Is Solar Worth It in 2026?
Electricity rates through July 2026 · Updated October 12, 2026
The 30% federal tax credit does not apply to a solar system placed in service in 2026, which raises the effective cost of any quote by about 43%: you now pay the whole price instead of 70% of it. Whether solar still pays comes down to your electricity rate, because every kilowatt-hour your panels produce is one you do not buy. Residential rates run from 48.00¢/kWh in Hawaii to 12.72¢ in Louisiana, a spread of about 3.8 times, which matters more than the difference in sunshine between most states.
What the credit ending actually does
The credit was worth 30% of the installed cost, so a system that cost you 70 cents on the dollar now costs the full dollar. That is a 43% increase in what you pay, and it stretches payback by the same proportion in every state. What differs by state is how many years that adds.
| State | Rate | Payback with the 30% credit | Payback without it | Years added |
|---|---|---|---|---|
| Hawaii | 48.00¢ | 3.3 years | 4.7 years | +1.4 |
| United States (average) | 18.31¢ | 8.7 years | 12.4 years | +3.7 |
| Louisiana | 12.72¢ | 12.5 years | 17.9 years | +5.4 |
Illustrative only: a $25,000 quote producing 11,000 kWh a year, valued at each state's residential rate, with no financing cost and no rate escalation. Your quote and your roof's production will differ, which is what the calculator below is for. Rates from EIA, July 2026.
Work out your own payback
Every solar quote states an estimated annual production in kilowatt-hours. Put that and the price in here, and this applies your state's measured electricity rate. We do not estimate your roof: shading, tilt, and orientation decide production, and your installer has actually looked at it.
Simple payback against avoided electricity purchases at today's rate. It assumes you use or are credited for everything you produce, ignores financing, maintenance, and any state or utility incentive, and holds the electricity rate flat. Rising rates shorten payback; export credits below retail lengthen it.
Worked example, without JavaScript: in Hawaii, at 48.00¢/kWh, a system producing 11,000 kWh a year avoids about $5,280 of electricity purchases annually. A $25,000 quote divided by that is about 4.7 years. In Louisiana, at 12.72¢, the same system avoids $1,399 a year and takes about 17.9 years.
What a kilowatt-hour of solar is worth, by state
Ranked by residential electricity rate, which is what each kWh of output is worth against a bill.
| State | Rate (¢/kWh) | Value per 1,000 kWh | Payback on the illustrative quote |
|---|---|---|---|
| Hawaii | 48.00 | $480 | 4.7 years |
| California | 33.61 | $336 | 6.8 years |
| Maine | 32.41 | $324 | 7.0 years |
| Massachusetts | 30.49 | $305 | 7.5 years |
| New York | 29.90 | $299 | 7.6 years |
| Alaska | 28.83 | $288 | 7.9 years |
| Rhode Island | 28.29 | $283 | 8.0 years |
| New Hampshire | 26.60 | $266 | 8.5 years |
| District of Columbia | 25.21 | $252 | 9.0 years |
| New Jersey | 25.19 | $252 | 9.0 years |
| Connecticut | 24.16 | $242 | 9.4 years |
| Vermont | 23.75 | $238 | 9.6 years |
| Michigan | 23.05 | $230 | 9.9 years |
| Pennsylvania | 21.72 | $217 | 10.5 years |
| Maryland | 21.41 | $214 | 10.6 years |
| Ohio | 19.45 | $194 | 11.7 years |
| Illinois | 19.22 | $192 | 11.8 years |
| Wisconsin | 19.06 | $191 | 11.9 years |
| Delaware | 18.48 | $185 | 12.3 years |
| Virginia | 17.55 | $176 | 13.0 years |
| Minnesota | 17.45 | $174 | 13.0 years |
| Colorado | 17.00 | $170 | 13.4 years |
| Indiana | 16.73 | $167 | 13.6 years |
| Alabama | 16.40 | $164 | 13.9 years |
| Georgia | 16.27 | $163 | 14.0 years |
| Missouri | 16.09 | $161 | 14.1 years |
| New Mexico | 16.09 | $161 | 14.1 years |
| Iowa | 15.99 | $160 | 14.2 years |
| Oregon | 15.97 | $160 | 14.2 years |
| Texas | 15.88 | $159 | 14.3 years |
| West Virginia | 15.78 | $158 | 14.4 years |
| South Carolina | 15.47 | $155 | 14.7 years |
| Arizona | 15.38 | $154 | 14.8 years |
| South Dakota | 15.37 | $154 | 14.8 years |
| Kansas | 15.27 | $153 | 14.9 years |
| North Carolina | 15.16 | $152 | 15.0 years |
| Florida | 15.03 | $150 | 15.1 years |
| Montana | 14.99 | $150 | 15.2 years |
| Washington | 14.71 | $147 | 15.5 years |
| Mississippi | 14.54 | $145 | 15.6 years |
| Wyoming | 14.36 | $144 | 15.8 years |
| Oklahoma | 14.35 | $144 | 15.8 years |
| Arkansas | 14.33 | $143 | 15.9 years |
| Kentucky | 13.81 | $138 | 16.5 years |
| Nebraska | 13.78 | $138 | 16.5 years |
| Idaho | 13.73 | $137 | 16.6 years |
| Tennessee | 13.71 | $137 | 16.6 years |
| North Dakota | 13.41 | $134 | 16.9 years |
| Utah | 13.12 | $131 | 17.3 years |
| Nevada | 12.77 | $128 | 17.8 years |
| Louisiana | 12.72 | $127 | 17.9 years |
Sorted by rate, so the states where solar is worth most sit at the top. The national average payback on the same illustrative quote is 12.4 years. Residential rates from EIA, July 2026.
The variable this page does not capture
The table above assumes every kilowatt-hour you generate offsets one you would have bought. That holds under full retail net metering. Under net billing, which California and a growing number of states have adopted, power you export is credited well below the retail rate, so the value of a system depends heavily on how much you use on site while the sun is up.
Those rules change by state and by utility, and often mid-year, so we do not reproduce them here. The DSIRE database, maintained at North Carolina State University, tracks net metering and every state and utility incentive. Check your own rules there before trusting any payback number, including ours.
Frequently asked questions
Is there still a 30% federal tax credit for solar?
Not for a system placed in service in 2026. The Residential Clean Energy Credit (Section 25D) was worth 30% of the cost of a home solar installation, and the IRS states that it "is not available for any property placed in service after December 31, 2025." State and utility incentives are separate and still exist in many places.
How much did losing the credit change the math?
It raises the effective cost of any quote by about 43%, because you now pay the whole price instead of 70% of it. On an illustrative $25,000 system producing 11,000 kWh a year, payback in United States goes from about 8.7 years to about 12.4. The percentage is the same everywhere; the number of years it adds depends on your electricity rate.
Where does solar pay off fastest?
Wherever electricity is most expensive, because every kWh your panels make is a kWh you do not buy. Residential rates run from 48.00¢/kWh in Hawaii down to 12.72¢/kWh in Louisiana, a spread of about 3.8 times, per EIA. That spread matters more than the difference in sunshine between most states.
Does it matter what my utility pays for power I export?
Yes, and it can change the answer. Under full retail net metering an exported kWh is worth the same as one you use. Under net billing, which California and a growing number of states have moved to, exports are credited well below retail, so the value of solar depends on how much you consume on site. We do not track those rules state by state; the DSIRE database maintains them.
What does a home solar system cost?
We do not publish a national average. Quotes vary by roof, system size, equipment, and installer, and the figures published by installers are marketing. The calculator on this page uses your own quote and your own quote's production estimate, applied to your state's measured electricity rate.
Related
Sources: EIA residential electricity prices by state, IRS (credit status), and DSIRE (state and utility incentives, net metering). This is not tax or investment advice. See methodology.