Assumes 3%/yr rate increases, 0.5%/yr panel degradation and no federal tax credit (the 30% §25D credit ended for systems installed after Dec 31, 2025). How we calculate
Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
Global solar costs have fallen about 90% since 2010, but that headline does not describe what a US homeowner pays. IRENA reports that utility-scale solar PV installed cost fell 87% between 2010 and 2024, from $5,283 to $691 per kilowatt. US rooftop systems fell by much less, because hardware is now a minority of the bill. Berkeley Lab’s 2025 data update puts the median 2024 residential price at about $4.00 per watt before incentives.
One fact matters more than any trend line: the 30% federal tax credit for homeowners ended on December 31, 2025. Many older articles, including earlier versions of this guide, still describe it as available through 2032. It is not. This guide uses current sources to show how solar prices fell, what a system costs now, and how to calculate payback without the federal credit.
⚡ System Size
How Solar Prices Fell: Modules, Scale, and Soft Costs
Solar followed a learning curve known as Swanson’s law: module prices fall roughly 20% each time cumulative shipments double. Our World in Data, using inflation-adjusted figures, shows module prices falling from about $106 per watt in 1976 to $0.38 per watt in 2019. Bloomberg New Energy Finance data cited by Human Progress show silicon cell prices dropping from $76 per watt in 1977 to $0.24 per watt in 2018.
Three forces drove the drop. Manufacturing scale, led by large Chinese factories, cut cell and module costs. Process improvements reduced silicon waste and energy use per watt. And higher efficiency delivered more power from the same materials. IRENA reports that module price declines have been around 90% since the end of 2009.
Data visualization
Global utility-scale solar installed cost fell 87% from 2010 to 2024. Cost dropped from $5,283 to $691 per kW (2024 dollars). Source: IRENA, Renewable Power Generation Costs in 2024.
Chart summary: IRENA’s global weighted average for newly built utility-scale solar fell from $5,283 per kW in 2010 to $691 per kW in 2024 (2024 dollars). That is the source of the widely quoted “90%” figure. It describes large power plants worldwide, not a single US rooftop.
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💰 System Cost
What US Homeowners Pay for Solar in 2026
The right price depends on which dataset you use. Quote-marketplace averages run lower than what all homeowners actually paid, because shoppers who compare quotes tend to find cheaper installers. The most recent Berkeley Lab data (systems installed in 2024) is the best measure of real transactions.
Data visualization
Four benchmarks put US residential solar between $2.58 and $4.00 per watt before incentives. Blue bars are quote and modeled prices; orange bars are Berkeley Lab medians for 2024 installs. Source: EnergySage, NLR, Berkeley Lab 2025 Data Update.
Chart summary: Benchmarks range from $2.58 per watt (EnergySage marketplace average) to $2.95 (NLR’s modeled Q1 2025 price), $3.50 (Berkeley Lab median for cash purchases) and $4.00 (Berkeley Lab overall median). On an 8 kW system, that spread is roughly $20,600 to $32,000. The gap is the point: comparing quotes can matter more than any national average.
Installer pricing varies widely. Berkeley Lab found that in 2024, median prices across the 100 largest residential installers ranged from $2.7 to $6.5 per watt. Berkeley Lab also reported a median residential system size of 7.4 kW in 2023, which is why this guide uses an 8 kW example. Use our solar system size calculator to estimate the right capacity for your usage, and see our guide to how much solar panels cost for state-level detail.
State electricity rates shape the value of that price. Recent EIA-based tallies show residential rates above 40 cents per kWh in Hawaii, roughly 32 cents in California, and about 30 cents in Massachusetts, versus roughly 11–13 cents in the lowest-cost states. A kilowatt-hour from your roof is worth far more in the first group than the second.
Solar vs utility company · 25-year comparison
25-year totals: 3%/yr rate increases, 0.5%/yr degradation, no federal credit. Methodology
The Section 25D Residential Clean Energy Credit allowed homeowners to claim 30% of solar and battery costs. The One Big Beautiful Bill Act, signed July 4, 2025, ended it. The IRS states that the credit is not allowed for expenditures made after December 31, 2025, and that if installation is completed after that date, the expenditure is treated as made after it. Home batteries were covered by the same credit, so standalone storage purchased in 2026 no longer qualifies either.
If your system was placed in service on or before December 31, 2025, you can still claim the credit on your 2025 federal return. For systems installed in 2026, look at what is left:
State incentives.New York offers a state tax credit of 25% (capped at $5,000) and a property tax exemption for added home value. Massachusetts offers a 15% state credit (capped at $1,000) and a sales tax exemption on solar equipment. Arizona and Florida offer sales and property tax exemptions. Confirm current terms before you buy.
Net metering and export rates. How your utility credits exported power can change savings by thousands of dollars. Review our net metering calculator.
Leases and power purchase agreements. Third-party-owned systems may still be financed using commercial tax credits under current law, subject to deadlines and sourcing rules. Ask any installer how the credit is treated and read the contract’s escalator and buyout terms.
Utility and local programs. Rebates change often. The DSIRE database lists current state, local, and utility incentives.
⚡ System Size
How to Calculate Solar Payback Without the Federal Credit
Payback depends on three inputs: net system cost, annual production, and the value of each kilowatt-hour you offset. Here is a transparent example with stated assumptions. It is illustrative, not a quote.
System: 8.0 kW, about 20 panels of 400 W.
Price: $3.00 per watt, or $24,000. This sits between NLR’s $2.95/W modeled price and Berkeley Lab’s $3.50/W cash median.
Production: 8 kW × 4.5 peak sun hours × 365 days × 0.80 system efficiency, or about 10,500 kWh a year. This is close to the roughly 10,800 kWh a year that a home using 899 kWh a month consumes.
Electricity value: 17.3 cents per kWh, the 2025 US residential average, applied to all production (full retail-rate net metering).
Year-one savings are about $1,820. Simple payback is $24,000 ÷ $1,820 ≈ 13 years at flat rates, or about 11 years if electricity prices rise 3% a year. Over 25 years at flat rates, avoided bills total about $45,500, a net of about $21,500 before panel degradation, maintenance, and inverter replacement.
Data visualization
An 8 kW system bought for $24,000 breaks even in about 13 years at flat rates and about 11 years with 3% yearly rate growth. Assumes 10,500 kWh a year at 17.3 cents per kWh, no degradation, no federal credit. Source: editorial calculation using EIA 2025 average rate.
Chart summary: The flat-rate line crosses zero near year 13 and ends year 25 at about +$21,500. The 3% growth line crosses near year 11 and ends near +$42,000. Both ignore panel degradation, maintenance, and inverter replacement, so real results will be somewhat lower.
Results shift quickly with your inputs. A $2.60/W quote shortens payback, while partial self-consumption under reduced export rates lengthens it. Run your own numbers with the solar payback calculator and solar savings calculator.
💰 System Cost
Should You Wait for Lower Solar Prices?
For most of the 2010s, waiting made sense because prices fell fast. That is no longer the pattern in the US. Berkeley Lab’s residential data show declines of roughly $0.1–$0.2 per watt a year, and IRENA’s 2025 cost report says solar PV installed costs fell about 6% globally in 2025. Hardware is now a small share of what you pay, so cheaper panels move the total less than they used to.
Electricity prices point the other way. EIA data compiled by True Driving Cost put the US residential average at 13.15 cents per kWh in 2020 and 17.30 cents in 2025.
The US residential average rose 31.6% in nominal terms over those five years. Higher rates raise the value of each kilowatt-hour a system produces, which is why payback can shorten even when equipment prices are flat. Rates are not guaranteed to keep rising, so treat the 3% growth case as an upside scenario, not a forecast.
Waiting can still make sense in specific cases: you expect roof replacement soon, you may move within a few years, or your utility is changing its export rules. Otherwise, compare at least three quotes, price the system per watt, and run payback with your actual rate and sun hours.
Direct answers for US homeowners — sized for a $150/month electric bill.
Globally, a lot: IRENA reports utility-scale solar PV installed cost fell 87% from 2010 to 2024 ($5,283/kW to $691/kW), and solar electricity cost fell 90%. US rooftop systems fell less because soft costs dominate. Berkeley Lab reported a median near $6.20/W in 2010 and $4.00/W for 2024 installs, a drop of roughly one-third to one-half.
No. The One Big Beautiful Bill Act ended the Section 25D Residential Clean Energy Credit for expenditures made after December 31, 2025. The IRS says installation must be completed by that date to qualify. Homeowners whose systems were placed in service in 2025 can still claim it on their 2025 return. Some state and local incentives may still apply.
Recent benchmarks cluster between about $2.60 and $4.00 per watt before incentives. EnergySage quotes average about $2.58/W, NLR's Q1 2025 modeled price is $2.95/W, and Berkeley Lab's 2024 medians are $3.50/W for cash purchases and $4.00/W overall. At those prices, an 8 kW system costs roughly $21,000 to $32,000.
It depends on system price, sunshine, and your electricity rate. In a simple example, an 8 kW system costing $24,000 and offsetting 10,500 kWh a year at 17.3 cents per kWh saves about $1,820 in year one, a payback near 13 years at flat rates, or about 11 years if rates rise 3% annually.
Evidence does not support waiting for a big discount. Berkeley Lab found US residential prices falling only about $0.1–$0.2/W per year over the past decade, and IRENA says global solar installed costs fell about 6% in 2025. Meanwhile, US residential electricity prices rose from 13.15 to 17.30 cents per kWh between 2020 and 2025.
Same usage, bill-based guide
Your Solar Panel Cost Over Time target maps to roughly a $150/month electric bill nationally.
18.19¢/kWh — US average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.5 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
National blend — solar assumed to offset 75% of the bill (87% in full-retail net-metering states, 55–70% elsewhere).
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.