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The short answer is: it depends on where you live and how you finance it. Panel prices have dropped significantly over the past decade, but the removal of a key federal tax credit changes the math for many homeowners in 2026.
What Solar Costs in 2026
The average cost of residential solar panels in the U.S. sits between $15,000 and $25,000 before incentives, translating to roughly $2.50 to $3.50 per watt of installed capacity. intelamp
A typical home requires about 12 kilowatts of solar energy to meet its electricity needs, costing an average of $30,505 before incentives, according to EnergySage data. Systems average about $2.58 per watt before incentives. HeiSolar
How Much Prices Have Fallen
Solar photovoltaic costs have fallen by 90% over the last decade. These technologies follow a learning curve where the cost falls consistently as cumulative production increases. Tom’s Guide
Ten years ago, a home solar installation cost $3.16 per watt according to the National Renewable Energy Laboratory. That is 22% more than current EnergySage figures. HeiSolar
The Federal Tax Credit Change
This is the biggest cost factor in 2026.
The Section 25D consumer solar tax credit, which gave homeowners a 30% credit on installation costs, expired at the end of 2025 under the One Big Beautiful Bill. Inlux Solar
At the federal level, only the Section 48E Clean Electricity Investment Credit remains available for residential solar in 2026. This credit applies only to businesses, not individual taxpayers. Homeowners benefit from it through third-party arrangements such as leases, power purchase agreements, and prepaid products. intelamp
Prices on Solar.com increased by roughly $0.15 per watt after the One Big Beautiful Bill signing for comparable system sizes, compared to the first half of 2025. This represents a modest increase of roughly 5% for projects including a battery. Jackery
State Incentives Still Apply
Many states offer additional incentives including tax credits, tax exemptions, and rebates. New York, for example, offers the NYSERDA rebate, a 25% state tax credit, and sales and property tax exemptions for solar installations. intelamp
Your location determines your real cost. California and Massachusetts sit above average in price due to higher labor costs and stricter regulations. Arizona and Texas sit around or below average. Induction Lighting Fixtures
Is It Still Worth It?
Nationally, electricity costs rose nearly 25% over the past five years, well beyond the pace of inflation. A $30,000 system installed in 2026 saves an estimated $40,000 to $50,000 in avoided utility costs over its 25-year warranty period. Enkonn Solar
For every 1% reduction in interest rates, solar loan costs drop by roughly $0.15 per watt. With the Federal Reserve lowering rates, long-term solar loans are expected to follow. Jackery
Key Numbers at a Glance
Average system cost before incentives: $15,000 to $30,505 (EnergySage, Solar.com, 2026)
Cost per watt: $2.50 to $3.50 (Solar.com, 2026)
Solar panel cost drop over 10 years: 90% (IRENA, Our World in Data, 2025)
Federal consumer tax credit: Expired end of 2025 (SEIA, 2025)
Estimated 25-year savings on a $30,000 system: $40,000 to $50,000 (Empire Solar NY, 2025)
Solar is cheaper per watt than it has ever been. Without the 30% federal tax credit, your upfront cost is higher than it was in 2024 or 2025. Whether it is cheaper for you comes down to your state incentives, your financing terms, and your current electricity bill. Get multiple quotes from local installers and compare them against your monthly utility costs before you decide.
