How much does it cost to buy the whole entire solar system?

Solar isn't a one-size-fits-all purchase, so you're going to have vastly different price tags between solar projects. Because solar panels are such a site-dependent purchase, it's hard to pinpoint an exact cost without doing an on-site inspection of your home. 

One thing we do know is that going solar, no matter where you are, is very expensive. 

The average 8-kilowatt residential solar panel system cost about $3 per watt in 2022, according to data from the energy consulting firm Wood Mackenzie. That's a drop of 29 cents per watt from the year before, but it still means the average system costs about $24,000 before tax credits and other incentives. And your home may not be "average."

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There are many other factors that influence the cost of installing solar panels, including less-than-obvious ones, like the complexity of your roof, Rohit Kalyanpur, CEO of the Silicon Valley-based solar company Optivolt, told CNET.

But you can get some help to pay for your panels. The Inflation Reduction Act, passed by Congress in 2022, provides a 30% tax credit for solar panel systems installed through 2032.

Here's what you need to know about the costs of going solar. 

How much do solar panels cost for homes?

The cost of a solar system can vary wildly because so many factors are involved.

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Cost varies, in part, because of the size of the system, said Neil Gallagher, vice president and co-founder of Brighterway Solar, a Tampa, Florida, solar installer. The solar industry doesn't have a standard pricing structure, so cost by customer based on their energy consumption.

The cost of a solar system installation can vary widely when you compare the efficiency rate of the solar panels and other installation expenses. The best solar panels can set you back anywhere from $15,000 to $50,000. 

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The 30% tax credit provided by the federal government coupled with available state and municipal governments tax credits, tax exemptions, rebates and other incentives can further reduce the cost of purchasing and installing solar systems.

Here's a look at the average nationwide cost of solar panels, according to data from the Lawrence Berkeley National Laboratory, FindEnergy and the energy consulting firm Wood Mackenzie.

Average national cost of solar panels

System size (kW)Price per wattTotal cost Lawrence Berkeley National Laboratory 8.6$3.67$31,588Wood Mackenzie 8$2.99$23,920FindEnergy 5$3.60$18,073

Solar costs are also influenced by your solar system's components. Let's break down the components of a solar panel system and what you can expect to pay. 

• Solar panels: The solar panels alone can cost between 80 cents to $1.80 per watt, depending on the type, size and application. That's not including the cost of installation and of all the other equipment needed to get them producing energy and powering your home.
• Batteries: Solar batteries are costly and can vary in price based on the capacity and quality of the battery. They store the energy accumulated from the solar panels. The price varies based on the installer, application and location. Batteries typically cost $12,000 to $22,000, according to the Department of Energy, although smaller capacity systems are available for less. In some cases, solar batteries may be more expensive than solar panels. Not all solar systems need batteries. If you're still connected to the grid, you won't need to store energy (but you still can).
• Inverter: This device converts the direct current, or DC, electricity produced by the panels and stored in the battery to alternating current, or AC, electricity, which runs all appliances. The inverters can cost between 20% and 50% of the price of the solar panels. 
• Charge controllers: These devices, which protect the battery from overcharging, can cost between 5% and 10% of the price of the solar panels. Complex charge controllers with advanced features can be more expensive.
• Labor costs: These costs can vary from state to state. Some states require specific ratios of licensed electricians to nonelectricians on a solar installation crew. Licensed tradespeople typically cost more due to the insurance, benefits and workman's compensation costs. 
• Additional expenses: Factors contributing to the overall solar installation cost include system size, design, site survey, engineering, permits, power electronics, mounting hardware, telemetry systems and maintenance. These costs can differ significantly depending on the location.

How much are solar panels in my state?

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Zooey Liao / CNET

Here's a look at the average cash price for a 5-kilowatt system per state, according to data from FindEnergy.com. This is a cash price and doesn't factor in tax credits or state incentives. Certain states don't have any FindEnergy solar data.

We've also included estimated solar savings after the federal solar tax credit, average electricity rates and average annual electricity bills per state, calculated using data from the US Energy Information Administration. 

Solar panel costs by type

Jamie Grill/Getty Images

There are three main types of solar panels: monocrystalline, polycrystalline and thin-film. Monocrystalline solar panels are the most popular choice for residential installation because they have the highest efficiency rates from 17% to 22%. The average cost for these panels is between $1 and $1.50 per watt, but prices may differ depending on location. 

Polycrystalline panels are popular for homeowners on a budget. They have a moderate efficiency rate ranging from 15% to 17%. Their cost is between 90 cents and $1 per watt. 

Thin-film solar panels, which have an efficiency rate ranging from 10% to 13%, are the least efficient solar panels on the market. They have a shorter life span and are rarely used for residential purposes. 

Solar panel types

Solar panel typeEfficiency rateCost per watt Monocrystalline 17% - 22%$1 - $1.50Polycrystalline 15% - 17%$0.90 - $1Thin-film 10% - 13%$1 - 1.50

Factors that affect solar panel costs 

Trying to get a solar estimate without an on-site inspection of your home is tricky business. Because the location, layout and energy needs of every home are different, solar pricing for each residence is different too. Your home might need only a small 5 kW solar array. But your neighbor down the street might need a larger 8 kW array. And they might choose to install a solar battery, which is going to push their price tag even higher. 

Here are some of the biggest factors that affect the cost of going solar.

Solar panel cost factors

Cost factorDescription System size The size of your solar panel system can quickly drive up your solar costs. The more panels you install, the more you'll pay. This is largely determined by your home's energy needs.Tax credits and incentives Some states offer incentives to help residents with the cost of installing solar. These incentives are usually in the form of tax credits and rebates through state government and utility companies.Condition of your roof If your roof is damaged or is fairly old, it might need to be repaired or even replaced before installing solar. Obviously, this is going to cost you more money.Brand and type of panel installed Certain brands and types of solar panels cost more than others. This can have an impact on how much you'll pay.Additional equipment installed You'll be paying for more than just the solar panels for a complete system. Certain brands and types of inverters cost more than others. Installing a solar battery can also cost quite around $10,000 or more.

What are the additional costs to install solar panels?

As you're likely aware by now, solar is not cheap. But did you know that the price of the solar panels themselves is actually one of the cheapest things you'll pay for during your solar journey? Only 35% of your total cost to install solar goes toward the actual purchase of the solar equipment, according to the US Department of Energy.

Where is the rest of your money going? Soft costs, also known as the hidden costs of installing solar. Soft costs are nonhardware costs, and they make up 65% of your total solar costs, according to the DOE. Most of your soft cost expenses go toward things like sales and marketing, labor, paperwork and overhead profits. 

Here are some of the most common soft costs you'll be charged for:

• Installation labor.
• Permits and inspections.
• Supply chain costs.
• Sales tax (unless your state exempts solar panels).
• Supply chain costs.
• Sales and marketing.
• Overhead company profit.
• Tree removal (if you have trees shading large parts of your roof).
• Insurance (if you plan on adding your solar panels to your homeowners insurance policy).
• Maintenance.

How much do solar panels save?

There are several factors such as the direction and angle of the panels, local weather conditions (such as annual irradiance, which refers to total sunlight hours per year), system size, shading, battery capacity and efficiency and more that must be considered before you can get an accurate estimate of your potential cost savings. If your home is suitable for a solar system, you can expect to reduce your monthly electricity bill by 50% to 100%. 

By investing in a high-quality solar system, you're paying upfront to enjoy the long-term financial benefits of reduced or even eliminated electricity bills. It often takes six to 12 years for a solar panel system to pay for itself. Let's take a look at a quick example.

How to calculate the federal solar tax credit

Let's say your current monthly electricity bill is $150 and the solar system you want to invest in costs $30,000. First we want to calculate what your system will cost after the federal 30% tax credit. Here's how that looks:

1. Net project cost = Total project cost - federal tax credit
2. Federal tax credit = 30% x $30,000 = $9,000
3. Net project cost = $30,000 - $9,000
4. Net project cost = $21,000

Now we need to calculate the payback period to know how long it will take to recover your investment after installing the solar system. 

1. Payback period = Net project cost / Annual electricity savings
2. Annual electricity savings = Monthly electric bill x 12
3. Annual electricity savings = $150 x 12 = $1,800
4. Payback period = $21,000 / $1,800
5. Payback period = 11.7 years

Based on this calculation, a $21,000 investment in a solar system will take less than 12 years to recover your initial investment. 

How long does it take to break even on solar panel costs?

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Your breakeven point, also known as solar payback period, is the amount of time it takes for you to see a return on your investment. In other words: How long it takes for your solar panels to start paying for themselves. Just like the average cost of going solar, your payback period may vary. 

However, experts say an average payback period in the US is between six to 12 years. Factors affecting your solar payback period include system cost, tax credits and incentives, energy consumption, how much electricity your system generates and your electricity rates. 

Using a quick math formula can help you get a general idea of your solar payback period. But you'll want to speak with an installer to get the most accurate estimate. 

(Total solar system costs - rebates) / Electricity bill savings per year = Payback period in years

1. Start with the total cost to install solar on your home. (If you're taking out a loan, consider interest and fees.)
2. Next, subtract the value of any tax credits, incentives or rebates.
3. Now you have the net cost of your solar panel system, after discounts.
4. Next, estimate your annual electricity bill savings with solar panels. (Your solar installer or utility provider might be able to help here.)
5. Then, divide the net cost of the system by the annual bill savings.
6. The number you end up with is the number of years it will take for your solar panels to "pay for themselves."

Are solar panels worth the financial investment?

There are several factors to consider when assessing the benefits of solar panels, Kalyanpur said. First, consider the total energy produced over the system's lifetime and whether it can result in substantial savings. Other factors include state-level incentives that help to offset the costs of investing in solar panels.

Pros 

• Solar panels can reduce your carbon footprint and contribute to a greener environment.
• They can significantly lower or eliminate your electricity bill and generate financial savings.
• They can increase the value of your property.

Cons

• The upfront costs are quite expensive.
• Solar panels' efficiency and energy generation depend on weather conditions and location.
• Maintenance and replacement costs can increase the long-term costs of a solar system.

How can I pay for solar panels? 

There are various ways you can go about paying for solar panels. Here are a few of the most common:

Cash: If you can afford it, paying cash is your best option. You won't have to worry about high financing fees or interest rates, and you'll always be eligible for tax credits and incentives. Your solar payback period will likely be shorter too.

Solar loan: Paying thousands of dollars up front in cash isn't an option for everyone. If paying cash isn't in your budget, your installer might offer you a financing option called a solar loan. These loans are usually through a third party, so check for associated fees and interest rates. 

Other loans: A solar loan isn't your only financing option. You could consider taking out a personal loan through your bank, or opening a home equity line of credit. Just be aware of the risks that come with a HELOC. If you can't pay back what you owe, you could lose your home.

Lease or power purchase agreement: If you aren't interested in solar panel ownership, consider leasing a system or entering a power purchase agreement. When you lease a system, you pay for the use of solar equipment owned by a solar company. Entering a PPA means buying solar power generated by a company-owned system at a fixed rate. This fixed rate is usually cheaper than the retail electricity rate from your local power company. Ask your solar installer about all your options.

How long does it take to install solar panels?

anatoliy_gleb / Getty Images

It can take six months or more to get solar panels installed. The actual "installation" of the panels on your roof by the installer is usually completed in three days or less. 

What really slows down the process of solar installation is everything that needs to happen before installation day. The sale of the system itself, site assessments, system design, gathering permits and supply chain issues can all drag out the solar installation timeline. Most of your time will be spent waiting around for permits and paperwork to be approved, as well as dealing with supply chain delays. 

Solar installation process

Part of the installation processDescriptionTime it takes Personal research and establishing the sale Give yourself plenty of time to do some independent research and gather as many quotes as you can. Once you've chosen your installer, they'll work with you to start the solar sale and process.As long as you needSite assessment and system design Your installer will assess your property to design a solar panel system that fits your roof and your home's energy needs.One to four weeksPermits and paperwork You'll need the right permits to install solar on your property. Your installer will take care of this. Depending on where you live, this can take quite a long time.Three to 11 weeksInstallation The day (or days) when the installer will come to install solar on your property.Less than three daysPermission to operate The approval from your utility to activate your solar panel system. This is part of the installation process.Two to three weeks, or longer

Solar panel FAQs

Do solar panels increase the value of your home?

Yes, it's possible they might increase your home's value. In most cases, solar panels are viewed as upgrades or home improvements. Installing solar panels could increase your home's resale value by about $15,000, according to the DOE.

How long do solar panels last?

Solar panels can last upwards of 25 years or more. The longevity of your solar panels depends on environmental conditions, type of panels installed and the quality of installation. Many solar companies also offer 25-year panel warranties. 

What states are the best for solar?

There isn't a definitive "best solar state." But there are states that make going solar more affordable and accessible by providing state-level tax incentives and rebates. States with net metering and a Solar Renewable Energy Credit, or SREC, market even make it possible to earn money by selling your excess solar energy to the power grid or utility companies. States that receive more peak sunlight hours are also more beneficial for solar. 

Correction Aug. 18: This story originally presented some statements as direct quotations that were actually paraphrases of what the individual cited had said. Those passages have now been rendered appropriately as paraphrases.

By Jessica Wimmer

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The national average cost of an off-grid system is $55,000*, though your investment could range from $20,000 to $100,000 based on your system design and energy needs. Going off-grid reduces your energy usage, lowers your carbon footprint, and enables you to live more independently. However, it requires a substantial up-front investment.

Learn what you’ll need to start your off-grid solar system and how much the required components cost below.

*Unless otherwise noted, all cost data is based on figures from EnergySage and Fixr.

 

 

What Is an Off-Grid Solar System?

Most people who choose solar panels as their energy source remain grid-tied. This provides backup power when the solar panels don’t generate enough energy, such as on cloudy days or at night. As the name suggests, an off-grid solar panel system doesn’t connect to a power grid. That means what it generates is the only energy available to fulfill your electrical needs.

People choose this route for a few reasons. Many homeowners who opt for an off-grid system live in remote areas without electric service. Some want to be completely off-grid as a lifestyle choice geared toward sustainability. Off-grid systems can also be ideal for those who have detached workshops or sheds they want to power and those who frequently travel via a recreational vehicle (RV).

Off-Grid Solar Benefits

Some of the top benefits of not connecting your solar energy system to the grid include:

• Cost savings:

  Having an off-grid system means you’re not paying anyone for electricity.

• Design flexibility:

  Forgoing interconnection with the grid and the permitting that goes along with it allows you more freedom in the design of your system. You can tailor the components, brands, and production levels to your preferences.

• Energy efficiency:

  A desire for environmental sustainability motivates many

  homeowners

  to install

  solar panels

  . Sourcing electricity from

  solar energy

  alone reduces your carbon footprint, greenhouse gas emissions, and dependency on fossil fuels. Plus, when the only electricity you have is what your system generates, you’re likely to be more mindful and conservative with usage.

 

 

What Are the Parts of an Off-Grid System?

To understand the cost of an off-grid system, you must first know all the components required to go off-grid and how they’ll add to your total cost. Necessary system components include:

• Charge controllers:

  Solar charge controllers

  help you manage the electricity generated. They regulate the current that flows from your panels to your battery so there’s no overcharge or discharge. You’ll need one for each battery to protect its

  life span

  .

• Inverters:

  A solar system generates

  direct current

  (DC)

  power, but your home uses AC (

  alternating current

  ) power. An

  inverter

  converts DC power to AC power.

• Solar batteries:

  One of your biggest costs will be the

  solar battery

  . You’ll need at least one battery to store the energy your system generates. Adequate

  battery storage

  prevents you from

  blackouts

  . Remember, you won’t have the

  electrical grid

  as a backup at night or during cloud coverage like you would with an

  on-grid

  system.

• Solar panels:

  Solar panels

  are the basis of the system. They absorb

  solar energy

  and use it to generate DC power. The type of panels you get and how many will have the biggest impact on overall system cost. You’ll need enough panels to power your needs during the day and charge your

  solar battery

  for nighttime usage.

These are the basics of an off-grid solar power system, but many people decide to expand their setup with equipment such as generators or wind turbines. The company you get your panels from may offer a mobile app to monitor system performance or ongoing maintenance services you might want to invest in.

 

 

Off-Grid Solar System Costs

The average off-grid solar system costs $55,000 for a 7-kilowatt (kW) system. Smaller properties with low energy needs, such as an RV or shed, can get by with a smaller system and may require an investment as low as $20,000. Larger properties, those with high energy needs, or those in cloudy climates that require more panels and backup energy storage may need a system closer to $100,000.

Price LevelYou’ll Pay

National average

$55,000 (Avg. range: $45,000 to $65,000)

Low end

$20,000

High end

$100,000

See average price breakdown by component:

Component Average Price

Solar battery

$4,000 to $14,000 each

Solar charge controller

$550 to $600 each

Solar inverter

$7,000 to $8,000 each

Solar panels

$10,000 to $18,000

Payment Options

Most solar companies offer a combination of the following solar financing options:

• Full cash purchase:

  Paying in full up-front is the easiest option since you don’t have to enter a contract and will own your system from day one.

• Solar loan:

  A loan gives you the financial cushion to make monthly payments while still owning your system.

• Solar lease or power purchase agreement (PPA):

  Leases and PPAs work similarly in that a third party owns your system and sells you the electricity it produces at a predetermined rate. We don’t recommend these options because not owning your system disqualifies you from many solar

  incentives

  .

Solar Incentives

Solar incentives are available at the state and federal levels to help you save money when you invest in renewable energy. Incentives vary by state, but common ones include:

• Federal tax credit:

  You can dramatically lower your total solar expense using the

  federal solar tax credit

  .

  This allows you to take 30% of your solar investment off what you owe on your federal income taxes the following tax season. You must own your system to qualify.

• Sales and property tax exemptions:

  Many states waive sales tax on solar equipment. Many also don’t increase your property tax if installing

  solar panels

  increases your home value.

• State tax credits:

  States often provide a tax credit that reduces your state tax bill by a percentage of your overall solar expense.

 

 

Cost Considerations

Solar power system costs vary greatly depending on several factors, so it’s best to speak with reputable solar companies in your area and get a few estimates to compare.

Energy Consumption and System Size

The more energy you use, the bigger the system you’ll need. If you need to power many appliances or run electricity all day and night, you’ll need a system designed to meet this capacity. You’ll also need more batteries to store energy during low-sun hours. With panels and batteries being the biggest factors in total system cost, going bigger means investing thousands more dollars.

Your solar installation company should analyze how much energy you need and what system size and number of batteries will suit you.

Equipment Quality

The brand and off-grid home features you choose affect the price. Some solar companies are more expensive than others due to their reputation, years in business, or inventory performance. Not all panels or batteries are the same, either. The design and degree of energy efficiency will increase the price.

Labor

Don’t forget that you’ll need a team to design and install the system. The National Renewable Energy Laboratory (NREL) estimates labor to be around 7% of the total solar cost. Using the average system cost of $55,000, that’s $3,850. You can forgo labor costs by installing your system using a DIY solar panel kit. However, we don’t recommend this option because it requires extensive skill and disqualifies you from solar incentives.

Solar Exposure

Since off-grid systems supply 100% of your electricity, you need one that can soak up plenty of sun. You’re in luck if you live in an area with abundant year-round sun exposure. If not, you’ll need more panels, increasing the price. Your solar installer can assess your solar exposure, how to make the most of it, and what system size you’ll need to cover your electricity needs.

System Type

You have several options when choosing an off-grid system. Common types include:

• AC systems:

  AC systems are the most popular option and come with a higher cost. They use panels, batteries, and an

  inverter

  to convert DC to AC power so you have electricity for everything in your home.

• AC systems with a backup generator:

  With this option, you have a generator as an electricity backup. Purchasing a generator in combination with a solar system is often quite pricey.

• AC systems with wind:

  This is an option for those who live in areas with lots of wind but inconsistent sun exposure. Wind energy serves as a backup source. Setting up a

  wind turbine

  and a solar array is often the most expensive route.

• DC systems:

  DC systems are the most cost-effective and limited option.

  They don’t rely on a battery or

  inverter

  , so you only have the energy generated on sunny days, which isn’t super reliable.

• Mixed DC and AC systems:

  Mixed systems are best for small-scale

  energy needs

  since they lack a battery and

  inverter

  capacity to power an entire home’s appliances, lights, etc. They have a more midrange cost.

 

 

Is an Off-Grid Solar System Worth It?

Whether an off-grid system is worth it depends mainly on your energy needs and budget. If your home uses excessive electricity to power many appliances throughout the day, then installing solar panels and backup batteries may be too expensive to justify leaving the grid.

On the other hand, if your energy needs are more conservative, then you may need only one battery and fewer panels, lowering the cost. The lower your cost, the shorter your payback period, and the quicker you’ll enjoy no electricity fees. A solar company can assess your electricity needs and help you determine if going off-grid will make sense for you based on what you’ll spend and save.

 

 

Our Recommendation

Going off-grid isn’t right for everyone. However, if you think it’s right for you, you can spare yourself a lifetime of high electricity bills. You’ll also reduce your carbon footprint and usage of fossil fuels by relying solely on clean energy.

We recommend starting with a reputable solar company to analyze your electricity usage and advise you on the best setup for your needs. We suggest looking at different solar providers’ warranty coverage, customer reviews, and reputation before deciding. It’s also a good idea to get price estimates from at least three companies to compare.

 

 

Off-Grid Solar System Cost FAQ

How big of a solar system do I need off-grid?

The system size you need depends on how much electricity you require to power your home. A large home with multiple floors, numerous appliances, and frequent overhead lighting requires a much more powerful system than a small home with a few appliances.

How much do off-grid solar batteries cost?

Solar batteries typically cost between $4,000 and $14,000. The Tesla Powerwall, the industry’s most popular solar battery, starts at $8,700.

How long do off-grid systems last?

The Department of Energy estimates that most panels last between 30 and 35 years. Solar batteries and charge controllers typically last 5 to 10 years, while inverters can last as long as 25.

What components do you need for an off-grid solar system?

An off-grid solar system requires solar panels, at least one solar battery, a solar inverter, and solar charge controllers.

Read more: Our Methodology