Quick answer: Stop asking whether solar is worth it in general — it’s worth it if your utility charges more than your solar costs to make. A typical system produces power at about 9.5¢/kWh over 25 years, and that number barely moves by state. What moves is what you’re replacing: at Hawaii’s 52¢/kWh a system pays back in 4.3 years; at the U.S. average 18.44¢ it’s 12.4 years; in cheap-power Idaho, 18.8. Run yours below.
Last verified: August 2, 2026. Electricity rates: EIA Electric Power Monthly (May 2026). Pricing: EnergySage Marketplace (June 30, 2026). No federal credit applied — Section 25D expired December 31, 2025.
Calculate your payback
Solar Payback Calculator
Live August 2026 data: state electricity rates (EIA) and marketplace pricing (EnergySage). Every field is editable.
Assumes 0.5%/year panel degradation and no electricity-price inflation — both conservative: rising rates shorten payback, and this ignores maintenance or an inverter replacement, which lengthen it. Production varies hugely by location (roughly 1,000–1,200 kWh per kW in the Pacific Northwest and Northeast, 1,300–1,450 in the Southeast, up to ~1,800 in the desert Southwest) — run your address through NREL PVWatts and put the real figure in. Rates: EIA Electric Power Monthly (May 2026). Pricing: EnergySage Marketplace, both retrieved August 2, 2026. Section 25D expired for installations completed after December 31, 2025, so no federal credit is applied. Estimates only, not a quote.
The reframe that makes this easy
Most “is solar worth it” articles bury you in variables. There’s a simpler way to think about it: solar is a power plant you buy up front, and it has a price per kilowatt-hour just like your utility does.
Work it out and the number is remarkably stable:
- A 12 kW system at $2.60/watt costs $31,200
- It produces about 15,600 kWh in year one (1,300 kWh per kW)
- Over 25 years, allowing 0.5%/year degradation, that’s about 366,600 kWh
- $31,200 ÷ 366,600 kWh ≈ 8.5¢/kWh — or about 9.5¢ once you account for the ~10% you export rather than use directly
That 9.5¢ figure is roughly the same in Maine as in Arizona, because both cost and output scale together. Your utility rate is the only thing that really varies — from 12.35¢ in Idaho to 52¢ in Hawaii, a 4× spread.
So the question isn’t “is solar worth it.” It’s “does my utility charge more than 9.5¢?” Almost everyone’s does. The real question is how much more, because that sets how fast you get your money back.
Payback by what you pay for power
| Your electricity rate | Example state | Year-1 savings | Payback | 25-year net |
|---|---|---|---|---|
| 12.35¢ | Idaho | $1,734 | 18.8 years | ~$9,500 |
| 15.17¢ | Florida | $2,130 | ~15 years | ~$18,900 |
| 18.44¢ | U.S. average | $2,589 | 12.4 years | ~$29,600 |
| 23.27¢ | New Jersey | $3,267 | ~10 years | ~$45,600 |
| 29.93¢ | New York | $4,202 | ~7.5 years | ~$67,600 |
| 33.25¢ | California | $4,668 | ~7 years | ~$78,500 |
| 52.00¢ | Hawaii | $7,301 | 4.3 years | ~$140,400 |
12 kW system at $2.60/W ($31,200), 1,300 kWh per kW/year, 90% of output offsetting retail power, 0.5%/year degradation, no rate inflation. Rates are EIA May 2026 residential averages.
The pattern is stark: the same system is a 4.3-year investment in Hawaii and an 18.8-year one in Idaho. Nothing about the panels differs. Only the thing they replace. The same math for every state is in solar payback period by state.
What the expired credit changed
Until December 31, 2025 the federal 25D credit knocked 30% off, which took the U.S.-average payback from 12.4 years to 8.6. That credit is gone for systems you buy yourself — see what happened to the solar tax credit for what survives and the lease/PPA route that still carries one. The 9.5¢ above assumes you pay cash; our 25-year comparison of cash, loan, lease and PPA shows how much each way of paying adds on top.
The honest framing: solar in 2026 is a 12.4-year payback at the national average rather than an 8.6-year one. For a 25-year asset that’s still a positive return — but it’s no longer the easy yes it was in 2025, and anyone telling you otherwise is selling.
Where “worth it” breaks down
Three situations where the economics genuinely don’t work, and it’s worth saying so plainly:
- Cheap electricity. Below roughly 13¢/kWh, payback runs past 18 years — most of the warranty. You’d be betting on rate rises rather than banking savings.
- You might move within about five years. You’d recoup only a fraction through bill savings and would be relying on resale value, which is real but not guaranteed to return the full system cost. A lease makes a sale harder still.
- A shaded, complex, or aging roof. Shading cuts production directly, and re-roofing later means paying to remove and reinstall the array. If the roof needs replacing within a decade, do that first.
Two more that are less about economics: if you have little or no tax liability the old credit never helped you much anyway (so 2026 changes less for you than you’d think), and if your utility has moved off full-retail net metering, check the export rate before sizing — it can quietly halve the value of everything above.
What moves the number most
In order of impact:
- Your electricity rate — the dominant factor, and it scales savings almost linearly. See our state-by-state rate table.
- Your sun hours — production ranges from roughly 1,000 kWh per kW in the Pacific Northwest to about 1,800 in the desert Southwest. Use NREL PVWatts for your address rather than any national average; it’s the single biggest correction you can make to the calculator above.
- The price you negotiate — competitive marketplace quotes average about $2.60/watt, while doorstep sales run nearer $3.50. On a 12 kW system that’s ~$11,000, worth two to three years of payback. The full cost breakdown covers this gap.
- Rate inflation — the calculator deliberately assumes none, which is conservative. Electricity rose about 6% nationally in the past year (17.37¢ to 18.44¢, EIA May 2025 → May 2026). Persistent rises pull payback in by years.
- The size you actually need — the 12 kW default above is the average system quoted, not the average system needed. On EIA usage data the average home’s consumption implies about 8 kW; how many solar panels do I need works out yours, and a smaller system costs proportionally less to pay back.
So, is it worth it?
Yes, clearly, if you’re in a high-rate state, have decent sun and an unshaded roof, plan to stay 10+ years, and your utility still offers reasonable export credit. At 25¢/kWh and up, buying power at 9.5¢ is simply a good trade.
Probably, at around the national average — a 12.4-year payback on a 25-year asset is a real return, just not a fast one. Get three quotes; the price spread matters as much as anything else here.
Probably not on economics alone, if your power is cheap, your roof is compromised, or you may move soon. That’s not a knock on solar — it’s what an honest calculation says, and you should be suspicious of anyone whose calculator never returns this answer.
Methodology & sources
Verified August 2, 2026:
- Electricity rates: EIA Electric Power Monthly, Table 5.6.A, residential, May 2026 state-level data retrieved August 2, 2026. U.S. average 18.44¢/kWh (May 2025: 17.37¢).
- System pricing: EnergySage Marketplace national averages, $2.60/W and a 12 kW average quoted system (updated June 30, 2026).
- Production: 1,300 kWh per kW per year as a national midpoint, derived transparently as peak sun-hours × 365 × 0.85 system derate (≈4.2 sun-hours). Real values run about 1,000 in the Pacific Northwest to 1,800 in the desert Southwest — the calculator leaves this editable because a national average is the weakest input in any solar estimate.
- Degradation: 0.5%/year linear, a standard warranty assumption, giving 23.5 full-output-equivalent years over 25.
- Payback is computed year by year with degradation applied, not as a flat cost ÷ year-one-savings shortcut. It excludes electricity-price inflation (which shortens payback) and excludes maintenance and any inverter replacement, typically $1,500–$3,000 somewhere around year 12–15 (which lengthens it).
- Federal credit: none applied. Section 25D expired for installations completed after December 31, 2025.
- Figures are planning estimates, not quotes, and this is not financial advice. Get three competing quotes and confirm your utility’s current net-metering terms before committing.
Rates and pricing change; this page is re-verified on a schedule and the “verified” date reflects the latest check.
Frequently asked questions
Is solar worth it in 2026 without the tax credit?
It depends almost entirely on your electricity rate. A typical 12 kW system produces power at about 9.5¢/kWh over 25 years. If your utility charges more than that — most do — you save money; the only question is how fast. Payback runs 4.3 years in Hawaii, 12.4 at the U.S. average, and 18.8 in a cheap-power state like Idaho.
How long does it take for solar panels to pay for themselves?
About 12.4 years at the U.S. average electricity rate of 18.44¢/kWh, for a 12 kW system at $2.60/watt with no federal credit. It was 8.6 years while the 30% credit existed. In high-rate states it can be under 5 years; where power is cheap it can exceed 18.
What is the actual cost per kWh of solar power?
About 9.5¢/kWh for a system at $2.60/watt producing 1,300 kWh per kW per year over 25 years, including 0.5%/year panel degradation. That number barely changes by state — what changes is the utility rate you're comparing it against.
Is solar worth it if I might move?
Less so. Payback now runs past a decade in most of the country, so if you're moving within a few years you're relying on resale value rather than bill savings. Studies generally show solar adds value to a home, but recovering the full system cost at sale is not guaranteed — a lease or PPA complicates a sale further.
Does solar still make sense in a cheap-electricity state?
Usually not on economics alone. At Idaho's 12.35¢/kWh a typical system takes roughly 19 years to pay back, which is most of its warrantied life. In those states solar is more of a hedge against future rate rises or an emissions decision than a clear financial win.
What makes the biggest difference to solar payback?
Your electricity rate, then your sun hours, then the price you negotiate. Rate and production both scale savings almost linearly, and the spread between a competitive quote (about $2.60/watt) and a doorstep quote (about $3.50/watt) can move payback by two to three years on its own.