U.S. median residential solar price is $2.80 per watt, payback period 8 years

April 15, 2024

EnergySage maintains a leading marketplace for residential solar and energy storage, providing personalized quotes and connecting prospective customers with local installers. The company released its 18th annual Solar & Storage Marketplace Report, noting declining costs for both solar and energy storage.

For the first time since 2021, quoted solar prices decreased on the marketplace, falling 3.5% to $2.80 per watt for quotes in the second half of 2023. The median system size over that period was 11.3 kW, leading to an average quoted system price of $31,640 (before any associated tax credits or incentives). These prices are the lowest since mid-2020.

Energy storage meanwhile decreased for the first time since EnergySage started reporting storage data in 2020. During the second half of 2023 energy storage prices declined about 6% to a median $1,265 per watt.

EnergySage said the drop in prices was driven in part by a 19% decrease in quoted storage prices in California, where energy storage attachment rates for solar projects reached 45% in the second half of 2023.

For energy storage providers, Enphase represented nearly half of the energy storage quotes provided, while Tesla was the second most-quoted, and FranklinWH reached third, continuing its climb in market share.

For inverters, microinverter provider Enphase Energy gained market share, reaching nearly 70% of quoted systems of EnergySage marketplace. It was followed by SolarEdge, Hoymiles, and Tesla.

The top quote solar panel brands were a more diverse mix led by REC Group, Qcells, Silfab Solar, Panasonic, and others. During 2023, 90% of quotes on EnergySage had solar panels with power ratings of 400 W or greater, up from only 2% of quotes in 2020.

Among the largest residential solar markets, many saw declines in per watt quoted prices. California median prices dropped sharply by 20% from the first half to the second half of 2023, reaching $2.70 per watt. This drop was driven by installers trying to improve the economics of residential solar for customers under the new Net Metering 3.0 rate structure. Meanwhile, Florida and Texas median prices were $2.35 per watt, while Colorado median prices were $3.10 per watt and Nevada $2.55 per watt.

The lowest quoted median per watt price was in Arizona, with $2.30 per watt, while Tennessee median prices were the highest at $3.65 per watt. California had the smallest median system size at 8.07 kW, while Kentucky had the largest with 14.50 kW for the median in the second half of 2023.

Nationwide, median loan rates for residential solar projects rose from 4.99% in the first half of 2023 to 5.5% in 2023. High interest rates have posed a challenge for residential solar installers, who were accustomed to a median loan rate of 2.99% in the second half of 2022.

Median estimated payback period, or the time it takes to achieve breakeven on investment, remained relatively flat throughout 2023. It improved from about 8.3 years in the first half of 2023 to about 8.1 years in the second half.

EnergySage also noted that solar is reaching a broader set of markets. Residential solar historically thrived in markets with high average electricity rates, but this year only three of the top 10 states for solar installations had electricity rates higher than the national average. The company said this marks a good sign for the solar industry in general, suggesting solar is evolving from early adopter markets to the mainstream.