US Solar Installation Costs in 2026: Benchmarks, Storage Adders and State Cost Drivers

Executive Summary

What changed

The U.S. Department of Energy updated its solar cost benchmark page on September 2, 2026. The latest benchmark vintage covers Q1 2025 transactions, expressed in 2024 dollars and excluding subsidies paid to system owners. The page gives separate figures for utility-scale, commercial and residential systems, each with and without energy storage.

What this article adds

The DOE benchmarks are national. To estimate state differences, NextMSC scaled the DOE residential PV-only price of $2.95/Wdc by a Macro Cost Pressure Index built from state price levels, residential electricity prices and labor-market tightness for all 50 states and the District of Columbia. The state figures are modeled estimates. They are not observed installed prices, and no state-level installed price series was available to test them against.

Why it matters

Solar pricing is often quoted as a single national number. The DOE data shows that the figure depends heavily on segment, on whether storage is included, and on how much of the market price reflects temporary distortions. The state model shows that cost pressure also varies by location: a buyer or lender using the national figure would understate cost by about $1.16/Wdc in the highest-pressure state and overstate it by about $0.34/Wdc in the lowest.

DOE Cost Benchmarks by Segment

DOE reports two prices for each benchmark. The minimum sustainable price is what a company must charge to stay solvent in a balanced market. The modeled market price is today's actual market price, which can differ because of temporary distortions such as tariffs and subsidies.

Scale and storage

Residential PV-only carries a modeled market price of $2.95/Wdc, against $1.98 for commercial and $1.12 for utility-scale. Adding storage lifts the residential figure to $4.59/Wdc. On DOE's 8 kWdc residential system, NextMSC arithmetic puts the modeled market price at about $23,600 without storage and $36,720 with a 13.5 kWh battery, before any tax credit or incentive.

Where tariffs show up

DOE treats tariffs on imported hardware as temporary distortions that raise the modeled market price but not the minimum sustainable price. The residential benchmark includes aluminum rails and clamps imported from China and subject to a 25% tariff, plus cells subject to antidumping and countervailing duties. That is consistent with the wider gap in residential (6.1% PV-only, 6.0% with storage) than in commercial (1.5% and 0.7%). The benchmark cannot show what has happened to tariffs since Q1 2025.

Original Cost Stack Comparison

NextMSC combined DOE Tables 1 and 2 to isolate the storage adder and the market-price premium in each segment.

$/Wdc, 2024 U.S. dollars, 2025Q1. MSP = minimum sustainable price; MMP = modeled market price. Storage adder, share and premium are NextMSC calculations. Source: U.S. Department of Energy. *DOE lists 250 kWh in Table 1 but 500 kWh in the commercial system description.

Storage accounts for a similar share of modeled price in all three segments (33.6–38.1%), so the case for storage rests on local economics rather than on relative system cost. The commercial figures should be read with care because of the DOE discrepancy on battery size noted under the table; the per-watt values are as published.

Storage adder by segment

The stacked view below separates the PV-only price from the storage adder. The adder falls from $1.64/Wdc in residential to $1.00 in commercial and $0.69 in utility-scale, but its share of the total price moves much less because the PV-only base falls in step.

The largest adder per watt sits in residential, where DOE models an 8 kWdc array with a 13.5 kWh battery. The utility-scale adder is the smallest per watt but the largest as a share of the total (38.1%).

System-Level Dollars from DOE Benchmarks

Per-watt prices are easier to compare when scaled to the DOE benchmark systems. The table below multiplies each DOE price by the benchmark system size. These totals are NextMSC arithmetic on DOE inputs. They are not DOE-published totals, they exclude incentives, and they are in 2024 dollars.

System size x DOE $/Wdc, 2025Q1, 2024 dollars. Source: U.S. Department of Energy and NextMSC analysis.

The residential gap between modeled market price and minimum sustainable price is $2,080 on a storage system and $1,360 on a PV-only system. That is the dollar value of the distortions DOE identifies, and it is the amount that would change if tariffs or other conditions shift.

State Cost Model: Modeled Residential Cost by State

NextMSC's state model starts from the DOE residential PV-only modeled market price of $2.95/Wdc and adjusts it for three local cost drivers. The U.S. control row reproduces the DOE benchmark and the BLS national median installer wage exactly, so every state is expressed relative to the same anchor.

Sources: EIA, BLS, BEA, U.S. Census Bureau and NextMSC analysis. Index = (0.6 x price-level factor + 0.1 x electricity factor + 0.3 x labor factor) x 100. Modeled cost = $2.95 x index / 100. Installer wage proxy = $53,140 x RPP / 100.

Results

The index runs from 88.4 (Kentucky) to 139.2 (Hawaii), with the U.S. control at 100.0. The three highest-pressure jurisdictions are Hawaii (139.2), New Hampshire (121.3) and Vermont (117.3). The three lowest are Kentucky (88.4), Oklahoma (88.5) and New Mexico (89.1).

What drives the high end

Measured against the U.S. control (which contributes 60, 10 and 30 points from the three components), the index points to different mechanisms. In Hawaii, price level adds 6.0 points, residential electricity 18.2 and labor tightness 15.0; the 52.00 cents/kWh residential price is 2.82 times the U.S. control, and the labor factor is at its 1.50 cap. In New Hampshire the additions are 2.5, 4.8 and 13.9, so the score of 121.3 is mostly a labor-market effect from 2.8% unemployment. Maine, Rhode Island and Massachusetts score 107.7 to 112.2, with residential electricity adding 5.5 to 6.0 points over the control.

What drives the low end

Kentucky and Oklahoma both land at $2.61/Wdc. Both pair a below-average price level (RPP 90.2 and 87.8) with a labor factor below 1.0, meaning unemployment above the U.S. rate of 4.1%. In the model, a looser labor market lowers the cost estimate. The inputs also show the installer wage proxy ranging from $46,179 in Arkansas to $58,826 in California. That proxy is the BLS national median scaled by price level, not an observed state wage.

Dataset Explorer

Filter the underlying state inputs, factors and modeled cost data compiled for this analysis.

Sources: EIA (residential and commercial prices, May 2026), BLS (state unemployment, Aug 2026), BEA (regional price parities, 2024), U.S. Census Bureau (median household income, 2024) and NextMSC analysis. Factor, index, modeled cost and wage proxy columns are NextMSC calculations. Income factor and commercial price are context only.

Installer Labor Costs

BLS reports a May 2025 median wage of $53,140 ($25.55 per hour) for solar photovoltaic installers, on 31,100 jobs. The 10th and 90th percentiles are $41,600 and $79,970, a spread of 1.9× (NextMSC calculation). Electricians, who sometimes make the grid connection, earn a median of $63,190, or 19% more than installers. BLS projects 11,300 additional installer jobs by 2035 (37% growth) and about 4,200 openings a year.

Electrical contractors employ 39% of installers and pay them a median of $58,570. Temporary help services employ 17% at a median of $47,100. State-level installer wages for May 2025 could not be verified and are excluded.

Installer pay sits 4.2% above the all-occupation median of $50,980 and 8.6% below the construction and extraction group median of $58,150 (NextMSC calculations on BLS figures). The 90th-percentile installer earns more than the median electrician, so experience appears to carry a wage premium inside the occupation.

Stakeholder Exposure Matrix

The table links each verified or modeled data point to the stakeholder it most directly affects. The exposure reading is NextMSC interpretation of the evidence, not a forecast.

Sources: DOE, BLS, EIA, BEA and NextMSC analysis; see the Verified Data Register.

Verified Data Register

Every national figure used in this article, with its source and period. State-level inputs are in the Dataset Explorer.

Sources: DOE, EIA, BLS, BEA, U.S. Census Bureau.

Implications for Industry Stakeholders

Who is affected

Residential buyers and installers face the highest per-watt cost and the largest tariff-related premium in DOE's data, and they are the segment the state model covers. Commercial developers see the smallest gap between market and sustainable price. Utility-scale developers carry the lowest per-watt cost but the largest relative storage adder (38.1%).

What to monitor

Methodology and Data Notes

This article separates agency data from NextMSC arithmetic and modeling. National figures come from the cited agency releases. Derived values (storage adder, share, premium, ratios, system-level dollars, factors, the Macro Cost Pressure Index, modeled cost and the wage proxy) are NextMSC calculations. Data cut-off: September 30, 2026. Planned refresh: quarterly.

Limits of the state model

Modeled state costs are estimates scaled from a national benchmark. They are not observed installed prices and have not been validated against state installation records. Unemployment is a proxy for labor tightness and does not measure installer availability. The installer wage proxy scales the BLS national median by price level and is not an observed state wage. The index weights (60/10/30) are a NextMSC modeling choice, and results will change if they change. Residential benchmarks apply to PV-only systems; the model has not been extended to storage. DOE lists 250 kWh for the commercial storage system in Table 1 and 500 kWh in the system description; per-watt values are used as published.

Frequently Asked Questions

Which state has the highest solar installation cost?

Observed installed prices by state are not published in the sources used here. On NextMSC's modeled estimate, Hawaii is highest at $4.11/Wdc for residential PV-only, followed by New Hampshire ($3.58) and Vermont ($3.46).

Why does residential solar cost more per watt than utility-scale?

DOE benchmarks put residential PV-only at $2.95/Wdc against $1.12/Wdc for utility-scale, a ratio of 2.6. DOE models an 8 kWdc system for homes and a 100 MWdc system for utilities, so the difference reflects system scale as well as the tariff exposure described above.

How much does storage add?

On DOE modeled market prices, storage adds $1.64/Wdc in residential, $1.00 in commercial and $0.69 in utility-scale, between 33.6% and 38.1% of the PV+ESS price.

How current are the numbers?

The DOE benchmarks reflect Q1 2025 transactions, though the page was updated on September 2, 2026. State inputs are EIA electricity prices for May 2026, BLS unemployment for August 2026, BEA price parities for 2024 and Census income for 2024. BLS wages are for May 2025.

Outlook: What the Evidence Supports

The evidence supports three conclusions. Solar cost is set first by system scale, with residential paying about 2.6 times the utility-scale price per watt. Storage is a stable one-third of modeled system price, so its economics depend on local power prices. Residential prices carry the largest tariff-related premium, and on NextMSC's model the state spread in residential PV-only cost is $2.61 to $4.11 per watt. Replacing the modeled state values with observed installed prices is the main upgrade planned for the next refresh.