Pick your metro and set your system size, installed cost, and electricity rate to see your cash-purchase payback period and first-year savings — priced without the federal §25D credit, which expired for 2026 purchases.
With the federal §25D credit expired for 2026 purchases, a cash-bought residential system in the 32 metros we model outside California pays back in roughly 11 to 14 years — a typical Tampa system, the calculator’s default, runs about 11.4 years at the Florida average residential rate (EIA, July 2026). Your installed cost and electricity rate decide most of it. Pick your metro below, set your system size, cost, and rate, and the calculator shows your payback period and first-year savings. Nothing you enter is stored or sent.
Sliders open at a typical system size and installed cost for your metro, and at your state’s average residential electricity rate (EIA) — not your utility’s tariff, so set the rate from your own bill. 2026 cash purchases no longer qualify for the federal §25D credit — this tool prices payback without it. Runs in your browser; nothing you enter is stored or sent.
California metros are not in the picker: under NEM 3.0, exported power is credited far below the retail rate, and this calculator values every kilowatt-hour at the retail rate with no self-consumption share, so it cannot price a California payback. See the NEM 3.0 tracker.
Payback period11.4 yrs
First-year bill savings$2,493
At Tampa, FL’s production and 15.0¢/kWh — the Florida average residential rate (EIA, July 2026) — a 9.8 kW system offsets about $2,493 of electricity a year.
Model assumption: the Arizona, Georgia and North Carolina figures value every kilowatt-hour the system produces at the state-average retail rate, as if all of it offset power bought from the grid. Those utilities credit exported power at far less: APS at 5.554¢/kWh (Rate Rider RCP, from September 1, 2026) and TEP at 5.13¢/kWh (Rider R-14 RCP, from October 1, 2025); Georgia Power at 7.2188¢/kWh (the 2026 solar avoided-cost rate of 3.2188¢ plus the 4¢ renewable generation adder; Georgia Power rooftop-solar FAQ; Rate RNR-11, for 2026); Duke Energy Carolinas at 4.53¢/kWh (Rider RSC, effective July 1, 2026), so real savings run lower, and payback longer, for a home that exports part of its output. Duke Energy Progress’s export credit was not verified.
By-state reference methodology
Payback ranges for the states the calculator models come from its own metro data (see the note above the table), and the worked example is the calculator’s default metro: installed cost ÷ first-year bill savings, with no rate escalation or panel degradation. Bands marked † predate the EIA rate update and were not recomputed. The general reference assumptions that follow are not the calculator’s inputs. System cost uses national average of $3.00/watt installed (2026 SEIA data). Electricity rates are each state’s average residential price from the U.S. EIA Electric Power Monthly, Table 5.6.A (July 2026) — a state average, not any one utility’s tariff. Solar production factors from NREL PVWatts annual averages by state. the federal §25D residential credit (30% of system cost, IRS Form 5695) expired for 2026 purchases; §48E (for systems placed in service by December 31, 2027) may apply to lease/PPA. State incentives sourced from DSIRE. Savings assume 80% system offset of current bill; 0.5%/yr electricity rate escalation. System degradation: 0.5%/yr over 25 years. Actual results vary by roof orientation, shading, installer pricing, and utility rate changes.
Solar Payback Period by State — 2026 Reference
For Arizona, Florida, Georgia, North Carolina and Texas, the payback column is the range across this calculator’s metros in that state — each metro’s typical system size and installed cost, cash purchase, at the state’s average residential rate (EIA, July 2026), computed with the same math as the tool above. California’s band is withdrawn: under NEM 3.0 exports are credited far below the retail rate, and this calculator values every kilowatt-hour at the retail rate, so it cannot price a California payback. Bands marked † are illustrative estimates for states the calculator does not model; they are not derived from its data. A higher rate alone does not make payback faster: Georgia has the highest rate of the 5 states it models (16.3¢/kWh), yet not the fastest range — installed cost and production move payback as much as the rate does. Model assumption: the Arizona, Georgia and North Carolina figures value every kilowatt-hour the system produces at the state-average retail rate, as if all of it offset power bought from the grid. Those utilities credit exported power at far less: APS at 5.554¢/kWh (Rate Rider RCP, from September 1, 2026) and TEP at 5.13¢/kWh (Rider R-14 RCP, from October 1, 2025); Georgia Power at 7.2188¢/kWh (the 2026 solar avoided-cost rate of 3.2188¢ plus the 4¢ renewable generation adder; Georgia Power rooftop-solar FAQ; Rate RNR-11, for 2026); Duke Energy Carolinas at 4.53¢/kWh (Rider RSC, effective July 1, 2026), so real savings run lower, and payback longer, for a home that exports part of its output. Duke Energy Progress’s export credit was not verified.
State
Avg. Residential Rate (¢/kWh, EIA July 2026)
Avg. Production (kWh/kW/yr)
State Incentive
Est. Payback
Hawaii
48.0¢
1,550
35% state credit
4–6 yrs†
Massachusetts
30.5¢
1,150
15% state credit + SMART
6–8 yrs†
California
33.6¢
1,500
NEM 3.0 (reduced export)
Withdrawn (NEM 3.0)
New York
29.9¢
1,150
25% credit (up to $5,000)
7–9 yrs†
New Jersey
25.2¢
1,200
Net metering + SREC market
7–9 yrs†
Maryland
21.4¢
1,250
Grant program available
8–11 yrs†
Michigan
23.1¢
1,200
None
8–11 yrs†
North Carolina
15.2¢
1,300
None
12.2–13.0 yrs
South Carolina
15.5¢
1,350
25% state credit
9–12 yrs†
Arizona
15.4¢
1,600
25% credit (cap $1,000)
11.7–13.1 yrs
Florida
15.0¢
1,400
Full net metering
10.7–13.9 yrs
Colorado
17.0¢
1,500
Xcel Solar*Rewards rebate
9–12 yrs†
Nevada
12.8¢
1,700
Modified net metering
9–12 yrs†
Virginia
17.5¢
1,300
None
10–13 yrs†
Texas
15.9¢
1,450
None statewide
12.3–13.7 yrs
Georgia
16.3¢
1,350
None
11.9–13.1 yrs
How solar payback works
Solar payback is calculated by dividing your net system cost (gross cost minus all incentives) by your annual electricity savings. The calculator’s default, a typical Tampa system, is 9.8 kW at $28,420 cash ($2.90/watt). 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 (for systems placed in service by December 31, 2027). At 15.0¢/kWh — the Florida average residential rate (EIA, July 2026) — and the calculator’s calibrated Tampa bill offset of 1,692.5 kWh per installed kW a year (set so the tool reproduces the metro’s modelled payback; it is not panel output, which the table below gives by state), the system offsets about 16,586 kWh/year, saving roughly $2,493/year. Payback: $28,420 ÷ $2,493 = 11.4 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.
Financing: cash vs solar loan
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 (for systems placed in service by December 31, 2027), 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.
Frequently Asked Questions
How is solar system size calculated?
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.
Can I get both the federal ITC and state solar incentives?
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 (for systems placed in service by December 31, 2027). 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, for systems placed in service by December 31, 2027). 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, for systems placed in service by December 31, 2027).
What does solar payback period mean?
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.
How long does solar take to pay back in 2026?
With the federal §25D credit expired for 2026 purchases (a lease or PPA avoids the upfront cost and may still capture 30% via §48E, for systems placed in service by December 31, 2027), a cash-bought residential system in the 32 metros this calculator models pays back in roughly 11 to 14 years. By state, at each state's average residential rate (EIA, July 2026), its metros run: Arizona 11.7–13.1, Florida 10.7–13.9, Georgia 11.9–13.1, North Carolina 12.2–13.0 and Texas 12.3–13.7 years. A higher rate alone does not make payback faster: Georgia has the highest rate of the 5 states it models (16.3¢/kWh), yet not the fastest range — installed cost and production move payback as much as the rate does.
What is the 2026 federal solar tax credit?
The residential §25D credit expired for 2026 purchases, so a 2026 outright purchase earns no federal credit and a $25,000 system earns $0. A lease or PPA may still capture 30% via installer, under the commercial clean energy credit (§48E, for systems placed in service by December 31, 2027), which reaches you as a lower monthly payment rather than a credit on your own return. State tax credits, utility rebates and SREC programs remain available and unaffected. Consult a tax professional regarding current Section 25D and Section 48E eligibility.
Is solar worth it in California after NEM 3.0?
Under NEM 3.0, exported power is credited well below the retail rate, so solar in California now pays mainly through self-consumption. This calculator does not price a California payback: it values every kilowatt-hour a system offsets at the retail rate and sets no export credit or self-consumption share, so it cannot model NEM 3.0, and its California metros are left out of the picker. Installed cost does not depend on NEM: the 4 California metros it holds run 8.6–9.0 kW at $24,940–$26,100 cash ($2.90 per watt). Battery storage can shift daytime production to evening peak hours and raise self-consumption; price a battery separately.
Can I get both federal and state solar incentives?
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 (for systems placed in service by December 31, 2027). Confirm details with your installer. DSIRE.org is the authoritative database of all state and utility incentives.
Does solar increase home value?
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.
What happens to solar panels when you sell your house?
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.
