What does solar panel installation actually cost?
A breakdown of what goes into the price of a home solar system, what makes your quote go up or down, and how to get a number specific to your roof.
Installation cost breakdown
Solar installation costs are made up of several components — equipment, labor, permitting, and overhead. Based on national industry benchmarks (NREL Q1 2024 Solar Cost Benchmark, ~8kW residential rooftop system), here's roughly how each dollar of an install breaks down:
| Category | Cost per watt |
|---|---|
| Customer acquisition & origination | ~$0.84 |
| Overhead & margin | ~$0.73 |
| Inverter | ~$0.34 |
| Panels | ~$0.30 |
| Electrical balance of system | ~$0.26 |
| Taxes | ~$0.24 |
| Labor | ~$0.22 |
| Structural balance of system | ~$0.11 |
| Permitting, interconnection & inspection | ~$0.09 |
| Logistics & miscellaneous | ~$0.08 |
| Design & engineering | ~$0.07 |
| Total | ~$3.28/watt |
Source: NREL Q1 2024 Solar Cost Benchmark, residential rooftop system. Figures are national averages and will vary by system size, roof type, and equipment selected.
For a typical 8kW system (about 19 panels), that works out to roughly $26,000 if purchased outright — in line with national averages, which put the typical cash price of a home solar system at around $25,000 today.
What affects your price
Sized to your actual usage from utility bills — more panels for higher usage, less for a smaller home.
Roof material, pitch, shading, and number of stories affect labor and mounting hardware.
Premium panels and microinverters (e.g. Enphase) cost more upfront but often carry longer warranties.
Adding backup battery capacity (like Tesla Powerwall) increases cost but keeps power on during outages.
Older homes sometimes need a panel upgrade to safely support a new solar system.
Permit and interconnection timelines and fees vary by city and utility (SCE, SDG&E, LADWP, etc).
Financing options
Most homeowners pay for solar one of two ways: cash purchase, which has the highest long-term savings since there's no interest, or a solar loan, which spreads the cost over time with $0 down in many cases. We'll walk you through both during your consultation so you can pick what fits your budget.
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