cover cost of solar

How much does solar panel installation cost?

The primary question when considering solar panels on your home or business’s roof is how much solar panel installation costs. Millions of solar panels across America have now been to the roofs of homes and businesses. And more and more homes and businesses are choosing to power up their daily lives by utilizing the sun’s energy through solar power. As the cost of solar panels and related solar equipment like solar inverters and rails continues to drop, rooftop solar installations continue to grow in adoption with no signs of slowing down.

Based on research from Solar Energy Industries Association (SEIA), over 1.9 million homes in the United States now feature solar installations. That number is projected to cross the 2 million mark this year, and the number of households with solar installations is anticipated to hit 4 million by 2023.

Solar energy is a cornerstone of sustainability. It now replaces more than 73 million metric tons of CO2 emissions annually. The amount of CO2 emission discharge that has been reduced is the equivalent of taking 15.6 million automobiles off of the road or planting 1.2 billion trees. If we do hit 4 million home installations in 2023, those numbers should be double. Imagine what the impact would be if we 30 million automobiles were taken off of the road or the equivalent of planting 2.4 billion trees.

Understanding Home Solar Installation Prices

The solar power installation quote should cover the cost of everything needed to install solar panels on your business or home. The solar panel installation costs include everything from the cost of the solar panels, solar inverter, other hardware, labor, the local permits, paperwork, and even the solar company’s business expenses. 

In terms of the cost of the hardware, the most significant factors are the size of the system and the quality of the solar panels. Also, you need to pay for the labor to properly design where the solar panels will be placed on your roof, home or business site inspection, and the solar panel system installation.

As you begin to explore solar panel installation quotes for your home or business, you might notice significant cost differences. There are several reasons for the vast range of pricing. First, there is the cost of solar equipment- not all solar panels are created equal. More efficient solar panels and certain brands will come with a higher price tag. The best way to gauge their efficiency is through the datasheet of each solar panel. 

solar design quote consultation
Maximize South & West Facing Roofs

While the solar equipment cost tends to make up the most significant part of the solar energy system quote, obtaining the proper permits and skilled labor also carries considerable costs. Furthermore, additional charges could come with extended warranties that go beyond the solar panel equipment guarantees and interconnection fees with your utility provider. The characteristics of your home or business may also play a part in the total cost of the solar panel installation. Certain rooftops or scenarios could make it a bit more challenging to install solar panels. For example, homes that are very steep or have a flat roof may require additional costs. The ideal roof layout would be if your rooftop faces south, has little to no shade, and slopes at a 30-degree roof tilt.

If the cost of solar panel installation sounds a little bit pricey, don’t worry! There are Federal and Local incentives and discounts available for installing solar panels, including a 26% tax credit from the Federal government if you make a financial investment towards getting a solar energy system in 2020. The solar panel installation company you work with should be able to help you access any additional local rebates and incentives that your home or business may qualify for. 

itc federal solar tax credit commercial

Average Home Solar Installation Cost

The easiest way to calculate the cost of a solar panel installation is to look at the price per watt. Most homeowners around the United States currently are consistently paying between $2.90 and $3.90 per watt for their solar panel installation. 

Knowing the average cost per watt for solar panel installation is helpful, but what does $3.00 per watt mean to you?

Let’s say the average solar energy system size in the United States is approximately 5 kilowatts. The system size, of course, all this depends on how much electricity you want to generate. But based on the average price of $3.00 per watt, a 5-kilowatt system will cost $15,000 pre-Federal Investment Tax Credit (ITC) or $11,100 after the 26% Federal Tax Credit is applied. 

A 6 Kilowatt Solar Energy System will cost $18,000 and $13,320 after the 2020 26% Federal Tax Credit is applied. 

A 8 Kilowatt Solar Energy System will cost $24,000 and $17,760 after the 2020 26% Federal Tax Credit is applied. 

A 8 Kilowatt Solar Energy System will cost $24,000 and $17,760 after the 2020 26% Federal Tax Credit is applied. 

A 10-kilowatt system will cost $30,000, and $22,200 after the 20202 26% Federal Tax Credit is applied. 

You will typically be able to receive a free solar panel installation quote from local solar installers once you register your property or request a quote directly from them. Large solar installation companies will be between 10-20% more expensive than a smaller solar company. If you have offers from some big solar companies, compare those with quotes from local installers to make sure you’re not overpaying for your solar panel installation costs. Getting multiple solar bids can help you compare costs and savings based on solar installation packages.

Solar Installation Costs Breakdown by Cost per Watt

Here’s a breakdown of the home solar installation costs, based on findings from the National Renewable Energy Laboratory (NREL):

  • Design & Engineering Labor Costs: $0.30 per watt 
  • Solar Panel Costs: $0.47/Wdc 
  • Solar Inverter Price: $0.12/Wdc - $0.39/Wdc 
  • Local Permit/Inspection: $0.06/Wdc 
  • Structural BOS: $0.10/Wdc
  • Electrical BOS: $0.19–$0.27/Wdc (Differs by solar inverter options)
  • Sales tax varies by location; weighted national average: 6.9%
  • Electrician Costs: $19.74–$38.96 per hour (Differs by location and inverter option)
  • Solar Installation Laborer Costs: $12.88–$25.57 per hour (Differs by location and inverter option)
  • Burden Rates (% of direct labor) Total nationwide average: 31.8%


*These costs that make up a solar panel installation are based on an average 6.2-kilowatt solar system. The value of each system will differ depending on the solar panel manufacturer, solar panel wattage, solar inverter option, location, and solar component equipment.

How much money does solar power save me?

The amount of money you can save by installing solar panels on your roof will depend on a few factors. The primary factors are: 

1. How much electricity your home or business uses
2. The cost of that electricity
3. The size of your solar energy system
4. How much electricity your solar power system can generate (Sunlight Exposure + System Size)

By going solar, you will be able to offset the electricity rates set by your utility company and how much the utility company will offset from the electricity you send back to the electrical grid. Check out our guide into how you can get more insight into covering the cost of going solar.

Money Saving Experts: Look Beyond Solar Energy Cost Savings.

Perhaps more important than how much money you will save is the financial benefit solar brings to you and your family beyond cost savings. Adding a solar energy system on your roof will increase your home or business’s resale value. Solar panels are perceived as home improvement upgrades, and it increases home values by an average by 4%! So for a $500,000 home in California, adding solar could add $20,000 to your home’s valuation. Additionally, homes with solar panels sell faster than homes and businesses without a solar energy system on their property. All things being equal, wouldn’t you prefer living in a home where with no electricity bill thanks to solar? Nobody wants to pay an electric bill if they can avoid it. 

solar panels roof home happy family

From another standpoint, solar panel installations are also a cost-saving measure. You and any future owner of the home can decrease your electricity bill costs by taking advantage of sunlight to offset your utility bill. Take advantage of freely-available, no-cost renewable energy by going solar!

Forme Solar Offers Solar Panel Installation a Low Cost

To ensure you pick the right solar panel installation company, you should consider multiple options before making a final decision. Getting a solar quote from Forme Solar is one of the best ways to guarantee that you’re paying a fair price for the right quality system. We ensure that our solar energy system is designed correctly to meet your energy needs. By properly sizing your solar energy system, we can fit your budget, diminish your carbon footprint, and help reduce your long-term electric utility company expenses.

Our mission is to empower homeowners in their shift their energy consumption to renewable energy sources. We hope that by substantially reducing their electricity costs and offering the best quality solar panel installation will help accelerate the road to sustainability. Work with one of the best solar companies serving San Diego, Riverside, Los Angeles, San Bernardino, and Orange County. Give us a call at 714-694-2262 or schedule a call with our friendly and knowledgeable staff.