How Much Does a 5kW Solar System Cost?

5kW solar system

Residential solar was at an average cost of $2.95 per Watt in the United States in 2023. So, by simple rules of math, a 5kW system will cost almost $15,000 before federal solar tax credits and other state-issued discounts and incentives.


You may think that’s the minimum amount you need to save to go solar, but you’d be mistaken.


If only calculating the cost of going solar was that simple!


There are many different factors to consider. Before investing in solar, you should be aware of where and how you will spend most of your money.


This guide outlines all the elements that contribute to the cost of solar and what you can do to maximize the ROI of your 5kW solar arrangement.

What Affects the Cost of Going Solar?

A multitude of factors come into play when you’re calculating the cost of going solar. Here are the most important ones:

Solar Manufacturer

Not all solar panels are manufactured in the United States. Some companies manufacture solar panels overseas and import them to the US market. Others have facilities within the country and sell their products via dealerships or directly to customers.


The price of the solar panels depends on the manufacturer because of the variations in costs they bear: import duties, raw materials like polysilicon, labor charges, etc. 


Some solar panels are significantly more expensive than others. For example, manufacturers like SunPower charge around $4.50 per watt, while others like Tesla go for much less at only $2.44 per watt.

Type of Solar Panels

The price of solar panels also depends on their capacity and wattage. The higher the wattage, the higher the price. This is because you can install fewer panels to produce enough power for your home. If you have space constraints, high-performing solar panels are the best choice, even if they are a little more expensive.


Apart from wattage, the technology used by the panels determines its cost. A highly efficient monocrystalline solar panel with the latest technology, like Passivated Emitter and Rear Cell (PERC), is more expensive compared to low-efficiency thin-film or polycrystalline options.

Place of Purchase

As mentioned earlier, solar manufacturers may directly sell to customers or do so via partnerships with verified local dealers. Buying from dealers may cost marginally less than placing a direct order on the solar manufacturer’s website. But you can rest assured that you will get all the help you need to install the solar panel (even if additional costs are applicable).


You can avail of EMIs and solar loans if you can’t make a hefty one-time payment.


You can also choose simple, DIY home solar kits from big-box stores like Walmart or Home Depot. This can keep costs low. However, you need sound knowledge of solar installation to ensure the system functions correctly.


Local solar cooperatives that invite bids from solar companies can also give you a fantastic, cost-effective deal on a 5kW solar system.


Considering the number of options to choose from, it’s essential to get quotes and compare costs before you purchase or sign up for anything.

Local Laws

Where you live also determines how much you pay for your 5kW solar array. In states like California, where residential solar adoption is very high and the industry is thriving, going solar is more affordable. A 5kW system costs roughly $11,300 after applying the federal tax credit.


Meanwhile, in a place like Wisconsin, you could spend $13,000 or more for the same solar setup. This is because states have local laws governing the price of solar. This includes discounts, net metering plans, and other incentives.


You can take advantage of the Energy Efficient Home Improvement Credit introduced by the federal government, irrespective of your state.

Soft Costs

When calculating your budget for a rooftop solar system, you should also consider costs beyond the solar panels and inverters. This includes roof inspection, repairs, labor, and other installation costs.


If your roof is not in the best shape, you will need repairs before you can install solar panels. Roof repairs can be expensive and cost $150 to $7,000, depending on the extent of damage.


The slope and angle of your roof can drive up installation costs as well. This is because steeper roofs are harder to work on, and the risk means higher labor charges.


The total cost also depends on whether you decide to do the installation yourself or hire professionals to do it for you. Experienced solar installers charge a considerable fee and get everything done quickly. But if you are confident in getting the work done by yourself, you can save a lot.


You may also have to obtain permission from your local government before installing solar panels on your roof. Solar permits don’t cost much, but even an additional $300 to $500 can make a big difference.


You need to be aware of these miscellaneous expenses when budgeting for your solar investment.

Is A 5kW Solar System Worth the Investment?

Switching your household to solar grants you energy independence and helps you save on your utility bills. Depending on your daily power consumption, you can partially or wholly offset the amount of energy you draw from your local utility provider.


A 5kW solar arrangement produces 5 kW of energy per hour under ideal conditions. If installed at a full tilt angle and receives a solar irradiance of 1kW per square meter, it will produce 30kWh of energy within six hours of sun exposure. That’s just about enough to meet the average daily consumption of American households.


If you pair your 5kW solar arrangement with a battery, you can store any excess power for later use.


So, you will make significant savings if your energy consumption is moderate or less than average.


However, a 5kW solar system might not be sufficient for a household with high energy consumption. Even then, you can partially offload your energy needs to solar and still reduce charges on your utility bills.

Why You Should Go Solar

The increasing scarcity of natural resources has made power outages more and more common these days. There is also the ongoing energy crisis. Recent data shows two-thirds of the nation will face major outages this year.


The US has also seen a rate increase in electricity prices many times, with the promise of more in the next few months and years.


Apart from these immediate concerns, the tremendous environmental impact of generating power using fossil fuels is also a significant concern. It needs to be addressed as soon as possible.


Due to increased awareness and popularity, solar adoption is growing every day. So, the overall cost of going solar is also on the decline.


Keeping these facts in mind, you should switch to solar if you have been contemplating it. After all, it’s a significant home upgrade. The good thing about solar is that you can break even on your initial investment in 15 years or so. And if you happen to live in a particularly sunny state, you can get there even faster.


Go solar today to futureproof your home and increase your savings. Contact your local solar consultant to get started.

Authored by Ryan Douglas

Authored by Ryan Douglas

NRG Clean Power's resident writer and solar enthusiast, Ryan Douglas covers all things related to the clean energy industry.