Residential rooftop solar prices in the U.S. fell for the third consecutive half-year to $2.5/W in the second half (2H) of 2024 due to softening demand, high interest rates, and stable electricity prices, according to EnergySage’s Solar and Storage Marketplace Report.

The average maximum rooftop solar prices reached as low as $2.89/W, and the average minimum dropped to the lowest in the decade to $2.41/W.

Prices for rooftop solar with storage fell to $2.40/W in 2H 2024 from $2.59/W in 1H 2024. The prices dropped due to a surge in demand for Tesla’s Powerwall 3, which includes an integrated inverter.

In the second half of 2024, 68% of consumers did not select the lowest-priced rooftop solar system they received, reflecting that the price was not the leading decision-making factor for customers.

U.S. States and Solar Prices

Massachusetts, Illinois, New York, New Jersey, and Connecticut had median prices above the national median, while Nevada and Arizona had prices below the national median.

States with median prices above the national median had high electricity rates and solar incentives. States with median prices below the national median had mediocre solar incentives.

However, in California, rooftop solar prices were competitive as electricity prices were below the national average.

In 2H 2024, Arizona’s rooftop solar prices fell to $1.99/W and Tennessee held the highest median solar prices at $3.35/W.

The gap between the highest and lowest-priced states increased from $1.20/W to $1.36/W between 1H and 2H 2024.

System Sizes

While the median prices decreased, the median system sizes increased by 6.5% in 2H.

The median rooftop solar system size ranged between 8.2 kW in Hawaii and 14.4 kW in West Virginia. The price per watt was higher for systems below 5 kW and lower for systems above 11 kW.

Larger Modules Preferred

In 2H 2024, low-output solar modules were phased out. Modules with a rated output below 400 W comprised 14% of the total modules used in the rooftop solar system. The trend is being seen due to solar modules’ increasing size and efficiency. Larger modules are cost-effective to manufacture and install.

In 2H 2024, REC panels overtook Qcells, comprising 46% of the modules used in rooftop solar systems, and Tesla comprised 75% of the inverters used in rooftop solar systems. Enphase’s market share fell to 53% in 2H 2024.

Pairing Solar Modules and Inverters

While pairing solar modules and inverters, REC modules were priced lower than Qcell modules when paired with the same inverters. The shift could be seen due to Qcell’s investment in U.S. manufacturing facilities, increasing production costs.

Overall, packages with Hyperion solar modules were the cheapest, and Jinko Solar was the most expensive.

Tesla’s Powerwall 3 battery, which includes an integrated inverter, offered the lowest prices when paired with solar modules. However, Tesla inverters were not popular in states with battery attachment rates below 40%.

Energy Storage and Battery

Energy storage prices fell by 12% in 2H 2024, dropping just below $1,000/kWh. Tesla was the most sought-after brand, and battery prices dropped in every state except Hawaii. In 2H, Enphase and Tesla garnered 92% of the market share, and Tesla captured 63% of the solar and storage quotes.

However, Tesla was not the cheapest battery brand at $926/kWh. Panasonic and EG4 batteries were priced lower.

Consumers’ interest in residential energy storage increased to 73% in 2H 2024. States without a robust solar buyback program, Hawaii, Tennessee, Alabama, Indiana, Georgia, and California, showed interest in energy storage.,

The battery attachment rates jumped to 45% in 2H 2024. The spike was seen largely in California. Other states also saw the battery attachment rates increase from 20% in 1H 2024 to 32% in 2H 2024, resulting from shifting net metering policies, grid instability, and lower battery prices.

Solar Financing

In 2H 2024, Climate First Bank, Credit Human, and Atmos Financial offered loans with fees at or below 3% of the total loan. Low-fee loans comprised 47% of the loans quoted. The average loan fee decreased slightly to 12% in 2H 2024.

According to the U.S. Energy Information Administration’s Preliminary Monthly Electric Generator Inventory report, solar energy and battery storage will comprise 81% of the projected capacity additions in 2025, with solar accounting for over 50% of the growth.

In January 2025, the U.S. Department of the Treasury and Internal Revenue Service released additional guidance on the Inflation Reduction Act’s domestic content bonus for clean electricity production and investment tax credits.