How Much Do Solar Panels Cost? (Jan 2026)
Solar panels generate “free” electricity, but installing a system still costs money. A typical American household needs a 10-kilowatt (kW) system to adequately power their home,
Remember that a kWh is a measurement of power over time. So the solar energy cost per kWh refers to how much your solar panel system would cost based on how much power it produces over time. But the cost per kWh does not have a universal equation, and the final number can be influenced by using different calculations.
The average cost to produce solar energy ranges from $0.06 to $0.10 per kWh over the lifetime of the system, depending on your location and system efficiency. This rate remains consistent, unlike utility power rates that can increase annually.
Another measure of the relative cost of solar energy is its price per kilowatt-hour (kWh). Whereas the price per watt considers the solar system's size, the price per kWh shows the price of the solar system per unit of energy it produces over a given period of time. Net cost of the system / lifetime output = cost per kilowatt hour
On average, residential utility electricity rates in the U.S. range from $0.13 to $0.25 per kWh, with some states experiencing much higher rates due to taxes, infrastructure costs, and fuel charges. These rates can also be unpredictable.
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