In 2023, solar panels in the U.S. cost about $20,020 on average down from more than $50,000 10 years ago. In this article, we’ll break down the cost of solar by system size, state, and panel brand, all of which can significantly impact the final number you pay.

Average cost of buying solar panels in 2023

The average cost of a solar panel installation in 2023 ranges from $16,870 to $23,170 after taking into account the federal solar tax credit, with an average solar installation costing about $20,020. On a cost per watt ($/W) basis, solar panel prices in 2023 average $2.86/W (before incentives). This data comes from our own marketplace data from thousands of users across 37 states and Washington D.C.

Throughout this article (and all around our website), we usually talk about solar panel pricing in terms of gross cost, aka the cost before any solar rebates and incentives that can reduce the upfront cost of solar, or even get you some money back over time. For example, our cost per Watt ($/W) figures throughout the rest of this article are always the gross cost. This is because solar rebates and incentives aren’t always available to everyone. Even federal incentives like 30 percent solar tax credit aren't always available for everyone to take full advantage of – you need to have enough tax liability to claim the credit and reduce your overall cost of solar.

How long does it take to break even on solar panels?

On average, it takes 8.7 years to earn back the money you spend upfront on installing solar panels. In fact, it is most helpful to think about solar panels as an investment instead of a single product that you simply buy. Also known as the solar payback period, the point at which you break even on your solar investment can be calculated by dividing your combined costs (the gross cost of your solar panel system minus any incentives and rebates) by your annual financial benefits (the amount you save on electricity combined with eligible incentives and rebates).

Your payback period depends on a few factors, including your electricity rates and your energy usage. As energy costs continue to increase, you’ll be able to protect yourself by going solar:  the faster the cost of electricity increases, the shorter your payback period will be.

Are Solar Panels Cheaper Than Other Forms of Electricity?

The average American home spent $124.47 a month on electricity in 2019, according to current stats. Solar panels may require an upfront investment, but they can save you money over the course of your lifetime by cutting the cost on your electric bill. Considering that electricity is frequently cited as one of the priciest monthly utility expenses, it's little wonder that solar panel installation is an intriguing proposition for many.