How Much Do Solar Panels Cost In Your State? (Hidden Fees, Tax Credits)

In 2022, installing solar panels on your home can cost as little as ten thousand dollars. While this is certainly a lot of money, any argument against solar energy being too expensive is ultimately undone by the fact that by installing solar panels on your home, you can effectively reduce your electric bills to zero.

Although the exact cost of a solar panel system in your state will vary, understanding the hidden fees as well as the tax credits you can earn if you do decide to go green with your home power, can make the decision much easier.

Not to mention the benefits it has on the planet by lowering your carbon emissions and your eco-footprint!

Average Solar Panel Installation Cost by State

The price of a solar panel system differs by state, but on average, a 6 kilowatt (KW) system will cost you anywhere from $12,000 to $20,000. Many people argue the financial and environmental benefits of a solar panel system far outweigh the initial installation cost.

While solar panels effectively generate free electricity, there is an upfront cost for the materials and installation process.

This table shows the average residential solar panel system (about 6 kilowatts or 6 kW) cost to purchase and install, but it doesn’t factor in U.S. federal solar tax credits. (Additional information below)

View this chart as a rough estimation of how much you will pay upfront, because it presumes several factors, including:

• Location (Average sunlight)
• Available Resources
• Local Contractor Availability

Keep in mind, it does not include additional battery capacity for areas that get less sunlight during the day.^{1, 2}

 

State	Approx. Cost of Solar Panel (6 KW System) Installation
How Much Do Solar Panels Cost in Alabama	$12,120 – 17,100
How Much Do Solar Panels Cost in Alaska	$13,380 – 18,780
How Much Do Solar Panels Cost in Arizona	$12,900 – 15,180
How Much Do Solar Panels Cost in Arkansas	$14,520 – 16,440
How Much Do Solar Panels Cost in California	$14,460 – 19,260
How Much Do Solar Panels Cost in Colorado	$16,740 – 21,180
How Much Do Solar Panels Cost in Connecticut	$15,240 – 18,480
How Much Do Solar Panels Cost in District of Columbia	$15,600 – $24,840
How Much Do Solar Panels Cost in Delaware	$12,540 – 16,740
How Much Do Solar Panels Cost in Florida	$13,380 – 17,220
How Much Do Solar Panels Cost in Georgia	$16,020 – 19,740
How Much Do Solar Panels Cost in Hawaii	$11,830 – 20,280
How Much Do Solar Panels Cost in Idaho	$14,400 – 24,480
How Much Do Solar Panels Cost in Illinois	$16,500 – 20,100
How Much Do Solar Panels Cost in Indiana	$14,760 – 19,080
How Much Do Solar Panels Cost in Iowa	$19,440 – 20,400
How Much Do Solar Panels Cost in Kansas	$8,940 – 12,360
How Much Do Solar Panels Cost in Kentucky	$14,100 – 18,240
How Much Do Solar Panels Cost in Louisiana	$16,020 – 20,100
How Much Do Solar Panels Cost in Maine	$14,760 – 17,400
How Much Do Solar Panels Cost in Maryland	$15,180 – 20,340
How Much Do Solar Panels Cost in Massachusetts	$16,020 – 19,860
How Much Do Solar Panels Cost in Michigan	$15,540 – 20,580
How Much Do Solar Panels Cost in Minnesota	$16,860 – 20,340
How Much Do Solar Panels Cost in Mississippi	$11,880 – 16,500
How Much Do Solar Panels Cost in Missouri	$10,260 – 14,520
How Much Do Solar Panels Cost in Montana	$15,060 – 19,380
How Much Do Solar Panels Cost in Nebraska	$10,440 – 17,280
How Much Do Solar Panels Cost in Nevada	$12,420 – 15,300
How Much Do Solar Panels Cost in New Hampshire	$16,860 – 20,460
How Much Do Solar Panels Cost in New Jersey	$12,780 – 16,980
How Much Do Solar Panels Cost in New Mexico	$14,760 – 20,880
How Much Do Solar Panels Cost in New York	$16,380 – 21,060
How Much Do Solar Panels Cost in North Carolina	$13,800 – 18,480
How Much Do Solar Panels Cost in North Dakota	$8,340 – 11,820
How Much Do Solar Panels Cost in Ohio	$14,580 – 17,460
How Much Do Solar Panels Cost in Oklahoma	$11,280 – 20,040
How Much Do Solar Panels Cost in Oregon	$14,760 – 18,840
How Much Do Solar Panels Cost in Pennsylvania	$14,640 – 19,560
How Much Do Solar Panels Cost in Rhode Island	$15,780 – 20,220
How Much Do Solar Panels Cost in South Carolina	$16,380 – 19,620
How Much Do Solar Panels Cost in South Dakota	$11,280 – 17,580
How Much Do Solar Panels Cost in Tennessee	$7,800 – 11,820
How Much Do Solar Panels Cost in Texas	$14,280 – 18,840
How Much Do Solar Panels Cost in Utah	$13,800 – 17,880
How Much Do Solar Panels Cost in Vermont	$12,900 – 20,820
How Much Do Solar Panels Cost in Virginia	$15,540 – 19,500
How Much Do Solar Panels Cost in Washington	$14,100 – 17,700
How Much Do Solar Panels Cost in West Virginia	$13,020 – 20,280
How Much Do Solar Panels Cost in Wisconsin	$16,800 – 19,800
How Much Do Solar Panels Cost in Wyoming	$14,340 – 16,680

As solar technology continues to evolve, the prices are expected to drop as units become more efficiently produced. For now, however, this is about how much a solar panel system will initially set you back in your state. ^{3, 4}

Energy Cost Per State (How Much You Could Save with Solar Panels)

To understand just how much money you’ll be saving by installing a solar panel system, you first need to know about how much money you currently spend on energy.

This number varies on a state-by-state basis due to how each state gets the majority of their energy, but the average cost of one kilowatt-hour (kwh) in the U.S. is 10.59 cents.

The reason for the difference is the way energy is produced. In some areas, hydropower plants generate most electricity, while others are fueled by coal burning in other regions of the country.

The table below shows the average retail price of one kwh in cents per state:

 

U.S. State and District	Average Retail Price of Electricity Kilowatt-Hour in Cents
Alabama	9.84
Alaska	19.82
Arizona	10.44
Arkansas	8.32
California	18.00
Colorado	10.27
Connecticut	19.13
District of Columbia	11.90
Delaware	10.24
Florida	10.06
Georgia	9.93
Hawaii	27.55
Idaho	7.99
Illinois	9.75
Indiana	9.92
Iowa	8.97
Kansas	10.38
Kentucky	8.58
Louisiana	7.51
Maine	13.54
Maryland	11.15
Massachusetts	18.19
Michigan	12.21
Minnesota	10.57
Mississippi	9.13
Missouri	9.64
Montana	9.13
Nebraska	8.97
Nevada	8.33
New Hampshire	16.63
New Jersey	13.63
New Mexico	9.33
New York	14.87
North Carolina	9.43
North Dakota	8.53
Ohio	9.44
Oklahoma	7.63
Oregon	8.82
Pennsylvania	9.70
Rhode Island	18.54
South Carolina	9.90
South Dakota	10.06
Tennessee	9.52
Texas	8.36
Utah	8.27
Vermont	16.33
Virginia	9.16
Washington	8.33
West Virginia	8.75
Wisconsin	10.82
Wyoming	8.27

History of Green Energy

Human application of solar thermal energy has a long and storied past. In fact, the Ancient Egyptians are now commonly known as being some of the first people to truly harness solar energy on a large scale.

They were by no means the only ones. Thanks to recent discoveries, it is now known that the Ancient Egyptians used solar to heat their homes. Similar techniques were also incorporated by the Ancient Greeks and Romans, who designed their homes and common spaces to be kept warm by the sun. (Incidentally, these civilizations also used water fountains and eco-friendly architectural designs to cool their homes during the summer!)

One such example is the Roman bathhouses. Often, the southernmost wall of a bathhouse would act as a window so that passive solar energy could help heat the baths and lessen the amount of firewood that needed to be burned.

Similar techniques were employed by Native American tribes, with Mesa Verde’s well-known cliff houses being another perfect example of using solar power as a method for indoor heating. The same is also true of traditional Chinese buildings. All of these cultures and many more used solar energy in innovative ways.⁵

And now, in the twenty-first century, engineers and scientists are designing systems like solar panels and other methods of capturing and harnessing solar energy. And while these systems have only recently become affordable, their success is a testament to how much people desire clean, renewable energy.

So, if you’re wondering how much do solar panels cost, you need to first ascertain whether they will be used for commercial or residential use, and then understand how they work in order to find the exact price.

What Is a Solar Panel?

According to the United States Office of Energy Efficiency & Renewable Energy, the amount of solar radiation (light) that strikes the earth in approximately an hour and a half is enough to support a full year of global energy consumption.

By allowing that solar radiation to pass through photovoltaic (PV) panels, also known as solar panels, it is possible to convert that light spectrum into usable electrical energy. This renewable energy can be used immediately, or be stored in batteries to be used when it is needed.

If you take a more granular approach, you will see that solar panels are made up of PV cells. These cells capture energy when sunlight is absorbed, and this energy is then converted to electrical charges.

But, how many solar panels do you need and how much power do they generate?

How Many Solar Panels Should You Install:

In 2022, an average solar panel produces about one kilowatt-hour (kWh) per day. However, an average American household (regardless of state) uses about 30 kWh of electricity a day.

So, you will need about 30 solar panels to generate all of that electrical energy, for an average dwelling. However, your energy use may be more or less from the national average. Fortunately, most electricity bills print the exact amount of kilowatt hours used in daily, monthly, and yearly amounts.

To determine how many solar panels you will need, carefully consider each of the following factors:

Consider Your Home’s Sunlight Exposure:

In areas of the U.S. that receive more sunlight throughout the year, the cost of a solar panel system will more quickly be surpassed by how much is saved on residential energy consumption.

So, before you buy a solar panel system, consider how advantageous it is for your location. The Environmental Protection Agency (EPA) has cataloged the Average Annual Daily Potential Solar Energy. Depending on where you live, the number of peak sun hours that it averages will impact how much do solar panels cost.

You can also contact your local weather service to find out the peak sun hours for your specific area.

Calculate Your Daily Energy Usage:

To determine your daily energy usage, use this simple calculator:

1. Find your most recent utility bill. It’s best if you have the last 12 months so you can calculate your average monthly energy usage.
2. Add up the numbers recorded beneath “kWh” used on each bill. Then divide this number by 12. This is your monthly average.
3. Divide your monthly average by 30 to get your daily kWh average.
4. You will now have all the information needed to buy the correct number of solar panels for your home.

Research Federal and State Incentives

The U.S. federal government and many state governments offer lucrative incentives for installing solar panel systems on your home or business, in the form of tax deductions and credits. In many cases, this establishes a substantial reduction in how much out-of-pocket you’ll need to spend. The drawback is that you have to wait to get the benefit until your taxes are filed.

The reason for the incentives is based on the current climate crisis and the greenhouse gasses generated by traditional electricity production. In the U.S., hydro-power plants provide energy to many regions, but globally, coal-fired generators are the norm.

This burning of fossil fuels to make electricity is responsible for massive amounts of carbon emissions being added to the atmosphere every day. In fact, just five power plants around the world were responsible for generating 73 percent of global electricity emissions in 2018.

Installing a solar panel system on your business or home is one of the best ways to lessen your carbon footprint because they reduce the need for electricity provided by non-renewable sources.

Solar Energy: Solar Panel Benefits and Drawbacks

According to the Environmental Protection Agency, in the last decade, an increasing number of families and individuals have chosen to install solar panels on their houses. This is partly due to the fact that residential solar panels have become more affordable and the financial benefits are impressive.

Although your decision to install solar panels may stem from a desire to reduce your carbon footprint, you’ll also be able to reduce your home (or business) yearly expenses.

Benefits of Choosing Solar Power

• It reduces your carbon footprint.
• It reduces your electrical bills. The initial monetary investment is quickly surpassed by the amount of money you save on electricity.
• It reduces your dependence on fossil fuels.
• It can improve the value of your residence.
• Low maintenance costs.
• Excess energy is stored and used during the night.
• If you have an electric car, you can charge it directly off your new grid.
• If there is an outage in your area, you will still have electricity because your energy is being produced and used on-site.
• It stimulates interest and investment in solar technologies which often leads to new employment opportunities.
• Depending on your living situation, you may be able to live entirely off the grid and use only solar energy.
• The federal government offers grants, tax incentives, and rebate programs to help with the installation cost.

Drawbacks to Solar Power

• Space: the biggest drawback of solar is the sheer amount of space that needs to be dedicated to it. Luckily, this isn’t as bad as it sounds. Most residential solar panels are installed on roofs, though you can also install them in a yard. You will also need to set aside space for the power bank so that you will have power during the night.
• Cloudy days and winter months lower the amount of energy you can produce. Also, if your house is surrounded by large trees, solar panels may simply not be viable (but there are ways to get around that).
• The initial monetary investment can be quite large. While your solar panels will pay off in the long run, buying the materials and paying contractors to install them can seem daunting.
• Solar panel efficiency is not yet at 100 percent. Solar technologies are still being improved, so the current generation of solar panels may not be as efficient as those in the future.
• Your geographical location may also change the efficiency of your solar panel system. You may need more to supply enough power for your home or business.⁶

Additional Costs Associated With Solar Panel Systems

A standard 6 kW solar system will cost around $20,000 with parts and installation, but there are additional costs that you should also consider. Panels last for approximately 25 years before you’ll need to upgrade or replace them, but there are also batteries, site evaluations, and an inverter to factor into the cost equation.

There are two primary components to a system: panels and inverters. The panel is the part you see on rooftops and is located on the ground, featuring the PV cells that grab energy from the sun. The inverter is the device that converts direct current (DC) electricity into alternating current (AC).

Solar panels (like almost every generator) produce DC which then needs to be converted into AC in order to be used by your home’s appliances, electronics, and heating and cooling system. If you are running your solar panels directly into your house’s electrical panel, you must install an inverter before using the panels.

This is where a contractor is needed. Before installing solar panels, you will need to set up a general site visit and an engineer visit. The general site visit allows a contractor to evaluate how best to install solar panels in your place of residence, and many of these individuals will perform the initial site visit for no charge. They will also provide you with additional information on what exactly you need to order and (if the contractor doesn’t have an engineer on the payroll) provide names of reputable engineering services who can evaluate the structure for feasibility.

An engineer should also visit the site and evaluate the structural integrity of your roof, as well as test the capacity of the electrical panel, and determine whether it needs to be upgraded or updated. In some instances an upgrade is required because newer solar panels may require more amps of current.

After these two visits are completed, you can sign the contract and purchase the materials.

Additional costs also include:

• Changes to your home insurance policy (in some cases, the policy amount may decrease).
• Site ‘surprises’… as with any major home improvement project, the unexpected does happen, so be prepared for ‘change orders’ to the contract, which may increase the labor or installation amount.

Defining the Federal Solar Tax Credit

If you install a solar panel system on your home or business in the United States, you can claim a tax credit on federal income taxes for a percent of the cost of a PV system. This is also true for other renewable energy technologies.

The primary qualification for this solar tax credit is that you have installed and are generating electricity with solar panels. While there are sometimes additional requirements, this fact will almost always qualify you for a tax exemption.

This is particularly important for homeowners looking to install a system by the end of the 2023 tax year. If you choose to install solar panels before then, you are eligible for a 22% solar tax credit, but this is subject to change.

Right now, the tax credit is set to expire in 2024. However, Congress has the opportunity to renew it.

If you have already paid for solar panel installation and are currently using them to produce some percentage of the energy you use every day, then you may also be eligible to receive a solar tax credit.

You can even receive a partial tax credit if you invest in a local solar project. These are off-site projects which act as solar energy lenders. You pay a specific price to receive a certain amount of your energy from renewable sources.

You may wish to contact a legal advisor to gain a better understanding of exactly how you can qualify for the solar tax credit.⁷

What Is a Solar Tax Credit: Are You Eligible to Claim It?

The primary qualification for receiving the federal solar tax credit is by generating electricity, but there are some additional ways to decide whether you qualify for the tax bonus, including:

• Installation of your solar panel system took place between January 1, 2006, and December 31, 2023.
• The solar panel installation was done to your primary or secondary residence in the United States and the electricity generated by the system does not exceed the electricity usage of your home or business.
• You own the PV system and either paid for or financed the solar panel installation.
• The PV system is either new or being used for the first time. The solar tax credit must only be claimed on the initial installation.

Solar Panels Cost Lessened

The following tables show the value of federal tax credits in your state based on when you have installed, or have decided to install a solar panel system.

The first shows the value of a solar tax credit during the 2021 and 2022 tax years, while the second table shows the value of a solar tax credit during the 2023 tax year.

As with the actual installation, prices alternate per state and may continue to change throughout 2022 and 2023 so please seek out an advisor for more information.⁷

 

State	2021-2022 Solar Tax Credit Value (26%)
Alabama	$3,564
Alaska	$3,498
Arizona	$3,557
Arkansas	$3,825
California	$3,962
Colorado	$4,446
Connecticut	$4,040
District of Columbia	$4,087
Delaware	$3,978
Florida	$3,619
Georgia	$4,118
Hawaii	$5,086
Idaho	$4,446
Illinois	$4,352
Indiana	$3,978
Iowa	$3,682
Kansas	$3,472
Kentucky	$3,406
Louisiana	$4,072
Maine	$4,179
Maryland	$4,040
Massachusetts	$4,274
Michigan	$4,165
Minnesota	$4,493
Mississippi	$3,838
Missouri	$3,760
Montana	$4,306
Nebraska	$4,113
Nevada	$3,838
New Hampshire	$4,540
New Jersey	$3,775
New Mexico	$4,337
New York	$4,134
North Carolina	$3,650
North Dakota	$3,524
Ohio	$3,744
Oklahoma	$3,813
Oregon	$3,916
Pennsylvania	$4,009
Rhode Island	$4,212
South Carolina	$4,290
South Dakota	$3,519
Tennessee	$3,616
Texas	$3,853
Utah	$4,009
Vermont	$4,321
Virginia	$4,103
Washington	$3,650
West Virginia	$3,838
Wisconsin	$4,571
Wyoming	$3,734

How Much Do Solar Panels Cost for a 1500 Square Foot House?

It can depend, but that won’t impact the amount of your tax credit value for 2023.

 

State	2023 Solar Tax Credit Value (22%)
Alabama	$3,015
Alaska	$2,960
Arizona	$3,010
Arkansas	$3,237
California	$3,353
Colorado	$3,762
Connecticut	$3,419
District of Columbia	$3,458
Delaware	$3,366
Florida	$3,062
Georgia	$3,485
Hawaii	$4,303
Idaho	$3,762
Illinois	$3,683
Indiana	$3,366
Iowa	$3,115
Kansas	$2,882
Kentucky	$2,882
Louisiana	$3,445
Maine	$3,536
Maryland	$3,419
Massachusetts	$3,617
Michigan	$3,524
Minnesota	$3,802
Mississippi	$3,248
Missouri	$3,181
Montana	$3,643
Nebraska	$3,480
Nevada	$3,247
New Hampshire	$3,841
New Jersey	$3,194
New Mexico	$3,670
New York	$3,498
North Carolina	$3,089
North Dakota	$2,982
Ohio	$3,168
Oklahoma	$3,227
Oregon	$3,313
Pennsylvania	$3,392
Rhode Island	$3,564
South Carolina	$3,630
South Dakota	$2,978
Tennessee	$3,060
Texas	$3,260
Utah	$3,392
Vermont	$3,656
Virginia	$3,472
Washington	$3,089
West Virginia	$3,248
Wisconsin	$3,868
Wyoming	$3,159

Should You Install Solar Panels?

Solar energy and other clean, renewable energy sources, have the potential to make fossil fuels all but obsolete, which would drastically reduce the United States’ greenhouse gas emissions. Although it won’t impact other nation’s use of coal-burning generators, it can make a big difference in your personal carbon footprint or your business carbon footprint… and every little bit helps.

Moreover, this isn’t a distant pipe-dream or the plot of a science fiction novel. Right now, there are nations that get almost one hundred percent of their energy from renewable sources. Countries like Iceland, Sweden, Costa Rica, and Nicaragua have made it their goal to become free of fossil fuels, while countries like Germany produce over 65% of their energy from predominantly solar energy.

There are so many benefits to installing a solar system on your home or business, and those benefits will only increase as engineers and scientists continue to innovate and expand the solar energy field. In fact, according to the Solar Energy Industries Association (SEIA), in 2018, a new set of panels was installed every 100 seconds in the United States and they hypothesized that that number would continue as more and more people committed to renewable energy sources.

Additionally, the solar industry has also seen an expansion. According to SEIA, in 2020, approximately 230,000 people were working in the solar industry. They were divided between 10,000 companies, all looking to improve and innovate on existing technologies.⁹

This expansion has been the product of falling prices. The cost of installing solar panels on a residential building has dropped more than 70% in the last decade and it looks like prices will continue to fall.

While the pandemic has certainly impacted both the industry and its consumers, leading experts are confident that this is just the beginning of a solar energy boom.

Of course, certain prices will not change. At least for now, you will still need to pay engineers and other contractors to install solar panels on your home, but the actual technology will continue to become more affordable.

For now in most states, it only costs around $10,000 to $15,000 to get started with solar, and once you’ve got your own system set up, then you will start to see the difference it can make. Your utility bills will dramatically decrease, the value of your home will increase, and your lifestyle will become increasingly sustainable.

This is the case even if you only receive some of your power from solar. It makes a difference and dramatically improves your relationship with the environment.

That’s the promise of solar. So if you’ve been asking, “how much do solar panels cost,” now you know.¹⁰