Solar Cost Calculator

Total installation cost after the 30% federal tax credit and state incentives.

System details

System size?

Cost per watt?

$/W

Incentives & add-ons

Federal ITC %?

State / utility incentive?

Battery storage add-on?

Total installation cost

$15,800 net cost

Gross cost$24,000

Federal ITC (30%)-$7,200

State incentive-$1,000

After ITC$16,800

Effective $/W$1.98/W

Cost per kWh (25yr)$0.047/kWh

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How to Use This Calculator

Enter system size and cost per watt

The system size in kW is the total panel wattage divided by 1,000. An 8 kW system has 8,000W of panels. Cost per watt is the all-in installed price divided by total watts. The US average in 2026 is $2.50-$3.75/W including panels, inverter, mounting hardware, wiring, installation labor, permits, and interconnection fees. Get quotes from 3+ installers to find your actual cost per watt.

Apply the 30% federal ITC

The federal Investment Tax Credit is currently 30% through 2032. This is a dollar-for-dollar reduction in your federal income taxes owed — not a check in the mail. If your credit exceeds your tax liability, you can carry it forward to the next tax year. The ITC applies to all system costs including battery storage, installation labor, and permitting.

Add state and utility incentives

Many states offer additional incentives: California's SGIP battery rebate, New York's 25% state tax credit, Massachusetts SMART program, and hundreds of utility rebates. Visit the DSIRE database (dsireusa.org) to find incentives in your state. Enter the total dollar amount of additional incentives.

Battery add-on

Battery storage costs approximately $8,000-$15,000 installed per battery (Tesla Powerwall, Enphase IQ, LG RESU). The ITC now covers battery storage costs when installed with solar. If you're considering battery later, the ITC only applies when installed simultaneously with the solar system or within the same tax year.

The Formula

Gross Cost = (System kW × 1,000 × Cost per Watt) + Battery Cost Federal ITC = Gross Cost × ITC Percentage (30%) After ITC = Gross Cost - Federal ITC Net Cost = After ITC - State Incentives Effective $/W = Net Cost ÷ (System kW × 1,000) 25-yr Cost per kWh = Net Cost ÷ (Total kWh produced over 25 years)

The 25-year cost per kWh shows the true long-term economics of solar versus buying electricity from the grid. A system producing electricity at $0.04-0.07/kWh over 25 years compares very favorably to current grid rates of $0.12-0.25/kWh — and grid rates tend to rise 2-4% per year.

Example

The Hendersons — Denver, CO — 8 kW system

The Hendersons got three quotes averaging $3.00/W for an 8 kW system. Colorado has no state tax credit, but their utility Xcel Energy offers a $500 rebate.

System size8 kW

Cost per watt$3.00/W

Gross cost$24,000

Federal ITC (30%)-$7,200

Utility rebate-$500

Net cost$16,300

At $16,300 net and Denver's 5.0 peak sun hours, their 8 kW system produces about 12,500 kWh/year. At $0.13/kWh, that's $1,625/year in savings — a 10-year payback. After payback, the system generates 15+ more years of essentially free electricity.

FAQ

How much does a solar system cost in 2026? ▼

The national average installed cost is $2.50-$3.75 per watt before incentives. For a typical 8 kW residential system: $20,000-$30,000 gross, $14,000-$21,000 after the 30% federal ITC. High-cost states (California, New York, Massachusetts) tend to have higher installation costs but also more incentive programs. The cheapest quotes often come from larger regional installers vs. national companies, which add significant overhead.

What's included in the cost per watt quote? ▼

A complete solar quote should include: solar panels (40-55% of cost), inverter (10-15%), mounting hardware (5-10%), wiring and electrical equipment (5-10%), installation labor (15-25%), permitting and interconnection (5-10%). Be wary of quotes that seem to exclude any of these — especially permitting and interconnection, which can add $1,000-2,000.

Is the 30% federal solar tax credit still available? ▼

Yes. The Residential Clean Energy Credit remains at 30% through 2032, stepping down to 26% in 2033 and 22% in 2034. It applies to the full installed cost including panels, inverter, batteries, labor, and permits. You must have tax liability to use it — it's not refundable, but unused credits carry forward to future tax years. Use our Solar Tax Credit Calculator for a detailed breakdown.

Should I finance solar or pay cash? ▼

Cash or HELOC is typically best for ROI — no interest cost. Solar loans (6-8% APR) still make sense if the monthly savings exceed the loan payment, which is common with 10-15 year loans. Leases and PPAs require no upfront cost but you don't own the system, can't claim the ITC, and have less flexibility if you sell your home. If you can access a home equity loan at 5-6% or less, that's often the optimal financing path.

Does solar increase home value? ▼

Studies consistently show solar adds value — the Lawrence Berkeley National Laboratory found an average premium of $4-$5 per watt of installed capacity. An 8 kW system could add $32,000-$40,000 to home value. However, this varies significantly by market: California and Northeast markets show stronger premiums; rural and low-electricity-rate markets show smaller gains. Leased systems typically add no value and can complicate home sales.