Solar Panel Cost In 2026: It May Be Lower Than You Think | EnergySage
Solar panel cost in 2026: It may be lower than you think
Solar panels cost about $31,000 on average before incentives and most homeowners earn that back several times over through decades of electricity savings.
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If you've been putting off solar because of sticker shock, this might change your mind: Most homeowners save $41,000 to $155,000 over 25 years. While your neighbors watch their utility bills climb year after year, your panels generate free electricity for decades.
The typical home requires about 12 kilowatts (kW) of solar energy to meet its electricity needs, which costs an average of $31,135 before incentives, according to EnergySage data. Depending on where you live, state and local programs can knock thousands off that price, and if you finance with a loan or sign a lease or power purchase agreement (PPA), you'll see immediate positive cash flow as long as your energy savings exceed your monthly payment.
Understanding solar costs means looking beyond sticker prices. Right now, systems average about $2.60 per watt before incentives. But this number varies depending on your location, roof characteristics, and the equipment you select. Your state's averages matter more than national numbers, and factors like shading, roof complexity, and local incentive programs all play a role in your final price.
Key takeaways
- The average cost of a 12 kW solar panel installation on EnergySage is $31,135 before available incentives.
- You'll typically save anywhere from $41,000 to $155,000 over 25 years by installing solar panels.
- Solar panels are just 12% of the total cost of a solar panel installation.
- State and local solar incentives can significantly lower the cost of solar for many homeowners.
Average cost of an 12 kW solar panel installation in 2026
| Cost before any available incentives | |
|---|---|
| Low-end | $27,526 |
| Average | $31,135 |
| High-end | $33,869 |
Average cost of solar panels by state (per watt)
| State | Average system cost before incentives* | Average cost per watt ($/W)* | Average 25-Year Savings* |
|---|---|---|---|
| Alabama | $55,285 | $3.88 | $1,896 |
| Arkansas | $34,646 | $2.38 | $26,054 |
| Arizona | $30,079 | $2.21 | $38,038 |
| California | $22,049 | $2.47 | $130,674 |
| Colorado | $30,505 | $2.66 | $22,403 |
| Connecticut | $31,167 | $2.73 | $86,553 |
| Washington D.C. | $32,401 | $2.97 | $111,814 |
| Delaware | $34,917 | $2.54 | $47,461 |
| Florida | $34,646 | $2.13 | $64,842 |
| Georgia | $32,301 | $2.49 | $20,056 |
| Hawaii | $30,036 | $3.39 | $53,845 |
| Idaho | $40,380 | $3.05 | $ |
| Iowa | $43,172 | $3.28 | $12,603 |
| Illinois | $37,694 | $3.02 | $32,618 |
| Indiana | $33,456 | $2.79 | $13,295 |
| Kansas | $32,621 | $2.64 | $26,139 |
| Kentucky | $37,863 | $2.55 | $20,977 |
| Louisiana | $29,809 | $2.35 | $26,918 |
| Massachusetts | $31,931 | $2.91 | $154,721 |
| Maryland | $36,682 | $2.62 | $78,369 |
| Maine | $33,902 | $2.93 | $78,287 |
| Michigan | $34,448 | $2.91 | $33,597 |
| Minnesota | $42,054 | $3.23 | $28,357 |
| Missouri | $33,332 | $2.51 | $19,835 |
| Mississippi | $32,848 | $2.29 | $17,067 |
| Montana | $36,201 | $2.54 | $25,429 |
| North Carolina | $32,860 | $2.35 | $31,411 |
| New Hampshire | $36,546 | $2.89 | $69,473 |
| New Jersey | $34,181 | $2.68 | $79,323 |
| New Mexico | $27,766 | $2.67 | $43,196 |
| New York | $33,951 | $2.76 | $50,120 |
| Nevada | $29,083 | $2.38 | $26,052 |
| Ohio | $35,754 | $2.69 | $49,556 |
| Oklahoma | $37,696 | $2.62 | $20,597 |
| Oregon | $29,951 | $2.47 | $38,278 |
| Pennsylvania | $33,140 | $2.58 | $74,039 |
| Rhode Island | $31,108 | $2.77 | $38,725 |
| South Carolina | $37,566 | $2.61 | $26,701 |
| Tennessee | $49,262 | $3.56 | $ |
| Texas | $28,455 | $2.25 | $36,647 |
| Vermont | $31,791 | $2.76 | $37,119 |
| Virginia | $35,252 | $2.52 | $50,182 |
| Washington | $34,326 | $2.55 | $36,874 |
| Wisconsin | $40,502 | $3.11 | $45,635 |
*Based on EnergySage Marketplace data. They were last updated automatically on August 21, 2026.
Solar equipment costs
The panels themselves are probably the first thing that comes to mind when you think about going solar, but solar panels represent less than a third of the total solar equipment costs. You can expect all required solar equipment, including supply chain costs and sales tax, to cost about $14,011—about 46% of the total system price.
The type of panel you install also directly impacts the quality of your installation. Monocrystalline solar panels offer the highest efficiency and power output and are used in most home systems today. They're often more expensive than polycrystalline solar panels, but you need to buy more polycrystalline panels for the same amount of power, so your overall installation costs may be similar. Thin-film solar panels are the cheapest type of panel, but they aren’t often used for home installations due to their low production.
Costs Breakdown
| Component | Average cost* | Percentage of total cost** |
|---|---|---|
| Solar panels | $3,736 | 12% |
| Solar inverter(s) | $3,114 | 10% |
| Racking equipment | $934 | 3% |
| Electrical wiring | $2,802 | 9% |
| Supply chain costs | $2,802 | 9% |
| Sales tax | $623 | 2% |
| Installation labor | $2,179 | 7% |
| Sales & marketing | $5,604 | 18% |
| Overhead costs | $3,425 | 11% |
| Solar installer profit | $3,425 | 11% |
| Permitting & interconnection | $2,491 | 8% |
*Based on a $31,135 12 kW system before incentives. These are averages for the whole U.S. Costs will always vary from installation to installation.
**Based on a 2021 study by the National Laboratory of the Rockies.
Additional Costs
Solar panels require little to no maintenance over their lifetime, so you shouldn't expect to spend much once your panels are operating. The strongest warranties associated with your equipment and labor, the less you'll need to worry. The best solar panel brands today offer comprehensive 25-year warranties.
There’s always a chance that something happens that’s not covered by your warranties. You may need to trim trees as they grow or hire a cleaner if you live in an area with heavy air pollution or pollen. Learn more about potential costs you could run into post-installation.
Payment Options
How you pay for solar impacts your total cost and long-term savings. There are three main ways to pay for home solar:
- Purchase it with cash. Paying for your system upfront eliminates interest costs and gives you the best long-term savings.
- Take out a solar loan. A solar loan may be right if you don't want to pay for a system upfront, but value ownership.
- Sign a solar lease. A solar lease or power purchase agreement (PPA) can be a smart choice if you want to keep your capital flexible for other investments.
How to Lower Costs
If you want to lower your upfront cost of solar, you can:
- Finance your solar panel system. Choose to finance your system with a solar loan or lease/PPA.
- Install a smaller system. This can lower your overall price.
- Choose less expensive equipment. Get high-quality equipment without paying a premium.
- Get multiple quotes. Comparing quotes can save you big.
Conclusion
Solar is worth it for most homeowners because it eliminates or significantly reduces your electric bill. It's essential to think of solar panels as an investment that typically pays for itself within a decade, leading to substantial savings over time.