What impacts the cost of a solar panels?
There’s a lot that goes into the sticker price a solar installer charges you. Solar installations are a unique product: the price you pay is heavily dependent on your unique situation and factors related to your electricity use and property. Here are some of the top factors to keep in mind that can and do influence the cost of solar panels for your property:
Perhaps the most obvious and influential factor in the price you pay for a solar panel installation is the size of the system you get. It’s pretty simple: a bigger system with more panels will cost more money than a system with fewer panels (and lower energy output). However, there’s also that Costco-esque relationship between system size and price, where a larger system has a lower average $/W. It’s like buying food in bulk – the overall price is higher, but the per unit price is lower. Here’s what EnergySage Marketplace data shows the $/W to come out to for various system size buckets, and what that would translate to for a full system:
Cost of solar panels by system size
NOTE: The $/W in this table reflects the average price in that system size range, i.e. $3.28 is the average $/W for systems ranging from 2 kW to 2.99 kW.
These prices reflect the cost of a solar energy system both before AND after deducting the federal solar tax credit, which saves you 26 percent. Some states, local governments, and utilities also offer rebates and other tax incentives that can save you further money.
Remember, while bigger solar power systems may cost more, they’ll also very likely save you more in the long run. If you install a 10 kW solar energy system that covers all of your electricity use, you might have to pay more out of pocket, but you’ll be cutting a significant monthly expense – your utility bill – and saving more money as a result. Zero-down, low-interest solar loans are becoming increasingly common, making it even easier to buy a solar panel system that can fully offset your electricity bill and maximize your solar savings.
Solar installation costs also vary by your location, mostly by state. The spread of prices isn’t that wide and much of the differences by location are actually due to differences in system sizes and incentives, but it’s still something to keep an eye on.
We’ve analyzed quote data from our solar marketplace to understand solar panel system prices by state. But as we said above, system sizes tend to be larger in states with lower pricing, so it’s not always fair to compare a 10 kW system in Florida to a 10 kW system in Massachusetts. Their energy needs are just too different.