Solar · Calculator · 2026
Enter your state and monthly electric bill to estimate your solar payback period, net system cost after applicable state incentives (the federal §25D credit expired for 2026 purchases), and total 25-year savings.
A typical residential solar system in 2026 pays back in 7–12 years now that the federal §25D credit has expired for purchases, depending on your state's electricity rate and production potential (a lease or PPA avoids the upfront cost). High-rate states like California, Massachusetts, and Hawaii pay back in 6–9 years. Lower-rate states like Georgia, Texas, and Florida average 9–13 years. Use the calculator below for your specific bill, state, and financing structure.
EIA state electricity rates · NREL production factors · 2026 state incentives (federal §25D expired for purchases)
Estimates for a typical 8–10 kW system, cash purchase, before incentives. High-rate states pay back faster; lower-rate states have longer payback but still positive lifetime economics.
| State | Avg. Rate (¢/kWh) | Avg. Production (kWh/kW/yr) | State Incentive | Est. Payback |
|---|---|---|---|---|
| Hawaii | 36.0¢ | 1,550 | 35% state credit | 4–6 yrs |
| Massachusetts | 25.0¢ | 1,150 | 15% state credit + SMART | 6–8 yrs |
| California | 27.0¢ | 1,500 | NEM 3.0 (reduced export) | 7–10 yrs |
| New York | 22.0¢ | 1,150 | 25% credit (up to $5,000) | 7–9 yrs |
| New Jersey | 18.0¢ | 1,200 | Net metering + SREC market | 7–9 yrs |
| Maryland | 16.5¢ | 1,250 | Grant program available | 8–11 yrs |
| Michigan | 18.0¢ | 1,200 | None | 8–11 yrs |
| North Carolina | 12.5¢ | 1,300 | 35% credit (cap $10,500) | 8–11 yrs |
| South Carolina | 13.5¢ | 1,350 | 25% state credit | 9–12 yrs |
| Arizona | 12.5¢ | 1,600 | 25% credit (cap $1,000) | 9–12 yrs |
| Florida | 13.8¢ | 1,400 | Full net metering | 9–12 yrs |
| Colorado | 13.0¢ | 1,500 | Xcel Solar*Rewards rebate | 9–12 yrs |
| Nevada | 13.0¢ | 1,700 | Modified net metering | 9–12 yrs |
| Virginia | 13.0¢ | 1,300 | None | 10–13 yrs |
| Texas | 12.9¢ | 1,450 | None statewide | 10–13 yrs |
| Georgia | 12.0¢ | 1,350 | None | 11–14 yrs |
Solar payback is calculated by dividing your net system cost (gross cost minus all incentives) by your annual electricity savings. A 10 kW system at $3.00/watt costs $30,000 gross. The federal §25D credit expired for 2026 purchases, so no federal credit reduces the cost; a lease or PPA may still capture 30% via §48E. In Florida at 13.8¢/kWh with 1,400 kWh/kW/yr of production, the system generates 14,000 kWh/year, saving roughly $1,932/year. Payback: $21,000 ÷ $1,932 = 10.9 years.
After payback, the remaining system life (typically 25–30 years total, 0.5%/yr degradation) is pure savings. A system with a 10-year payback on a 25-year panel warranty produces 15 more years of free electricity — typically $25,000–$50,000 in total savings depending on rate.
Cash purchase produces the fastest payback and highest total savings — no interest cost. Note that the federal §25D residential credit expired for systems purchased after December 31, 2025, so a 2026 purchase no longer earns it; a lease or PPA may still capture 30% via the §48E commercial credit, claimed by the installer.
Solar loans typically carry 5–10% interest rates. Monthly loan payments often roughly equal or exceed monthly electricity savings in early years, becoming cash-flow positive once the loan is paid off. A $21,000 loan at 6.99% over 12 years = $229/month payment; if your savings are $175/month, you're net negative $54/month during the loan term. After loan payoff: +$175/month free and clear. Total 25-year economics remain strongly positive despite the short-term negative cash flow.
System size (in kW) is estimated by dividing your annual electricity usage (kWh) by your state's average sun-hours per kW (the production factor). For example, a Florida home using 1,400 kWh/month (16,800 kWh/yr) with a production factor of 1,400 kWh/kW/yr needs a 12 kW system to produce 100% of its electricity.
Yes — most state solar tax credits, utility rebates, and SREC programs can be stacked with each other; the federal §25D credit expired for 2026 purchases, though lease/PPA systems may still capture 30% via §48E. Notable exceptions: utility rebates reduce the §48E credit basis for lease/PPA systems; the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E). Arizona's 25% state credit (capped at $1,000) remains available; the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E).
Solar payback period is the number of years until cumulative electricity savings equal your net system cost (after incentives). After the payback period, all electricity savings are pure profit. A system with a 9-year payback on a home you plan to own for 25 years produces roughly 16 years of free electricity plus increases home resale value.
The average solar payback period in 2026 is 7–12 years for a 2026 cash purchase now that the federal §25D credit has expired (a lease or PPA avoids the upfront cost and may still capture 30% via §48E). High-electricity-cost states like California (7–10 years), Massachusetts (6–8 years), and Hawaii (4–6 years) pay back faster. Low-rate states like Texas (10–13 years) and Georgia (11–14 years) take longer. Battery storage extends payback by 4–8 years but increases self-consumption in states with unfavorable export rates.
The federal Investment Tax Credit (ITC) is 30% of the total system cost for residential solar installations placed in service through December 31, 2032. It steps down to 26% in 2033 and 22% in 2034. A $25,000 system earns a $7,500 tax credit applied dollar-for-dollar against federal income tax owed. If your credit exceeds your tax liability, the unused portion carries forward to future tax years.
Solar remains worthwhile in California after NEM 3.0, but payback extended from ~6 years to ~9–12 years. The critical change: export credit rates dropped ~75%, making self-consumption far more valuable than selling excess power. Battery storage substantially improves the economics by shifting excess daytime production to peak evening hours. Most California homeowners with high bills and battery storage still clear 8–10 year payback.
Yes — most state credits, utility rebates, and SREC programs can be stacked with each other. Notable examples: Arizona's 25% state credit (capped at $1,000); Hawaii's 35% state credit. The federal §25D credit expired for 2026 purchases, though lease/PPA systems may still capture 30% via §48E. Confirm details with your installer. DSIRE.org is the authoritative database of all state and utility incentives.
Yes — Lawrence Berkeley National Laboratory (LBL) research finds solar adds approximately $4/watt to home resale value at the time of sale, for systems that are owned (not leased). A 10 kW system adds roughly $40,000 to sale price on average. This value varies significantly by market: strong in California, New York, and the Northeast; more modest in lower-electricity-cost markets. Leased systems typically do not add value and can complicate the sale.
Owned systems transfer with the home and typically increase the sale price. Financed systems (loans) can either be paid off at closing or transferred to the new owner if they qualify. Leased systems or PPAs require the buyer to assume the contract — some buyers decline, which can complicate or delay the sale. For this reason, solar loans and cash purchases are generally preferred over leases for homeowners who may sell within the panel's lifetime.
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