Median residential solar quoted prices fell to their lowest rate in the first half of 2025, tying the record low of $2.48 per watt that was set in the second half of 2024, said marketplace operator EnergySage.
The median quoted price is the lowest since EnergySage began reporting in 2014. For a median residential system size of 11.7 kW, the quoted price represents $29,016 before incentives.
Average system costs vary widely by region. An average system in Massachusetts costs $12,300 more than in Arizona. The report noted a general correlation between lower utility electricity prices and lower residential solar system prices.
A staggering 92% of contractors EnergySage surveyed said the loss of the 30% investment tax credit will harm their business. The 25D residential solar tax credit, credited to individuals who invest in solar is set to expire at the end of 2025, while the 48E investment tax credit, made available to installers and typically used by lease and PPA providers, will be available for projects that begin construction through July 4, 2026.
With tax credits set to expire, the industry is exploring ways to cut costs in order to remain competitive and provide savings against utility bills.
“The solar industry has widely cited $2.00 per watt as an attainable target price that would maintain solar’s financial attractiveness for most American homeowners after the tax credit ends,” said the EnergySage report.
(Read: “How to cut U.S. residential solar costs in half”)
The report said based on contractor surveys, hard costs, including equipment and labor, represent the largest contractor expense at 55% of total system costs, while soft costs, including sales, marketing, permitting and interconnection, and other overhead expenses encompass 28%. It said net profit margins vary significantly among contractors, but on average make up 17% of the cost of an installed system.
Customer acquisition was a large portion of soft costs reported by installers. EnergySage said 47% spend less than $1,000 per closed sale, 33% spend $1,001-$2,000, and 20% report customer acquisition costs above $2,000 per sale.
The marketplace operator surveyed installers and contractors in residential solar to get a temperature check on an industry currently undergoing an extended downturn. About 70% of surveyed respondents said that solar equipment tariffs will “harm or dramatically harm’ their business.
Over one third of respondents, or 36%, reported reduced profitability due to higher interest rates, while 27% sought new financing options to help customers due to persistently high rates. Immigration policy concerns also emerged as a potential challenge, with 45% of respondents saying they expect Trump administration policies to impact the solar workforce.
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I am really disappointed and dismayed at the current cost charge for an American system… Americans don’t understand they all are being ripped off, and all you have to do is look at the cost of systems bought in the UK or any other country in the World!!!
Too bad the author of this article didn’t look at other countries, at least he did mention a $2 a watt system cost… Significantly lower than what is being charged to Americans now….. half the current solar installers in America will go bankrupt by the end of next year….
That’s the rub. Companies spike prices to eat up those incentives.
In IL we sell our srecs and have the fed tax credit. I just got 2 $45k bids for 9kw.
Im looking $15k After all the incentives. The incentives are about to disappear. So double that.
4 years ago they quoted almost $70k
Solar is a sham!!! I have a friend who lives in Utah and doesn’t need solar because his average bill is under $200 a month whereas my solar monthly payment is just over $200 a month for 11.2 kw system for a zero savings in comparison. BTW, I live in Southern California’s high desert.
My average monthly bill prior to going solar used to be under 200 a month until SCE started increasing summer rates to an unsustainable amount that reached almost $700 a month forcing us into going solar.
Now those very same municipalities who forced you into going solar are suing us to increase fictitious rates for being on their grid.
BTW, my 11.2 kw system costed us 42K, 57k once you include interest for 25 years! That’s more than $3.75 per watt before interest.