Cost to Install Solar Panels: Price per Watt and What Drives It

Installing home solar panels cost a median of $3.60 per watt in 2025 for host-owned systems without a battery, and $3.00 per watt for cash purchases, according to Berkeley Lab’s August 2026 data update. A 7 kW system at those medians runs about $21,000 to $25,200 before incentives. Size, financing, soft costs and incentives drive the final price.

Solar installation cost per watt in 2025 and 2026

Solar installers price systems per watt of panel capacity, so a per-watt figure is the fairest way to compare quotes. Berkeley Lab’s 2026 data update reports these medians for solar-only home systems the owner bought (leases and other third-party-owned systems are excluded), in 2025 dollars, before incentives:

The cash and loan rows cover only the systems whose financing type Berkeley Lab could identify, about 45% of host-owned systems. The 2025 medians for the 100 largest home installers ranged from $2.40 to $6.30 per watt, so quotes for the same system can differ widely.

Quote marketplaces report lower numbers. EnergySage said in April 2025 that the median quoted price on its platform had fallen to $2.50 per watt in the second half of 2024, its lowest since it began tracking in 2014, a figure pv magazine also reported. A quote is an offer on a marketplace, while Berkeley Lab’s figures are prices of installed systems, mostly collected through state incentive programs and utility interconnection records. Use both as a range, not a target.

How the cost of a solar system adds up by size

The total cost of a solar installation is the per-watt price times the system size. These worked examples use Berkeley Lab’s 2025 medians and are not quotes:

Ask each installer for the per-watt price at more than one size, since the total does not always scale neatly with system size. The size you need depends on your electricity use and your roof’s sun, which an installer or a production calculator works out from your bills.

What drives the price of a solar installation

Hardware is a smaller part of a solar bill than most buyers expect. Berkeley Lab estimates that soft costs plus hardware other than panels and inverters made up roughly 80% of the 2025 home installed price. Soft costs include customer acquisition, installation labor, permitting and interconnection, financing fees, taxes and installer profit.

The main things that move a quote:

• Financing. Berkeley Lab’s loan-financed median was $1.50 per watt above the cash median in 2025, potentially due in part to loan fees rolled into the up-front price.
• Permitting and interconnection. Both are soft costs, and the paperwork and wait times vary by town and utility.
• Roof and site. A complex roof, extra mounting work or a needed roof repair adds labor.
• Battery storage. Adding a home battery raises the price. Among cash purchases, Berkeley Lab found the 2025 median for solar paired with storage was $2.10 per watt higher than for solar alone, and 37% of new home solar systems in 2025 came with storage.
• Location. Labor rates, local rules and competition between installers vary by state.

The federal solar tax credit ended for new home systems

The Section 25D residential clean energy credit, which covered 30% of a home solar system, no longer applies to new installations. The IRS says the One, Big, Beautiful Bill ended it for expenditures made after December 31, 2025. Under Section 25D an expenditure counts as made when the original installation is completed, so the IRS says a system installed in 2026 does not qualify even if it was paid for in 2025.

The IRS says the credit is claimed on Form 5695 for the tax year the property is installed, so a system installed by the end of 2025 goes on a 2025 return. Ask a tax professional how the rules apply to your project.

State, local and utility programs still exist in many places, such as rebates, property tax exemptions and net metering. The Database of State Incentives for Renewables and Efficiency (DSIRE) lists them by state. Check each program’s current page, since many have budgets that run out.

Cheaper ways to start with solar at home

A full rooftop system is not the only option. In states that allow it, a plug-in balcony kit capped at 1,200 W can trim daytime grid use with no installer, as our balcony solar guide explains. A portable power station with folding panels gives outage backup without permits; our guide to how much a solar generator costs compares them on cost per watt-hour.

Neither replaces a rooftop system for running a whole house. If your goal is keeping the fridge and internet on in a blackout, solar generators for home backup shows what a battery can carry.

Questions to ask before you sign a solar quote

1. What is the price per watt, before and after any incentives?
2. Is the quote for cash, a loan or a lease, and what is the total paid over the term?
3. Who pulls the permits and handles the utility interconnection?
4. What do the panel, inverter and workmanship warranties cover, and for how long?
5. Which state or utility incentives does the quote assume, and are they still open?

To work out the system size behind a quote, see how many solar panels to run a house. For a small project such as a shed, used solar panels are another way to spend less. More on panel options is in our solar panels section.