How Much Should I Budget for a Solar Power Installation?

At Switch to Solar, we provide craftsman-quality solar installation at a price our competitors can’t beat. As you’ll see below, our typical typical solar power installation in Maryland, DC and Virginia costs approximately a $1,000 per kilowatt less than other solar panel installers (between $2,750 per kilowatt (kW) and $3,454/kW).

The Cost of Installing Solar Power is Dropping

The cost of installing solar electric systems has dropped sharply in recent years, mostly due to reductions in global solar panel prices. Reported system prices for residential and commercial solar energy systems declined 6-7% per year, on average, from 1998-2013, and from 12-15% over 2012, depending on system size. The median installed system prices per kilowatt in 2013 for Maryland and DC were:

  • $3.71 for DC ($3,710 per kilowatt)
  • $4.66 for Maryland ($4,660 per kilowatt)

The median reported price differs by about $2/W between the lowest and highest priced states. This price differential reflects a wide array of factors including:

  • market size and maturity
  • incentive levels
  • sales taxes
  • administrative costs
  • labor costs
  • project characteristics

According to the US Department of Energy’s SunShot Photovoltaic System Pricing Trends for 2014, the pricing for a solar energy installation was:

  • Residential and small commercial (<= 10 KW) was $4,690 per kilowatt (median)
  • Large commercial (>100MW) was $3,890 per kilowatt (median)
  • Utility scale(>= 5 MW, ground-mounted) was $3,o00 per kilowatt (capacity weighted average)

How Will Solar Installation Prices Change in the Future?

As can be seen in the two graphs below (from the SunShot report), solar energy system installation prices have been falling for several years, with solar panel prices beginning to stabilize in the last two years.




Solar installation prices are expected to continue to fall over the long run, although at not as fast a rate as in the past. It is worth noting that current analyst projections are far lower than projections made in the past. Indeed, 2020 projections are approximately half of what the same analysts predicted 5-10 years ago.


Analysts expect significant solar power installation cost reductions by 2020. This is due to several factors including:

  • improved supply chain and regulatory costs
  • advanced installation methods
  • increased competition among installers

We also expect that solar power manufacturers will continue to look for ways to increase the efficiency and reduce the cost of their products. This will ensure that the solar power industry can compete with alternative energy choices, as consumers become more concerned with rising energy costs and the environment.

The following shows 2020 projected solar energy system price estimates:

  • $2.29/WP DC – 5 kWP DC residential rooftop
  • $1.99/WP DC – 217 kWP DC commercial rooftop

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