diff --git a/README.md b/README.md
index e69c8ef..269219c 100644
--- a/README.md
+++ b/README.md
@@ -42,6 +42,10 @@ Or via the command line:
 python -m solcx.install v0.4.25
 ```
 
+By default, `solc` versions are installed at `~/.solcx/`. If you wish to use a different directory you can specify it with the `SOLCX_BINARY_PATH` environment variable.
+
+## Setting the `solc` Version
+
 Py-solc-x defaults to the most recent installed version set as the active one. To check or modify the active version:
 
 ```python
diff --git a/solcx/install.py b/solcx/install.py
index 19c3d5a..582594c 100644
--- a/solcx/install.py
+++ b/solcx/install.py
@@ -154,7 +154,7 @@ def set_solc_version_pragma(pragma_string, silent=False, check_new=False):
             LOGGER.info("Newer compatible solc version exists: {}".format(latest))
 
 
-def install_solc_pragma(pragma_string, install=True, show_progress=False):
+def install_solc_pragma(pragma_string, install=True, show_progress=False, solcx_binary_path=None):
     version = _select_pragma_version(
         pragma_string,
         [Version(i[1:]) for i in get_available_solc_versions()]
@@ -162,7 +162,7 @@ def install_solc_pragma(pragma_string, install=True, show_progress=False):
     if not version:
         raise ValueError("Compatible solc version does not exist")
     if install:
-        install_solc(version, show_progress=show_progress)
+        install_solc(version, show_progress=show_progress, solcx_binary_path=solcx_binary_path)
     return version
 
 
diff --git a/tests/test_install.py b/tests/test_install.py
index dbb6d14..64e3121 100644
--- a/tests/test_install.py
+++ b/tests/test_install.py
@@ -48,3 +48,30 @@ def test_install_osx():
 
 def test_progress_bar(nosolc):
     solcx.install_solc('0.6.0', show_progress=True)
+
+
+def test_environment_var_path(monkeypatch, tmp_path):
+    install_folder = solcx.get_solc_folder()
+    monkeypatch.setenv('SOLCX_BINARY_PATH', tmp_path.as_posix())
+    assert solcx.get_solc_folder() != install_folder
+
+    monkeypatch.undo()
+    assert solcx.get_solc_folder() == install_folder
+
+
+def test_environment_var_versions(monkeypatch, tmp_path):
+    versions = solcx.get_installed_solc_versions()
+    monkeypatch.setenv('SOLCX_BINARY_PATH', tmp_path.as_posix())
+    assert solcx.get_installed_solc_versions() != versions
+
+    monkeypatch.undo()
+    assert solcx.get_installed_solc_versions() == versions
+
+
+def test_environment_var_install(monkeypatch, tmp_path):
+    assert not tmp_path.joinpath('solc-v0.6.0').exists()
+
+    monkeypatch.setenv('SOLCX_BINARY_PATH', tmp_path.as_posix())
+
+    solcx.install_solc('0.6.0')
+    assert tmp_path.joinpath('solc-v0.6.0').exists()