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EnergySage Releases 21st Solar & Storage Marketplace Report
Home solar
How much do solar panels cost?
Solar panels typically pay for themselves, and then some.
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Your neighbor just got solar panels and won't stop bragging about their $12 electric bill. Meanwhile, you're still paying $150+ every month and wondering if solar panels are actually worth it—or if they're just another expensive home improvement that sounds better than it delivers.
Here's the truth: For most homeowners, solar panels are absolutely worth it. The average solar shopper saves between $37,000 and $148,000 over 25 years—not including any potential incentives—transforming what feels like a significant upfront cost into substantial long-term savings. 
With electricity rates climbing about 2.8% annually, the financial case for solar panels is strong. Solar's value comes from decades of electricity bill savings that add up over your system's 25-30 year lifetime.
Home solar doesn't work for everyone, though. Let's explore when it makes sense to go solar, when it doesn't, and the factors that determine your solar savings.
Most homeowners save around $50,000 over 25 years
Most homeowners who purchase solar with cash will see a return on their investment in about 10.5 years—but if they have access to any tax credits or rebates, that number will be lower. 
The amount you'll save by going solar varies depending on your electric bill, installation costs, energy usage, and the rebates and incentives available in your area. 
You can maximize your solar savings by shopping around and getting multiple quotes from different installers.
Solar panels make financial sense for most homeowners, but certain conditions maximize your return on investment. Here's when solar is typically worth it:
Solar panels are a long-term investment that generate free electricity for 25-30 years. If you own your home, you'll capture all those benefits. Renters should speak to their landlords before making plans to install a solar energy system.
The more you pay for electricity, the more you'll save by going solar. If you're paying 15+ cents per kilowatt-hour (kWh), solar will likely deliver substantial savings. In states with high electricity rates—like California, Massachusetts, or New York—solar often pays for itself even faster despite higher labor rates.
Without solar panels, the average EnergySage shopper will pay about $87,000 in electricity bills over the next 25 years, according to EnergySage data. If you install solar panels now at an average cost of $29,649 before any incentives, you'll save about $57,000 over the next two and a half decades.
Installation costs vary significantly by location and installer. In 2025, an average 12 kilowatt (kW) solar panel system costs about $29,649 before incentives on the EnergySage Marketplace. By comparing multiple quotes, you can ensure you're getting a fair price without sacrificing quality. EnergySage shoppers save an average of 20% by comparing quotes before they commit.
South-facing roofs with minimal shade are ideal, but east- and west-facing roofs can work too. If your roof needs replacement soon, consider doing it before installing solar—your panels will last 25-30 years, so your roof should too.
If your roof isn't right for solar, but you have a big property, it's also worth considering ground-mounted solar panels.
Solar batteries extend your energy independence and provide backup power during outages, but they add an average of $11,000 to your system cost. They're most valuable in areas with time-of-use rates, frequent outages, minimal net metering benefits, or strong battery incentives.
For more and more homeowners going solar, batteries are becoming essential, rather than a nice-to-have, for peace of mind and maximum savings.
While solar works for most homeowners, certain situations make it less attractive or financially unviable. Here's when solar panels typically aren't worth the investment:
Just like you can't remodel your kitchen as a renter, you can't install solar panels on a roof you don't own. Most landlords are unlikely to approve permanent modifications that primarily benefit tenants, unless they have specific incentives available to them.
The primary way solar saves you money is by offsetting electricity costs with free electricity from the sun. If you're paying less than 10 cents per kWh, solar's payback period extends significantly. Your 25-year savings may still be positive, but the return on investment will be slower. Run the numbers carefully before committing.
Some installers charge significantly more for identical equipment. If quotes seem significantly higher than EnergySage's national average of $2.53 per watt, it's worth getting additional estimates.
Be wary of door-to-door salespeople or companies advertising "free solar" or prices that seem too good to be true. These offers often involve hidden fees that aren't disclosed upfront, low-quality equipment that won't last, or aggressive sales tactics and pressure to sign immediately.
Legitimate solar companies will provide transparent pricing, detailed proposals, and give you time to make an informed decision. The best way to ensure you're getting a fair price is to compare quotes from multiple installers.
Heavily shaded roofs, north-facing orientations, or roofs that need immediate replacement can make solar impractical or expensive. If your roof doesn't get at least 4-5 hours of direct sunlight daily, rooftop solar might not make sense for you.
Alternative solutions like ground-mounted solar panels may work if you have adequate yard space, but these aren't available to everyone and typically cost more than rooftop installations.
Solar is a long-term investment that requires some patience before you see a return. The average homeowner will save between $37,000 and $148,000 over 25 years, but it varies based on the following factors:
As of 2025, solar costs have hit all-time lows. As solar deployment continues to grow, the cost of installing solar panels will likely decrease further.
Some of the most significant factors that will impact your solar cost and savings include system size, equipment quality, roof characteristics, labor costs, and location. The amount of electricity you use determines how much energy your system needs to produce—generally speaking, a bigger system with more panels will have a higher average cost than a system with fewer panels. 
While cheaper solar panels may seem like the easiest way to save money on a solar panel system, investing in high-quality equipment usually means greater long-term savings. Installer prices vary substantially, even if they're installing the same equipment—you'll probably pay more for an installer with a strong labor warranty and high skill level, but it could be worth it. Solar prices also differ from state to state, with generally lower prices per watt in warm states and higher prices in cold states, though this isn't always true.
Like we explained earlier, it's important to know how much electricity you use and how much you pay for it. When you go solar, you reduce or eliminate your monthly electricity bill, so your current electricity costs impact how much you can save.
Solar rebates and incentives can significantly reduce your total solar cost or put money back into your pocket each month.
The federal solar investment tax credit (ITC) expires for systems installed after December 31, 2025. For most homeowners, this credit is no longer accessible due to limited installer capacity.
However, many states, municipalities, and utilities offer solar incentives, including:
Tax credits or rebates
Property tax exemptions
Net metering programs
Solar renewable energy certificates (SRECs)
Low-interest financing programs
Not everyone will be eligible for all solar rebates and incentives, so always confirm eligibility requirements before proceeding with an installation. Check out the Database of State Incentives for Renewables and Efficiency (DSIRE) to see which incentives are available near you.
It takes about 10.5 years to break even on your solar costs without incentives. If you think you might move before you reach your payback period, purchasing a solar panel system may not be worth it.
However, adding a solar panel system can still benefit you financially if you move. According to new research from SolarInsure, which looked at thousands of California homes, solar panels can increase your home's value by about 5-10%. Just be wary of leasing solar panels if you think you might move. Leases are typically long-term and can be difficult to cancel, making it more challenging to sell your home.
Think of solar financing like buying a car: You can pay cash, finance it, or lease it—each choice changes what you'll pay over time.
The right choice depends on your financial priorities. If maximizing returns matters most and you don't need that capital elsewhere, buy with cash. If you want ownership benefits while keeping funds available, finance with a loan. If you want immediate savings while preserving maximum capital flexibility, consider a lease or power purchase agreement (PPA).
Buying outright delivers the highest lifetime savings. You'll avoid interest payments and own your system from day one. However, this requires significant upfront capital and ties up funds that could be used elsewhere.
Solar loans let you own your system with less money—sometimes $0—down, spreading costs over 5-25 years while immediately benefiting from energy savings. Yes, you'll pay interest, but you'll still come out way ahead compared to rising utility bills. And, you'll maintain liquidity for other opportunities while qualifying for any available state incentives.
With a solar lease or PPA, you pay a fixed monthly amount or per-kWh rate—which should be lower than your current utility rates—while the solar company owns, maintains, and monitors the system.
You preserve capital completely, have no maintenance responsibilities, and since these projects still qualify for tax credits, the right provider should pass some of those savings to you through lower rates. However, you'll see lower lifetime savings than ownership, and annual rate escalators mean payments increase over time.
Use our solar calculator to see exactly how much you'll save over 25 years by paying for solar with cash, taking out a loan, or signing a lease/PPA.
The average EnergySage shopper breaks even on solar in 10.5 years, assuming no incentives are applied. However, this payback period varies based on your system cost, financing choice, available incentives, and electricity savings.
You can calculate your specific payback period with this formula: 
Payback period = (Gross solar energy system cost – upfront incentives) ÷ (Annual savings + additional state and/or utility incentives).
For example, if your system costs $30,000 and you have access to a $5,000 state tax credit, your net cost is $25,000. If you pay $200 monthly for electricity before solar, you'll save $2,400 annually on electricity. That means your payback period will be about 10.4 years ($25,000 ÷ $2,400 = 10.4 years).
With a $0 down loan, lease, or PPA, you won't have upfront costs, but your annual savings will be lower. Your payback period is essentially immediate since you start saving from day one, though your total lifetime savings will be lower than if you purchased the system with cash.
Solar panels are worth it for the vast majority of homeowners. If you own your home, pay decent electricity rates, and have a suitable roof, the investment will likely pay off handsomely over time—whether you buy, finance, or lease.
The key is doing your homework: Get multiple quotes, understand your financing options and available incentives, and don't rush into any decisions. Solar is a long-term investment that can transform your relationship with energy costs—but only if you approach it thoughtfully.
Most homeowners save around $50,000 over 25 years
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