If you are thinking about solar panels, you have probably already had at least one conversation with an installer. Maybe more. And if those conversations felt a little like a sales pitch, that is because they were.
I am not selling you solar panels. I am going to show you the math and let you decide.
Run your solar numbers: worthitcalculators.com/solar-panel-roi
What solar actually costs in 2026
Lawrence Berkeley National Laboratory’s Tracking the Sun report puts the median installed price of a residential solar system at $4.0 per watt in 2024, before any incentives, with the middle 60% of systems costing between $3.0 and $5.2 per watt. A 7 kilowatt system at that median comes to about $28,000, and the range runs from roughly $21,000 to $36,400.
The federal residential Investment Tax Credit (Section 25D) expired for systems installed after December 31, 2025. New residential solar installs in 2026 no longer qualify for the 30% federal credit. This is a significant shift, it adds years to the payback period and changes the math for a lot of households who were on the fence.
Some states still offer incentives that can partially offset the cost. Massachusetts offers a state tax credit of 15% of costs up to $1,000, plus a sales tax exemption on solar equipment (Massachusetts Department of Revenue). New York offers a credit of 25% of costs, capped at $5,000 (NYS Department of Taxation and Finance). New Jersey exempts solar equipment from sales tax (NJ Division of Taxation). If you are in a state with no local incentives, you are absorbing the full system cost.
Before running the numbers, check your state energy office or ask your installer what local programs currently apply.
The number that determines everything: payback period
The payback period is how long it takes for your electricity savings to cover the upfront cost of the system. This is the number installers sometimes gloss over. It matters more than almost anything else in this decision.
Payback varies enormously. In the three example households below it ranges from about 10 years to more than 20, and at the long end the financial case essentially does not exist.
Two things drive that range more than anything else.
First, your electricity rate. The higher you pay per kilowatt-hour, the more you save each month, and the faster the system pays for itself. According to the U.S. Energy Information Administration, the 2024 average residential rate was 29.35 cents per kilowatt-hour in Massachusetts and 11.90 cents in Washington. Same sun, very different math.
Second, your state’s net metering policy. Net metering lets you sell excess solar power back to the grid. States with strong net metering make solar significantly more valuable. Some states have weakened their programs in recent years, which can lengthen your payback period. It is worth checking your state’s current policy before committing.
How the calculator works
The Solar Panel ROI calculator looks at your system cost, your monthly electricity bill, your local electricity rate, any state or local tax credits, your estimated peak sun hours, and how long you plan to stay in the home.
A Worth It Score under 30 means the numbers do not support installing solar right now. Either the payback period is too long, your bill is too low to justify the cost, or you are planning to move before you break even. A score between 31 and 70 means it is worth looking at seriously, especially if your electricity rates are rising. Over 70 means solar is a financially strong move for your situation.
Three homes, three very different answers
These are illustrative scenarios with assumed inputs, not market averages. Each system cost is roughly what a 4.6 to 5 kilowatt system costs at Lawrence Berkeley National Laboratory’s 2024 median of $4.0 per watt, and the electricity rates are assumptions. For reference, the EIA’s 2024 state averages were 29.35 cents in Massachusetts, 14.94 in Texas and 11.90 in Washington.
The high-rate state, long-term homeowner
Location: Massachusetts. System cost: $20,000. Massachusetts state credit: $1,000. Net cost: $19,000. Monthly electricity bill: $180 at 24.5 cents per kilowatt-hour. Planning to stay: 15 years.
Monthly savings: about $162. Annual savings: about $1,944. Payback period: roughly 9.8 years. After payback, those savings continue for another 15 or more years of system life.
Over 25 years, with no rate increases and no loss of panel output, those savings add up to about $48,600 against a $19,000 net investment. Rate increases would add to that, and panel degradation would take away from it.
Worth It Score: 72. High rates and a long timeline still make this work, even without the federal credit.
The mid-rate state, shorter timeline
Location: Texas. System cost: $18,500. No meaningful state credits available. Net cost: $18,500. Monthly electricity bill: $140 at 13 cents per kilowatt-hour. Planning to stay: 7 years.
Monthly savings: about $119. Annual savings: about $1,428. Payback period: roughly 13 years, nearly twice the planned stay.
Solar can add to resale value, which would partially offset the math if you sell, but how much varies by market. But without the federal credit and with a short horizon, this is a difficult case.
Worth It Score: 29. The numbers do not support it at this timeline and these rates. Worth revisiting if you plan to stay longer or if installation costs drop.
The low-rate state
Location: Washington. System cost: $19,000. Net cost: $19,000. Monthly electricity bill: $85 at 10.5 cents per kilowatt-hour. Planning to stay: 10 years.
Monthly savings: about $68. Annual savings: about $816. Payback period: roughly 23 years.
The electricity is simply too cheap here. The financial case for rooftop solar does not exist at this rate, and removing the federal credit makes it even clearer.
Worth It Score: 8. Keep the $19,000 and invest it instead. The math is unambiguous.
Things worth knowing that installers may not emphasize
The federal credit is gone for 2026 residential installs. The 30% Section 25D credit expired December 31, 2025. If an installer quotes you a price that assumes this credit, ask them to redo the math without it. Some installers are still leading with the old pricing model.
Electricity rate inflation works in your favor. Your bill today is not your bill in 10 years. Electricity rates have generally trended up over time. Every time rates rise, your solar savings increase. A system that looks borderline today often looks better 10 years from now.
Net metering changes matter. Some states have quietly reduced what they pay you for excess power you send to the grid. This can lengthen your payback period. Check your state’s current policy before signing anything.
Get three quotes. Installed prices vary widely: in Lawrence Berkeley National Laboratory’s 2024 data, the middle 60% of residential systems cost between $3.0 and $5.2 per watt. Getting multiple quotes is not optional if you want a fair price.
Portable solar is a different conversation. If your goal is backup power during outages rather than eliminating your electricity bill entirely, portable solar power stations from companies like EcoFlow are a fraction of the cost and require zero installation.* Different use case, but worth knowing the option exists before you commit to a rooftop system.
Not sure if your electricity bill is high enough for solar to work? Check your electricity cost first. If your monthly bill is low, solar is a tougher financial case.
The bottom line
Solar was a clearer financial decision when the 30% federal credit was in play. In 2026, without it, the math is more dependent on where you live, what you pay for electricity, and how long you plan to stay.
For homeowners in high-rate states with long timelines, solar still works. For everyone else, run the actual numbers before committing.
The calculator will show you honestly where you land in about two minutes.
Get your Solar Worth It Score: worthitcalculators.com/solar-panel-roi
Related calculators: Electricity Cost Calculator · Savings Goal Calculator
*EcoFlow link is an affiliate link. We may earn a commission if you purchase through it, at no extra cost to you.
Calculate your solar payback period and ROI: Solar Panel ROI Calculator