The Cost of Going Solar Is Reaching an All-Time Low

Solar panels are still an expensive home upgrade, but they're much cheaper than they were a decade ago. The national average cost of solar panels is $2.69 per watt, according to a recent report from EnergySage, a solar marketplace site. 

The report uses solar quotes that customers received through EnergySage's website from January to June 2024. It tracks the prices paid for home batteries and solar panel systems. The national average cost of solar panels has been steadily decreasing since a spike in 2021. 

EnergySage says this gradual decrease is likely due to fewer supply chain disruptions after the pandemic and higher interest rates for solar panel systems. At the same time, California's recent change to its net billing policy has made going solar less appealing for residents of the largest state.

The average customer solar payback period (the time it takes to see a return on investment with your solar system) has also decreased. It dropped from around eight years to seven and a half years between 2023 and 2024.

The price you pay for solar panels depends a lot on your individual home and needs, but national trends can help you decide if going solar makes sense for you. Here are some more key findings from EnergySage's report.

Solar costs and system size vary by state

Solar panel prices are declining nationwide, but the cost of going solar in every state isn't the same. The top four states with the highest installed solar capacity -- Florida, California, Texas and Nevada -- all had average quoted solar costs 30 cents per watt below the national average ($2.69).

Other states, such as New Mexico, Ohio, Utah, New York, Arkansas and Pennsylvania, are also popular states for solar installations. But these states all saw average quoted prices slightly above the national average. Arizona and Texas had the lowest quoted solar prices, while Rhode Island had the highest.

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The average maximum quote customers received for solar was $3.08 per watt, the lowest it's been since 2021. Similarly, the average minimum quote fell to $2.54, the lowest it's ever been, according to the report. 

The report also revealed that solar panel system sizes are getting larger, with the average system size being 10.9 kW. California homes had the smallest average system size (8.3 kW) and Kentucky homes had the largest (14.9 kW).

Most of the country is using the same solar equipment 

There are tons of solar panel brands out there, but the most popular ones are REC and Qcells, according to the EnergySage report. These brands make up nearly 50% of EnergySage's marketplace combined. Other brands, including Panasonic and Silfab, have carved out some space in the market for themselves while others fight for what's left over. 

As far as inverters go, Enphase has been the most popular inverter brand with EnergySage customers for years. And it still is, making up more than 50% of the market. Tesla inverters were the second most quoted inverter brand. The report also revealed Tesla's Powerwall battery to be one of the most popular home batteries.

Should you go solar?

It's really up to you and your budget. Getting solar panels is an expensive and time-consuming process, and finding the right installer can be tricky. If you have high electricity bills and live somewhere that gets a lot of sunlight, solar can be extremely beneficial. And even if you don't live somewhere particularly sunny, you could still see bill savings with solar. 

Solar prices may be on the decline, but these systems still cost tens of thousands of dollars. Thankfully, there are federal, state and local incentives that can help cover at least some of the cost. The federal solar tax credit lets you claim up to 30% of the total cost of your system on your taxes. You should also see if your state or local government offers its own financial incentives. Solar-friendly states like New Jersey, Washington D.C., New Mexico, Maryland and Illinois offer several incentives for residents interested in solar.