Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
In 2026, with no federal tax credit for homeowner-owned systems, modeled solar simple payback ranges from about 6.9 years in Hawaii and 8.9 in California to 9–10 years in Massachusetts, Rhode Island, Connecticut and Maine, and 21–28 years in low-rate states such as Texas, Louisiana and South Dakota. The median state is about 17 years; the national-average example is about 17.
Every figure below comes from one reproducible model using each state’s 2025 average residential electricity price (EIA), representative peak sun hours (NREL-based), and net-metering category, with a $3.00/W installed price and no federal credit — the 30% §25D credit ended for expenditures made after December 31, 2025. See the methodology for all inputs, and your state page for details. Last updated October 5, 2026.
Use these as starting points, not quotes. Your utility’s tariff, your roof, and your actual quote can move payback several years either way.
📈 Payback Period
What Determines Your Solar Payback Period in Each State?
Payback is installed cost divided by first-year savings. Across states, three inputs drive the differences: the electricity rate, the sun, and what your utility pays for exported power.
The model used for every state
Input
Value used
Installed price
$3.00/W (our assumption; EnergySage marketplace quotes averaged about $2.58–2.60/W in early 2026, while LBNL reported a $3.50/W median for 2024 cash purchases)
Annual production
kW × peak sun hours × 365 × 0.82
Year-1 savings
Production × state rate × bill offset
Bill offset (net-metering category)
Full retail 0.87 · net billing 0.70 · low export (CA, HI) 0.60 · no statewide net metering 0.55
The bill-offset factors and the 3% rate-increase assumption are modeling simplifications, not published tariffs. Real results depend on your utility’s rules.
Electricity rate. EIA’s 2025 residential averages range from 11.8¢/kWh in North Dakota to 40.6¢ in Hawaii, against a U.S. average of 17.3¢. This is the single biggest driver.
Sun hours. From 3.1 peak sun hours in Alaska to 6.5 in Arizona. Sun lowers the system size you need but matters less than rates.
Net metering. Full retail net metering lets exported kilowatt-hours offset imports one-for-one; net billing and avoided-cost export credits pay less. California’s Net Billing Tariff (NEM 3.0) and Hawaii’s export programs credit exports at a fraction of retail, which is why batteries are common there. The net metering calculator models your utility’s rules.
Because both cost and savings scale with system size, payback in this model does not depend on how big your system is — only on rate, sun, net metering and price per watt. Use the solar payback calculator to plug in your own quote.
📈 Payback Period
What Is the Solar Payback Period in Every State in 2026?
Here is the full 50-state list, fastest to slowest. The typical system size varies by state, so installed cost and 25-year savings differ, but the payback column is comparable across states.
Solar payback by state, 2026 (no federal credit)Inputs: 2025 EIA average residential price, sun hours from our state data, $3.00/W, bill offset by net-metering category. 25-year net savings (“25-yr net”) assume 3%/yr rate increases and 0.5%/yr degradation; year-1 savings = kW × sun hours × 365 × 0.82 × rate × bill offset.
State incentives are not included in the table. Where a state offers a credit — for example Hawaii (35% up to $5,000), New York (25% up to $5,000), South Carolina (25%, with annual limits), New Mexico (10% up to $6,000), Massachusetts and Arizona (up to $1,000) — payback there is shorter than shown. Confirm current availability on DSIRE.
Data visualization
Modeled solar payback ranges from 6.9 to 27.7 years across 12 states. Simple payback at $3.00/W with no federal credit for 2026 installs; flat rates. Source: EIA 2025 residential prices, NREL sun hours, GreenEnergyCalc model.
Chart summary: Bar colors show payback tiers: green is under 10 years, lime 10–13, yellow 13–20, orange 20–25 and red above 25. Hawaii (6.9 years) is about four times faster than Tennessee (27.7), and the three green states all have 2025 residential rates above 30¢/kWh. Tennessee and Georgia combine 13–15¢ rates with no statewide net metering in our model.
📈 Payback Period
Which States Have the Fastest Solar Payback?
Eleven states pay back in under 13 years: Hawaii, California, Massachusetts, Rhode Island, Connecticut, Maine, New York, New Hampshire, New Jersey, Vermont and New Mexico. Ten of the eleven have 2025 rates above 22¢/kWh.
Hawaii (6.9 years). At 40.6¢/kWh in 2025, Hawaii has the country’s highest rates, which overwhelm its low export credit. The state’s 35% credit (up to $5,000) would cut payback to about 5.0 years on a 6 kW system; many new systems pair solar with a battery.
California (8.9 years).California’s 32.5¢ rate and 5.8 sun hours keep payback under 9 years even though NEM 3.0 credits exports at a fraction of retail. There is no state solar credit, but SGIP has offered battery rebates.
Massachusetts, Rhode Island, Connecticut and Maine (9.0–9.6 years). Rates of 28–30¢ with full retail net metering do the work despite about 4.2–4.3 sun hours. Massachusetts adds a 15% state credit (up to $1,000) and SMART production payments; Connecticut, Rhode Island and Maine have had state or utility programs, so check current availability.
New York, New Hampshire, New Jersey and Vermont (10.2–12.3 years).New York’s 25% state credit (up to $5,000) would bring its 10.2 years to about 8.0 on an 8 kW system. New Jersey exempts solar equipment from sales tax.
New Mexico (12.3 years). The exception to the high-rate rule: New Mexico’s 6.2 sun hours and full retail net metering offset a 15.1¢ rate, and its 10% state credit (up to $6,000) helps further.
📈 Payback Period
Which States Fall in the Middle (13–20 Years)?
Twenty-seven states — from Maryland (13.1 years) to North Carolina and Indiana (19.6) — sit in the middle. Most have 13–20¢ rates, and the ones with full retail net metering do best.
Maryland, Colorado and Florida (13.1–13.3 years).Maryland has a 19.5¢ rate, while Colorado and Florida combine strong sun with full retail net metering at 15–16¢.
Pennsylvania and Arizona (14.2–14.4 years).Pennsylvania has fewer sun hours but a 19.3¢ rate. Arizona gets 6.5 sun hours, but net billing pays well below retail for exports; the state offers a credit of up to $1,000.
Nevada, Michigan and Alaska (17.0–17.7 years). Net billing lowers the value of exports. Nevada credits exports at roughly 75% of retail on its current tariff for new customers; Michigan and Alaska have higher rates (20.0¢ and 26.1¢) but fewer sun hours.
Ohio, Virginia, Minnesota and neighbors (15.8–19.6 years). Mid-level rates of 15–18¢ with full retail net metering, or net billing with somewhat higher rates.
In this range, the quote and financing matter most. A price of $2.60/W instead of $3.00/W cuts payback by about 13%, and a loan whose payment exceeds your monthly savings delays the point where you come out ahead. The solar loan calculator shows the effect of rate and term.
📈 Payback Period
Which States Have the Longest Solar Payback (20+ Years)?
Twelve states take 20 years or more, led by South Dakota (28.4), Tennessee (27.7) and Louisiana (26.8). Low rates and weak or no statewide net metering are the common causes.
No statewide net metering.Texas (21.0 years), Alabama (21.4), Georgia (23.8), Mississippi (25.0), Louisiana (26.8), Tennessee (27.7) and South Dakota (28.4) all fall in the 20+ group because the model assumes exports earn low avoided-cost or wholesale credits, so a solar-only system removes only about 55% of the bill. Some Texas retail plans and municipal utilities offer better buyback terms.
Cheap power.North Dakota (11.8¢) and Washington (13.1¢) have full retail net metering but some of the lowest rates in the country, giving 21.7- and 22.0-year paybacks.
Net billing plus modest rates.Arkansas, Kentucky and Idaho credit exports below retail and have rates under 14¢.
A payback above 20 years does not always mean a loss — 25-year net savings in the table are still positive everywhere because rates are assumed to rise 3% a year — but the margin is thin. In these states, compare quotes carefully, size the system to daytime use, and treat backup power or rate protection as the main reasons to go solar.
🏛️ Incentives
How Did the End of the 30% Federal Credit Change State Paybacks?
It lengthened every state’s payback by the same factor: new payback = old payback ÷ 0.7, or about 43% longer. Until December 31, 2025, homeowners could claim 30% under §25D; it was ended by the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025).
Data visualization
Ending the 30% federal credit adds 2 to 8 years of payback. Louisiana rises from 18.8 to 26.8 years at $3.00/W. Source: IRS (Section 25D ended after 12/31/2025), EIA 2025 rates, GreenEnergyCalc model.
Chart summary: Each 2026 bar equals the 2025 bar divided by 0.7, so the penalty grows with the original payback. Louisiana gains 8.0 years and Texas 6.3, while Hawaii gains about 2.1. The 2025 bars apply 30% to installed cost; the 2026 bars apply no federal credit.
The IRS treats the expenditure as made when installation is completed, so a system signed in 2025 but finished in 2026 gets no credit (IRS OBBB FAQ). What remains: 2025 installs are claimed on the 2025 return, unused credit from earlier years can still carry forward, and solar leases and PPAs may carry some §48E value if the system began construction by July 4, 2026 or is placed in service by December 31, 2027 — a benefit that reaches you only through the price offered. Our federal solar tax credit guide explains the details.
📈 Payback Period
How Can You Shorten Your Solar Payback Period?
Lower the price you pay, raise the share of your bill each panel removes, and claim every state and utility incentive you qualify for.
Data visualization
A $23,100 national-example system breaks even in about year 15 with 3% yearly rate increases. 7.7 kW at $3.00/W, 17.3¢/kWh, 0.75 bill offset, 0.5% yearly degradation, no federal credit. Source: EIA 2025 average residential price and usage, GreenEnergyCalc model.
Chart summary: With 3% yearly rate increases, cumulative savings pass the $23,100 system cost in year 15; with flat rates the break-even is year 18 (17.2 years). By year 25 the modeled net gain is about $22,800 with rising rates and $10,500 with flat rates. Both lines include 0.5% annual panel degradation.
Get more quotes. Our model uses $3.00/W; marketplace quotes can be lower. Every 10¢/W below $3.00 shortens payback by about 3%.
Size the system to your use. Under net billing or low export credit, panels that mainly export are worth much less than panels that offset your own use. A right-sized system usually covers most, not all, of your annual consumption in those states.
Stack state and utility incentives. State credits (Hawaii, New York, South Carolina, New Mexico, Massachusetts, Arizona), production payments (such as Massachusetts SMART and Illinois Shines), and utility rebates can take thousands off. Check DSIRE and your state page.
Add storage only where it pays. A battery adds thousands of dollars to a quote and, with no federal credit in 2026, helps most in low-export states (California, Hawaii) and on time-of-use rates with a wide peak spread; the time-of-use savings calculator tests your rate schedule.
Cut usage first. Efficiency upgrades shrink the system you need, and each kilowatt you avoid saves about $3,000 at our model price. Then run your numbers in the solar savings calculator.
Sources: EIA 2025 average residential electricity prices by state (Electric Power Monthly and Electricity Data Browser); NREL solar-resource data (sun hours); state utility commissions and DSIRE (net metering and incentives); IRS OBBB FAQ (federal credit); EnergySage and LBNL Tracking the Sun (prices). Model details: methodology.
Related calculators
Free tools for US homeowners — instant results, all 50 states.
Direct answers for US homeowners — sized for a $150/month electric bill.
In our state model, the median state pays back in about 17 years, and a national-average home (869 kWh/month, 17.3¢/kWh, 0.75 offset, $3.00/W) pays back in about 17 as well. The range runs from about 6.9 years in Hawaii and 8.9 in California to 27–28 years in Tennessee and South Dakota. No federal credit is included for 2026 installs.
Not for homeowner-owned systems. The 30% §25D credit ended for expenditures made after December 31, 2025, so it affects every state equally. Systems completed in 2025 are still claimed on the 2025 return. Some states keep their own credits, for example Hawaii (35% up to $5,000) and New York (25% up to $5,000); check current availability before relying on them.
In our model, Hawaii (6.9 years), California (8.9) and Massachusetts (9.0) are fastest, driven by 2025 residential rates of 30–41¢/kWh. South Dakota (28.4), Tennessee (27.7) and Louisiana (26.8) are slowest, with rates of 12.6–13.4¢/kWh and no statewide net metering. Eleven states pay back in under 13 years and twelve take 20 years or more.
Payback shortens. Simple payback assumes flat rates. If rates rise 3% a year while panels lose 0.5% of output a year, savings grow about 2.5% a year, and cumulative savings turn positive in about year 15 instead of 17.2 for the national example. Rising rates also increase 25-year net savings.
It is marginal without extra help. Our model gives Louisiana a 26.8-year simple payback and about $7,300 of net savings over 25 years for a 9 kW system; Idaho is 24.2 years and about $9,800 for 8 kW. Better results need a quote well below $3.00/W, a utility with good buyback terms, or high daytime use. Backup power may justify solar plus a battery on other grounds.
$150/month electric bill by state
System size and payback vary by electricity rate and sun hours — see your state.
18.19¢/kWh — US average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.5 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
National blend — solar assumed to offset 75% of the bill (87% in full-retail net-metering states, 55–70% elsewhere).
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.