Why is Residential Solar So Expensive in the US ?

The costs of permitting and fees for rooftop solar are much higher in the US than in Europe or Australia due to

fragmented, varying local requirements that create inefficiencies and delays. The difference is dramatic: a technical report from Tesla’s think tank outlines why US rooftop installation costs are three times higher than costs in Germany.

Several studies report that inflated costs in the US are primarily due to the ”soft costs” in rooftop solar, which account for around 60 percent of total installation costs. The National Renewable Energy Laboratory (NREL) identifies numerous categories of soft costs, including permitting, inspection and utility interconnection, installation labor, sales tax, overhead, net profit margins, and marketing.

The US residential solar industry has entered a new era as federal tax credits for rooftop solar will expire on December 31, 2025. With the federal Investment phasing out at the end of 2025, most industry analysts anticipate a short-term decline, but it is far from a death knell for the industry. After all, while incentives may fade, energy demand is projected to rise sharply over the next few years and decades. McKinsey Consulting projects that total US electricity demand will rise by nearly 25 percent by 2030. That growth cannot be met without expanding solar energy generation through smaller, localized systems.

What is “Balcony” Plug-in, Portable Solar?

Balcony solar is a simple, do-it- yourself, “plug-and-play” solar panel and device that can be installed easily without an electrician. Plug-in is a more accurate term than balcony for these portable systems because they can be installed on a deck, a carport, an RV, or almost any stable surface.

In a plug-in system, the solar panel is connected to a device that converts solar power to electricity and is plugged into a standard 120V outlet. The system can provide up to 800 watts, enough to run a small fridge or a laptop. A plug-in system is affordable because it avoids almost all the costs associated with rooftop solar installation. Renters can purchase, install, and take the portable panels and system along if they move.

In March 2025, Utah became the first state to pass legislation allowing plug- in solar systems. Utah’s Solar Power Amendment passed with overwhelm- ing bipartisan support, allowing Utah residents to connect their systems directly to 120V outlets without permits, inspections, interconnection applications, or utility fees. Utah requires that plug-in systems meet nationally recognized electrical code standards and safety certification standards.

At least six states are following Utah’s lead with new regulations allowing plug-in solar. Legislators in Maine, New Hampshire, New York, Pennsylvania, South Carolina, and Vermont will review bills allowing plug-in solar during their respective legislative sessions.

At the time of this writing, it has not been established whether Washington State legislators might pursue legislation allowing plug-in solar during the 2026 short session, but it is clear that state legislation will be necessary. Construction and solar permitting websites for numerous counties and cities explicitly state that “balcony solar is illegal in Washington State,” referring the reader to state building codes.