2026 update: The federal residential solar tax credit (Section 25D) expired December 31, 2025. Prices on this page reflect 2026 costs without the ITC. Commercial solar (Section 48E) still has a 30% credit →
Quick Answer
Solar panel costs vary significantly by state — from roughly $12,000–$18,000 in the Southeast to $20,000–$35,000 in the Northeast and Hawaii. The variation is driven by labor markets, permitting complexity, and installer competition, not panel prices (panels are commodities priced globally). High utility rates in states like California, New Jersey, and Rhode Island mean that more expensive systems still deliver competitive payback periods.
| State | Avg. Installed Cost | Avg. Utility Rate | Est. Payback (no ITC) |
|---|---|---|---|
| California | $17,500 | $27,500 | $0.20–$0.40/kWh | 10–16 yrs |
| New Jersey | $16,500 | $24,000 | $0.17–$0.20/kWh | 9–13 yrs |
| Rhode Island | $16,000 | $23,500 | $0.19–$0.22/kWh | 9–13 yrs |
| Massachusetts | $16,500 | $25,000 | $0.22–$0.28/kWh | 9–13 yrs |
| New York | $17,000 | $26,000 | $0.18–$0.25/kWh | 10–14 yrs |
| Colorado | $15,500 | $23,000 | $0.13–$0.16/kWh | 12–16 yrs |
| North Carolina | $14,800 | $21,500 | $0.12–$0.14/kWh | 12–16 yrs |
| Georgia | $15,200 | $22,500 | $0.12–$0.14/kWh | 11–15 yrs |
| Florida | $14,200 | $21,000 | $0.12–$0.14/kWh | 10–14 yrs |
| Texas | $13,500 | $20,000 | $0.12–$0.15/kWh | 11–15 yrs |
The federal residential solar tax credit (Section 25D) expired on December 31, 2025. This affects the cost comparison across states uniformly — no state has access to the federal credit for new 2026 installations. What differs by state is the availability of state-level incentives: net metering policies, SREC programs (New Jersey, Massachusetts, Maryland), property tax exemptions (most states), sales tax exemptions (Florida, New Jersey, others), and utility rebate programs. These state incentives are now the primary financial differentiator between markets.
Labor market
States with higher prevailing wages and stronger union presence (California, New York, Massachusetts) have higher installation labor costs. Southern states generally have lower labor costs.
Permitting complexity
Some municipalities have streamlined solar permitting (SolarAPP+); others require lengthy review processes. California has made significant progress on permit streamlining, but individual cities still vary.
Installer competition
States with many installers (California, Florida, New Jersey) tend to have more competitive pricing. Less-developed markets have fewer options and higher prices.
Utility rate (determines payback)
High utility rates make solar more valuable even if installation costs are higher. Rhode Island and Massachusetts have among the highest rates in the country, making their solar economics strong despite higher installed costs.
Net metering policy
States with full retail-rate net metering (most states) offer better economics than states with below-retail crediting (California's NEM 3.0, JEA in Florida). Net metering policy directly affects how quickly your system pays back.
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The Southeast generally has the lowest installed costs: Florida, Georgia, Texas, and North Carolina average $13,500–$22,500 for an 8 kW system. Lower labor costs, simpler permitting, and strong installer competition keep prices down. However, lower utility rates in these states mean payback periods are similar to or longer than high-cost, high-rate Northeast states.