Is Solar Worth It Across the South in 2026?

Full transcript

Federal credit (cash, 2026)

Start with the rule change that resets everything. The federal residential solar tax credit, Section 25D, expired for systems bought with cash in 2026. So a cash buyer today gets zero federal credit, and every cash payback in this video already reflects that. If you go through a lease or a power-purchase agreement instead, the installer may still capture thirty percent through the Section 48E commercial credit, and pass some of that on to you. That is a different ownership path, not the cash price. Again, general information, not financial advice.

Four states. Four different payback timelines.

Here is the headline. A typical southern solar system runs between twenty-four and thirty thousand dollars as a cash purchase. But cost is not the same as payback. In fact, the state with the most expensive system pays back the fastest, and the cheapest pays back the slowest. The reason is not sun. It is a policy most buyers never ask about. Let us walk through all four. Side by side: Arizona installs for about twenty-five thousand five hundred dollars, a twelve-year cash payback. Georgia is the cheapest to install but the slowest to pay back, at fourteen years. Texas, also fourteen. And Florida, the priciest at nearly thirty thousand dollars, pays back the fastest, in about eleven and a half years. Through a lease, every one of these drops by three to four years. Keep that spread in mind, and let us see what creates it.

Arizona — the most sun, a small credit, a catch

Start in Arizona, the sunniest state in our group. A typical Phoenix-area home, served by a utility like APS, installs about eight point eight kilowatts of solar. Arizona gets about six and a half kilowatt-hours of sun per square meter per day, the highest of the four. More sun means each panel generates more, which should mean the fastest payback in the country. As a 2026 cash purchase the system runs around twenty-five thousand five hundred twenty dollars, with no federal credit to offset it. Arizona does offer a state tax credit, twenty-five percent of system cost, but capped at just one thousand dollars. Helpful, not decisive. Here is the catch that holds Arizona back. Its utilities use net billing, not full net metering. The power you export to the grid is credited below the retail rate, so all that extra sun is worth less than you would think. The result is a solid but not spectacular twelve-year cash payback, or about eight and a half through a lease.

Georgia — cheapest to install, slowest to pay back

Now Georgia, where the sticker price looks the most tempting. Georgia is the cheapest of the four to install, about twenty-four thousand three hundred sixty dollars for a typical eight point four kilowatt system on Georgia Power territory. But Georgia gets the least sun of the four, about five and a quarter kilowatt-hours per square meter per day, and it offers no state solar tax credit. Worse, Georgia credits your exported power at avoided cost, a low wholesale-style rate, with monthly netting that is capped. Cheap to buy, but the savings come slowly. Put it together and Georgia has the lowest sticker price but the slowest cash payback of the group, about fourteen years, or roughly ten through a lease. The cheapest system is not the best deal.

Texas — high rates, but it is on you to shop

Texas is the wildcard, because so much depends on the plan you choose. A typical Houston-area system on CenterPoint territory is larger, about nine point two kilowatts, and runs around twenty-six thousand six hundred eighty dollars as a cash purchase. Texas has the highest electricity rate of the four, about fifteen and a half cents a kilowatt-hour, and that high rate should make solar pay back fast. But Texas has no statewide net-metering mandate. Whether your exported power is worth full retail or almost nothing depends entirely on the retail electricity plan you sign. Some plans buy back generously, many barely at all. On a typical plan the bigger system and that uncertainty land Texas at about fourteen years cash, just under ten through a lease. The single most valuable move in Texas is to shop a solar-friendly buyback plan before you sign.

Florida — the priciest, and the fastest

Which brings us to Florida, and the twist. Florida is the most expensive to install, nearly twenty-nine thousand six hundred dollars for the largest system in our set, about ten point two kilowatts on FPL territory. And here is its secret weapon. Florida still offers full-retail net metering. Every kilowatt-hour you export is credited at the same fourteen cents you would have paid the utility. Your solar is worth its full value, not a discounted export rate. So even though Florida costs the most, it pays back the fastest, about eleven and a half years cash, or roughly eight through a lease. A big system, good sun, and full-retail credit beat a low sticker price every single time.

Net metering decides more than sun or price

So here is the lesson the four states teach together. Arizona has the most sun but credits exports below retail, so it lands at twelve years. Florida has less sun and the highest price, but full-retail net metering, and it wins at eleven and a half. Georgia and Texas, with weak or no net-metering rules, trail at fourteen. Before you ask about panels or price, ask what your utility pays for the power you send back.

The ownership path can move you 3–4 years

There is one more lever, and it is the biggest of all in 2026: how you pay. Buy with cash and you get no federal credit. But the lease and power-purchase basis for these same systems is far lower, roughly seventeen to twenty-one thousand dollars, because the installer captures the thirty percent commercial credit. That is why every lease payback in this comparison is three to four years faster than cash. The trade-off is ownership, and the fine print is worth reading closely. Put the cash paybacks side by side and the spread is clear. Florida fastest at eleven and a half years, Arizona next at twelve, Georgia and Texas trailing at fourteen. Same panels, very different math, and net metering is doing most of the work.

Rate × generation × net-metering, then cash vs. lease

To read your own payback, stack four things. Your electricity rate, because the more you pay the grid the more you save. Your sun and roof, because more generation pays back faster. Your net-metering rule, because it sets what your exported power is actually worth. And your ownership path, cash versus lease, which alone can move you three to four years.

Cheapest to install is rarely fastest to pay back

The bottom line for the South in 2026: do not shop on sticker price alone. Florida costs the most and pays back the fastest. Georgia costs the least and pays back the slowest. Your rate, your roof, and your net-metering rule decide your number, not the headline price.