At 2026 national averages, solar panels pay for themselves in about 18 years: an 8.2 kW system costs about $24,600 at $3.00/W and saves about $1,350 in year one. The 30% federal credit ended for homeowner-owned systems installed after 2025, so payback is longer than older guides show. High-rate states like Hawaii and California still land around 7–10 years.
Last updated September 29, 2026.
Key takeaways
- National simple payback is about 18.2 years; with ~3%/yr rate increases, cumulative savings pass the cost in about 15 years.
- Your electricity rate and your utility’s export (net-metering) rules matter far more than sunshine.
- The federal homeowner credit (§25D) is gone for 2026 installs, which lengthened national payback from about 12.8 to 18.2 years.
- Payback is the same at every bill size in this model; what changes it is rate, sun, net-metering rules and price per watt.
These figures come from our standard model (see the methodology):
| Model input | Value used |
|---|---|
| Monthly electric bill | $150 |
| Electricity rate | 16.3¢/kWh (model assumption; use the rate on your own bill) |
| Peak sun hours | 4.5 per day |
| System derate factor | 0.82 |
| Bill offset (blended net-metering mix) | 0.75 |
| Installed price | $3.00 per watt, no federal credit |
| Rate increases / panel degradation | 3%/yr and 0.5%/yr |
| Horizon | 25 years |
The model does not include inverter replacement, maintenance, financing costs, property or income taxes, or state incentives. Change any input and the answer moves, sometimes by a decade.
This guide shows what drives the timeline, how long payback runs state by state, how the end of the federal credit changed the math, and how to calculate your own number.