Short answer: a typical US home solar system (6 to 8 kW) costs about $20,000 to $27,000 before incentives in 2026, or roughly $3.36 per watt nationally. Whether that pays off depends mostly on your electricity rate and how much sun your roof gets.
What solar panels cost in 2026
The national average installed price is about $3.36 per watt, according to industry data summarized by Solar.com (Q3 2026). Prices run lower in some states (California averages around $2.95 per watt) and higher in others.
| System size | Typical output per year | Cost at $3.36/W |
|---|---|---|
| 5 kW | about 6,500 kWh | about $16,800 |
| 7 kW | about 9,100 kWh | about $23,520 |
| 10 kW | about 13,000 kWh | about $33,600 |
Output assumes roughly 1,300 kWh per kW per year, a rough US average. Sunny states produce more, cloudy ones less.
What is included in the price
- Panels: about a quarter to a third of the total.
- Inverter(s): converts DC to AC; microinverters cost more but improve shade performance.
- Racking, wiring and labor: often the biggest share.
- Permits, inspection and utility interconnection: a few hundred to a few thousand dollars depending on your city.
- Installer margin: the part you can negotiate by comparing quotes.
Did the federal tax credit end?
Yes, for homeowner-purchased systems. The 30% residential clean energy credit (Section 25D) does not apply to systems placed in service after December 31, 2025. Some state and utility incentives still exist, and net metering rules vary by state. Always confirm the current rules on irs.gov and your state energy office before you sign anything.
A worked payback example
Take a 7 kW system costing $23,520 that produces about 9,100 kWh a year.
| Electricity rate | Yearly savings | Simple payback |
|---|---|---|
| 18 cents/kWh (about the US average, per EIA) | about $1,640 | about 14 years |
| 25 cents/kWh | about $2,275 | about 10 years |
| 32 cents/kWh (high-rate state) | about $2,910 | about 8 years |
This is simple payback with no financing cost, no rate increases and no battery. Rising electricity prices shorten it; a loan lengthens it. Panels typically carry 25-year warranties, so even a 14-year payback leaves years of free power, but it is a much weaker deal than it was with the 30% credit.
How to avoid overpaying
- Get at least three quotes and compare price per watt, not the total.
- Ask for the production estimate in kWh per year and check it against your bills.
- Check whether your utility pays full retail rate for exported power; if not, payback gets longer.
- Be wary of “free solar” offers that are really leases or power purchase agreements with annual price escalators.
- Check the installer’s license, warranty terms and local reviews.
FAQ
How much does a solar panel cost on its own? Panels themselves are a minority of the bill. Most of the cost is the inverter, labor, permits and overhead.
Does solar raise my home value? Studies generally find some increase, but it varies a lot by market and only for owned (not leased) systems.
Is solar worth it in 2026? Yes in high-rate, sunny states, and borderline elsewhere. Run your own numbers with your last 12 bills.
Prices are averages and vary by location. This is general information, not financial or tax advice.