Solar panel cost calculator

Updated 2026-10-25

This solar panel cost calculator works on paper instead of in a widget. You need three numbers: how big a system you need, what installers in your area charge per watt, and which incentives you qualify for. Four short steps take you from your electric bill to an estimated net cost and payback period, and a worksheet at the end lets you plug in your own numbers.

The formula

Every solar cost estimate, whether it comes from an installer’s quote or an online calculator, comes down to two lines:

• Net system cost = system size (kW) × 1,000 × installed price per watt − incentives
• Payback period (years) = net system cost ÷ yearly bill savings

System size is in kilowatts (kW), and installers price systems in dollars per watt, so the 1,000 converts one to the other. A 7 kW system at $3.00 per watt costs 7,000 × $3.00 = $21,000 before incentives.

Prices, electricity rates and incentives change every year, but this formula doesn’t. If you remember only one thing from this page, remember these two lines. Most of the work is finding good inputs for them.

Step 1: Size your system

System size comes from how much electricity you use and how much sun your roof gets. Your utility bills show your yearly use in kilowatt-hours (kWh). Divide that by what one kilowatt of panels produces in a year where you live, and you have the system size that covers your use.

Working out that second number takes some care, because it depends on your location, roof angle and shading. Our guide to how many solar panels you need walks through it. Come back with a system size in kW and you’re ready for Step 2.

Step 2: Find your price per watt

The installed price per watt covers everything: panels, inverter, racking, wiring, labor, permits, interconnection and the installer’s overhead and margin. Panels themselves are a small share of it. Berkeley Lab estimates that soft costs and other non-hardware costs make up roughly 80% of a typical residential system’s installed price.

What moves your price up or down:

• Your roof. Steep, tall or complex roofs with many angles take longer to work on. Tile and slate roofs cost more to mount on than asphalt shingle. If your roof needs replacing soon, do it first, because removing and reinstalling panels later is expensive.
• Panel and inverter type. Higher-efficiency panels and microinverters or optimizers usually cost more per watt. They can be worth it on a small or partly shaded roof.
• System size. Fixed costs like permits and design get spread over more watts in a bigger system, so the price per watt usually drops as size goes up.
• Your region. Labor rates, permitting rules and local competition vary by state and even by county.
• How you pay. Berkeley Lab found that loan-financed systems carried a higher up-front price than cash purchases, partly because of dealer fees built into the loan. Ask any installer offering financing what the cash price would be.
• The installer. Prices vary widely between companies for similar systems, which is the best reason to collect several quotes.

To find your own number, get at least three quotes from local installers and divide each quote’s total price (before incentives) by its system size in watts. That gives you a like-for-like price per watt. Online quote marketplaces let you collect several bids at once.

Typical costs

Every current figure on this page lives in this table, so it can be checked and updated in one place. Use it for a first estimate, then replace it with the price per watt from your own quotes and the rate on your own electric bill.

The two price sources measure different things. Berkeley Lab reports prices actually paid across most of the U.S. market. EnergySage reports quotes from installers competing on its marketplace, which tend to run lower. A quote well below the Berkeley Lab range is a good deal; one well above it is worth questioning.

Step 3: Subtract incentives

Incentives lower the up-front cost or raise the value of what your panels produce. The main kinds:

• State and local rebates or tax credits. Some states, cities and counties pay a rebate per watt installed or offer a state income tax credit. Many have none.
• Utility rebates. Some utilities offer their own rebates, especially for systems paired with a battery.
• Property and sales tax exemptions. Several states exempt solar equipment from sales tax, or exclude the added home value from property tax assessments.
• Net metering or net billing. This isn’t a discount on the system, but it sets how much your utility credits you for power you send back to the grid. It matters a lot for Step 4.
• Performance payments. A few states pay for each unit of solar power produced, sometimes through renewable energy certificates (SRECs) you can sell.

The best place to check what applies to your address is DSIRE, a database of state, local and utility incentives run by the N.C. Clean Energy Technology Center at NC State University. Also check your utility’s website for its rebates and its net metering rules.

The federal tax credit is gone for most buyers. The federal residential clean energy credit (Section 25D) used to cover 30% of a system’s cost. The July 2025 tax law ended it for systems installed after 2025: under IRS guidance, the date that counts is when installation is completed, not when you paid. See the typical costs table above for its current status. If you lease a system or sign a power purchase agreement, the company that owns the panels may still be able to claim business tax credits, so ask how that is reflected in your price.

Subtract the incentives you qualify for from the gross price you got in Step 2, and you have your net system cost.

Step 4: Estimate payback

Your yearly savings are the electricity your system produces, valued at what you would otherwise pay for it:

• Yearly savings = kWh your system produces in a year × your electricity rate ($ per kWh)
• Payback period = net system cost ÷ yearly savings

Use the rate on your own bill: the total you pay divided by the kWh you used, including delivery charges. The national average in the typical costs table above is only a starting point, because rates vary widely between states and utilities.

This simple version assumes every kWh your panels make is worth your full retail rate. That’s close to true if you use the power as it’s produced, or if your utility offers full retail net metering. If your utility credits exported power at a lower rate (common under net billing), your real savings will be lower and the payback longer. It also leaves out a few things that pull in opposite directions: electricity rates tend to rise over time, panels lose a little output each year, and an inverter may need replacing at some point in the system’s life.

Worked example

This is a made-up house with round numbers, chosen to show the method. It isn’t a quote or a typical result. Swap in your own numbers using the worksheet below.

Assumptions: the house uses 10,800 kWh a year. Each kW of panels on this roof produces 1,350 kWh a year. Installers quote $3.00 per watt, the state offers a $1,000 rebate, there’s no federal credit, and the household pays $0.18 per kWh with full retail net metering.

Change any input and the result moves with it. At $2.60 per watt, the same house’s net cost falls to $19,800 and the payback to about 10.2 years. At $0.12 per kWh, the payback stretches past 17 years. That’s why your own quotes and your own electricity rate matter more than any average.

Your worksheet

Copy this table into a spreadsheet or onto paper and fill in the blanks. Lines 1 and 2 come from Step 1, line 5 from your quotes, line 7 from Step 3 and line 9 from your electric bill.

If you’re sizing a system to cover only part of your use, put your chosen size on line 3 and skip line 1. To compare quotes, fill in lines 5 to 8 and line 12 once for each quote.

Frequently asked questions

How much does a 10 kW solar system cost?

Multiply 10,000 watts by the price per watt. Using the per-watt figures in the typical costs table (about $2.60 to $5.20 per watt as of October 2026), a 10 kW system costs roughly $26,000 to $52,000 before incentives. The only way to know your own price is to get local quotes.

Is solar worth it?

It depends mostly on two numbers: your electricity rate and how your utility credits the power you export. High rates and full retail net metering make payback faster; low rates and low export credits make it slower. Work out your payback with the worksheet above, then compare it with how long you plan to stay in the home and how long the panels are warrantied to produce (often 25 years).

How long do solar panels take to pay for themselves?

Divide your net system cost by your yearly bill savings. In the worked example above, that comes to about 12 years, but changing the price per watt or the electricity rate can move it several years in either direction. With the federal tax credit gone for systems installed after 2025, payback periods are longer than they were when the 30% credit applied.

Is there still a federal tax credit for home solar?

Not for systems you own that were installed after December 31, 2025. The July 2025 tax law ended the residential clean energy credit for those systems, according to IRS guidance (see the typical costs table above). State, local and utility incentives are separate and may still apply: check DSIRE and your utility.