Solar Panel Cost

How Much Do Solar Panels Cost in 2026?

By Sam Wigness, Senior Editor · Reviewed by Brian Lynch · Last updated 9/24/2026

In 2026, most fully installed home solar systems cost $20,000 to $27,000 before incentives. The national benchmark is $3.36 per watt, according to SEIA and Wood Mackenzie, down 1.4% from a year earlier.

Of course, prices vary by location, equipment selection, and project-specific factors. For instance, on solar.com, the average price is around $2.95 per watt in California, and can be higher in areas with less sunshine and competition between installers. Installations in TX and FL tend to be the lowest cost markets given lower labor rates and high density of installers competing for business.

The biggest change in 2026 is that homeowners who buy solar can no longer claim the 30% federal tax credit. But third-party owned systems, such as prepaid and traditional leases, remain eligible for a business-claimed federal credit that can lower your upfront price or monthly payments.

Key takeaways

• National benchmark: $3.36 per watt installed (SEIA/Wood Mackenzie, Q3 2026)
• Solar.com California average: $2.95 per watt
• Typical system (6–8 kW): $20,160–$26,880 at the national benchmark
• Federal tax credit for buyers: None for systems installed in 2026 or later
• Federal credit for prepaid leases and PPAs: Still available. The solar company claims it and passes savings to you.
• Best way to save: Compare real prices and payment options. Prices for the same home can vary by thousands of dollars.

See your real solar price in 90 seconds

What’s in this guide

• Solar panel cost by system size
• What changed in 2026: the federal tax credit
• How much does one solar panel cost?
• What you’re paying for
• Extra costs to plan for
• Cash vs. loan vs. lease vs. PPA
• Price per watt vs. cost per kWh
• How to estimate your cost
• Are solar panels worth it without the tax credit?
• Are solar prices going up or down?
• How to lower your solar cost
• FAQs

Solar panel cost by system size

Solar systems are measured in kilowatts (kW). One kilowatt equals 1,000 watts. Most homes need a system between 6 and 8 kW to cover their yearly electricity use.

To estimate your cost, multiply the system size in watts by the price per watt. For example, a 7 kW system is 7,000 watts. At $3.36 per watt, that’s $23,520.

System size	Est. yearly production*	Cost at national benchmark ($3.36/W)	Cost at solar.com California avg. ($2.95/W)
4 kW	4,800–6,000 kWh	$13,440	$11,800
5 kW	6,000–7,500 kWh	$16,800	$14,750
6 kW	7,200–9,000 kWh	$20,160	$17,700
7 kW	8,400–10,500 kWh	$23,520	$20,650
8 kW	9,600–12,000 kWh	$26,880	$23,600
10 kW	12,000–15,000 kWh	$33,600	$29,500
12 kW	14,400–18,000 kWh	$40,320	$35,400

*Production depends on your location, roof direction, and shade. Prices are before incentives.

Good to know: Bigger systems cost more in total but less per watt. That’s because every project has fixed costs, like design, permits, and inspections, but larger projects benefit from bulk pricing on equipment like panels, inverters, and racking.

What changed in 2026: the federal solar tax credit

If you buy solar (cash or loan)

There is no federal tax credit for solar you buy and install in 2026. The IRS says the Residential Clean Energy Credit (Section 25D) doesn’t apply to systems placed in service after December 31, 2025.

These projects are typically the lowest cost as they don’t have to comply with strict rules and regulations relating to tax credit eligibility, which limit components from Chinese-affiliated suppliers. However, while lower-cost components might be an option, they might not be as bankable as ones the banks are willing to underwrite.

Installed your system in 2025? You can still claim the 30% credit on your 2025 tax return and carry any unused amount into future years.

Learn more about the federal solar tax credit

If you lease or sign a PPA

With a lease or PPA, a solar company owns the panels on your roof. That company can claim a business tax credit called Section 48E and pass the savings to you as a lower monthly payment or a lower price.

The company can claim 48E if the project began construction by July 4, 2026, or is placed in service by December 31, 2027. The July 2026 date has passed. That means new lease and PPA projects generally need to be up and running by the end of 2027. Some providers started projects before the deadline, so they may be able to offer credit-backed pricing for longer.

Rooftop solar still qualifies. The 2025 law only blocks leased solar water heaters and small wind turbines, not rooftop solar panels.

Batteries have more time. Under current law, batteries owned by a third party can get the full credit for projects that begin construction through 2033.

Prepaid leases and PPAs are another option. You pay upfront, like a purchase, but the solar company owns the system and claims the credit. Many homeowners who would have bought solar in past years are choosing this route.

In a prepaid lease or PPA the homeowner’s project benefits from the tax credit value without being tied to a long-term financial obligation like a traditional lease or PPA. For the first 5 years after the system is installed, the company that monetizes the tax credit has to own and operate the system. During this period, homeowner has all maintenance expenses built in. After the hold period, the homeowner can either choose to stay in the long-term third-party ownership structure or have it transferred to them.

Curious how your project compares under different financing structures? Run a no-obligation quote through solar.com to see how your savings stack up and compare different financing options side by side.

How much does one solar panel cost?

A single 400-watt home solar panel costs about $150 to $450, depending on where you buy it.

How you buy	Typical price	What’s included
Wholesale (installer pricing)	About $0.37 per watt, or roughly $150 for a 400W panel	Panel only
Retail or online	About $280 to $430+ per panel	Panel only
Full installed system	About $3.36 per watt nationally	Panels, inverter, racking, wiring, labor, permits, and more

Wholesale price: SEIA/Wood Mackenzie Q3 2026 average module price for home and business systems. Retail range based on current online listings for 410–435W panels.

Panels make up only about 11% of what you pay for a full system. So choosing a cheaper, lower-quality panel won’t save you much. It can also lower how much power you produce over 25 years.

Can one panel power a house? No. A typical home needs 15 to 25 panels to cover its electricity use. If you don’t have suitable roof space, a small “balcony solar” kit can shave down your utility bill.

What you’re paying for: solar cost breakdown

When you buy solar, you’re paying for much more than panels.

Cost item	Approx. share of total	Approx. cost per watt
Solar panels	~11%	$0.37
Inverter	~12%	$0.40
Racking and electrical parts	~18%	$0.60
Installation labor	~8%	$0.27
Permits, inspection, and utility hookup	~3%	$0.10
Customer acquisition	~18%	$0.60
Design, overhead, administration	~30%	$1.01

The surprise for most homeowners: Hardware and labor make up less than half the cost. “Soft costs” make up the rest. These include sales, design, permits, and overhead. This is why prices vary so much between installers, and why comparing real prices matters.

But price changes are coming starting Dec 4 the US Government is implementing a “minimum import price” for solar panels of $0.38 per watt plus a 15% tariff. This means you’ll likely see solar panel pricing standardize between $0.45 and $0.50 per watt going forward.

While US producers are protected from being undercut from cheap imports, it may increase the “hard costs” of your project.

Extra costs to plan for

Your quote may include add-ons, like battery storage, depending on your home, energy goals, and local solar policies. Ask about these upfront so there are no surprises.

Extra cost	Typical range	When you might need it
Home battery	$10,000–$20,000	For backup power or to save more under time-of-use rates
Main electrical panel upgrade	$1,500–$4,000	Older or smaller electrical panels
Roof repair or replacement	$10,000–$25,000+	Roof has less than 10–15 years of life left
Ground mount	Adds $0.25–$0.50 per watt or more	Roof is shaded or too small
Trenching	$30–$100 per foot	Ground mounts or detached garages
Financing Costs	Often 10–30% of the loan amount	Some solar loans have APR Buydowns to lower the monthly loan payment
Local permit fees	About $100–$800	Varies by city and county

Roof tip: If your roof needs replacing in the next few years, do it before you install solar. Removing and reinstalling panels later can cost several thousand dollars.

Cash vs. loan vs. lease vs. PPA: what solar really costs in 2026

How you pay now affects your cost more than ever, because only third-party-owned systems still get a federal tax credit.

	Cash	Solar loan	Traditional Lease/PPA	Prepaid lease/PPA
Upfront cost	Full price	$0 down possible	Usually $0	Paid upfront (can be financed)
Monthly cost	None	Loan payment	Lease: Monthly fee. PPA: Pay per kWh. Payments may escalate!	Paid upfront: none. Financed: Flat monthly loan payment
Federal tax credit	None	None	Solar company claims it	Solar company claims it
Who owns the system	You	You	Solar company	Solar company (can transfer after 5-year hold)
Who handles repairs	You (under warranty)	You (under warranty)	Solar company	Pre-transfer: Solar company. Post-transfer: You
Long-term savings	Highest	Lower, due to interest and fees	Moderate	High

Cash gives you the biggest savings over time, but you wait longer to earn your money back.

Loans can save you money from day one if your payment is lower than your old electric bill. But financing costs add to your total expenses. Always ask for the cash price and compare it with the loan’s total cost.

Leases and PPAs often have lower monthly payments, since the solar company can use the 48E tax credit. Read the contract carefully. Look for payment increases each year (called escalators) and what happens if you sell your home.

Prepaid leases and PPAs combine an upfront payment with the tax-credit savings that come with third-party ownership.

Compare solar financing options

Price per watt vs. cost per kWh

There are two main ways to measure what solar costs.

Price per watt helps you compare real solar prices.

• Price per watt = total system cost ÷ system size in watts
• Example: $20,650 ÷ 7,000 watts = $2.95 per watt

Use the price before incentives when you compare prices. That way, every offer is measured the same way.

Cost per kilowatt-hour (kWh) helps you compare solar with your electric bill. A kWh is the unit of electricity your utility charges you for.

Cost per kWh = total system cost ÷ total electricity it will produce over its life

At the $3.36 national benchmark, solar you buy with cash costs about 9 to 13 cents per kWh over 25 years. The exact figure depends on how much sun you get. That compares with a national average of 18.34 cents per kWh for utility power as of June 2026, per EIA data.

Real-world example: Drying one load of laundry uses about 2 kWh. In California, where the average rate was 34.74 cents per kWh in June 2026, that load costs about 69 cents with utility power. With solar at solar.com’s $2.95 California average, it costs closer to 17 cents.

How to estimate your solar cost

Option 1: Use a solar calculator (fastest)

Enter your address and monthly electric bill into solar.com’s solar calculator. You’ll see a side-by-side comparison of solar and utility costs.

Every calculator makes guesses, like how fast electricity rates will rise. We base ours on your utility’s actual rate hikes over the last 10 years.

Option 2: Do the math yourself

1. Find your yearly electricity use. Add up 12 months of electric bills in kWh. Most U.S. homes use 10,000 to 11,000 kWh a year.
2. Estimate your system size. Divide your yearly use by 1,300. (One kW of solar makes about 1,300 kWh a year in an average U.S. location. Use 1,500 in sunny states and 1,100 in cloudier ones.)
3. Multiply by price per watt. Multiply your system size in kW by 1,000, then by $3.36, the national benchmark. Try a lower number, like $2.95, to see a range.

Example: 10,500 kWh ÷ 1,300 = about 8 kW. Then 8 kW × 1,000 × $3.36 = $26,880 before incentives.

Planning to buy an EV or heat pump? Add their expected electricity use now. It costs less to install a bigger system once than to add panels later.

Option 3: Estimate by home size (least accurate)

Frankly, we don’t recommend this method. Solar is sized by how much electricity you use, not by square footage. For instance, a small home with two EVs may need more solar than a large home with gas heat.

Still, people request to get a ballpark estimate this way, and this article can help you crunch the numbers.

Are solar panels worth it without the tax credit?

For many homeowners, yes, especially if your electricity rates are high. Solar lets you lock in the cost of your electricity for 25 years or more, while utility rates keep climbing.

Think of it like buying coffee in bulk. A big can from Costco costs more upfront than one latte. But it pays for itself quickly and saves you money for months. Solar works the same way with electricity.

How long does solar take to pay for itself?

In 2026, the payback period for a cash purchase usually runs 7 to 10 years in high-rate states and 10 to 14 years in average-rate states. Leases and PPAs can save you money from month one, with no payback period to wait out.

Example (national averages):

• A 7 kW system costs $23,520 at $3.36 per watt. It makes about 9,450 kWh in its first year.
• At 18.34¢ per kWh, that’s about $1,730 in first-year savings.
• If electricity rates rise 4% a year, the system pays for itself in about 10-11 years.
• Over 25 years, it saves roughly $33,000 to $48,000 after paying for itself.

What affects your savings

• Your electricity rate: The higher your rate, the more you save. Solar is usually a strong deal above about 15 cents per kWh. (People with solar celebrate utility rate hikes instead of dreading them, since it means more savings from their system!)
• Net metering: Some utilities credit you for extra power you send to the grid. Full retail credit means bigger savings. Where credits are lower, like under California’s Net Billing Tariff, adding a battery helps you use more of your own solar power. Learn about net metering by state
• How you pay: Cash gives the most lifetime savings. Prepaid leases and PPAs financed with a loan can offer savings with no money down.
• Home value: Zillow research found homes with solar panels sold for about 4% more. Many states also exempt solar from property taxes.

Solar is a good fit if you:

• Pay more than about 15 cents per kWh for electricity
• Have a sunny roof with little shade
• Plan to stay in your home for several years, or choose a Prepaid lease or PPA that can transfer more easily to a new buyer
• Want protection from rising electricity rates
• Want backup power during outages (with a battery)

Is solar a good investment?

Are solar prices going up or down?

Over the long run, solar prices have dropped sharply. In 2026, prices are holding steady, with a mix of forces pushing them up and down.

Pushing prices down:

• Module prices for home and business systems fell 16% from a year earlier to $0.37 per watt, after the IEEPA tariffs were struck down in early 2026.
• Fewer homeowners are buying solar since the consumer-claimed tax credit was terminated, so installers are competing harder on price. Wood Mackenzie expects the home solar market to shrink 23% in 2026.

Pushing prices up:

• A new 15% tariff, plus minimum import prices on solar materials, cells, and panels, takes effect on December 4, 2026, which will likely push panel pricing for projects into the $0.45 to $0.50 per watt range.
• In July 2026, the FCC added foreign-made inverters to its Covered List.
• Tariffs on copper, steel, and aluminum keep raising the cost of racking and electrical parts, and shipping costs are up more than 15%.

Bottom line: New tariffs could push prices up in 2027. The 48E deadline for third-party-owned systems is also coming at the end of 2027. If you’re thinking about solar, now is a good time to get real prices.

How to lower your solar cost

1. Look for state and local incentives

The federal credit is gone for buyers, but many states, cities, and utilities still offer help:

• State tax credits: New York offers a 25% state tax credit, up to $5,000.
• Rebates: Examples include the NYSERDA rebate in New York and the Austin Energy solar rebate in Texas.
• Battery rebates: California’s SGIP program offers rebates for home batteries.
• Tax breaks: Many states exempt solar from sales tax and property tax.
• SRECs: In some states, you can earn money for the clean energy your system makes.

Find solar incentives in your state

2. Get at least three real prices

Solar prices vary a lot between installers, even for the same home. Comparing real prices helps you spot a fair price, avoid scams, and negotiate. Get a baseline price from Solar.com in 90 seconds with no sales calls.

3. Consider a Prepaid lease or PPA

Because the solar company can still claim the 48E tax credit, these options may cost less than buying in 2026. Compare the total 20- to 25-year cost of each option.

4. Size your system right

Install enough panels for your current and near-future needs in one project. Adding panels later means paying fixed costs, like permits and design, a second time.

5. Don’t overpay for a loan

Ask for the cash price, the loan’s total cost, and any APR buydown costs. In most cases, you can pay off a solar loan early with no penalty to avoid interest costs.

The bottom line

Solar costs about $3.36 per watt nationally in 2026, or $20,000 to $27,000 for a typical home. The federal credit is gone for buyers, but leases and PPAs - paid upfront or over time - still carry a tax-credit advantage through 2027. State and local incentives can lower your cost too. The best way to know your real price is to get real prices for your roof.

See my solar price

Frequently asked questions about solar panel cost

How much do solar panels cost for a house?

Most homes pay $20,000 to $27,000 before incentives in 2026, based on the national benchmark of $3.36 per watt. On solar.com, California homeowners pay an average of $2.95 per watt.

How much does a single solar panel cost?

One 400-watt panel costs about $150 wholesale or $280 to $430 at retail. As part of a fully installed system, solar costs about $3.36 per watt nationally.

Can I still get a solar tax credit in 2026?

Not if you buy your system, because the 30% homeowner credit ended for systems installed after 2025. If you lease or sign a Prepaid lease or PPA, the solar company can claim the Section 48E credit and pass the savings to you.

Are solar panels worth it in 2026?

For most homes with a sunny roof and electricity rates above about 15 cents per kWh, yes. Solar costs about 9 to 13 cents per kWh over its life, compared with a national average utility rate of 18.34 cents.

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

A cash purchase usually pays for itself in 7 to 10 years in high-rate states and 10 to 14 years in average-rate states. Leases and PPAs have no payback period, since you pay little or nothing upfront.