tens of thousands over time.
The honest answer to whether solar makes sense for you comes down to three things: your electricity rate, your roof's sun exposure, and how long you plan to stay in your home. If your utility rate is above $0.12/kWh, your roof gets reasonable sun, and you're staying put for at least 7–10 years, the math almost always works in your favor — with or without the federal credit.
The best move right now is to get two or three installer quotes, check your state's current incentive programs, and run the numbers for your specific address. The general figures in this article will get you oriented. Your actual quote will tell you what solar really costs for you.
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Andrey had been a news editor and freelance writer for a number of medias before joining A1 SolarStore team. Climate change and its impact on people's lives has always been among his interests and it partially explains his degree in Philosophy and Ethics.
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