Solar panel prices have fallen roughly 90% over the past 15 years, driven by manufacturing scale, technology improvements, and global competition. Panel hardware now represents only about 15-20% of total installed system cost, with labor, permitting, and soft costs making up the rest.
Solar Cost Decline Timeline
| Period | Approx. Cost per Watt | Key Driver |
|---|---|---|
| 2010 | $7-$9/watt | Limited manufacturing scale |
| 2015 | $3-$4/watt | Chinese manufacturing scale-up |
| 2020 | $2.75-$3.50/watt | Efficiency gains, competition |
| 2026 | $2.50-$3.50/watt | Mature market, tariff/supply chain effects |
Why Panel Prices Fell So Dramatically
Massive manufacturing scale-up (especially in China), improved silicon processing efficiency, and intense global competition drove hardware costs down by roughly 90% between 2010 and today.
Why Total System Costs Haven’t Fallen as Fast
While panel hardware costs plummeted, labor, permitting, inverters, racking, and other “soft costs” haven’t declined nearly as much — these now represent the majority of a typical installed system’s total price.
Tariffs and Supply Chain Effects
Trade tariffs on imported panels and supply chain disruptions have periodically pushed prices up in the US market, partially offsetting the long-term downward trend seen globally.
What This Means for Homeowners in 2026
With the residential 25D tax credit now expired, hardware price declines alone won’t offset the lost 30% credit — but panel costs are unlikely to drop dramatically further, making now a reasonable time to evaluate solar rather than waiting.
Get a current-market solar quote for your home: (855) 427-0058
Frequently Asked Questions
How much have solar panel prices fallen?
Roughly 90% over the past 15 years for panel hardware specifically.
Will solar panel prices keep falling?
Modest further declines are possible, but the era of dramatic price drops has largely ended.
Why hasn’t my solar quote dropped as much as panel prices?
Labor, permitting, and other soft costs make up most of total system cost and haven’t fallen as fast.
Do tariffs affect solar panel prices?
Yes — trade tariffs on imported panels have periodically pushed US prices up.
What percentage of solar cost is the panels themselves?
Roughly 15-20% — the rest is labor, permitting, inverters, and other components.
Is now a good time to buy solar given falling prices?
Yes for most homeowners — further hardware declines are likely to be modest.
How does the 25D tax credit expiration affect the falling-price trend?
It offsets some of the savings from lower hardware costs, since homeowners no longer get the 30% credit.
Summing Up
Solar hardware costs have fallen dramatically, though total system costs are driven by more than panels alone. For a current quote, call (855) 427-0058 or visit us.solarpanelsnetwork.com.
Updated