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

The average residential solar installation runs $15,000 to $25,000. For a typical 7 kilowatt system, which covers most of a standard home’s electricity use, you are looking at around $19,500 out of pocket.

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 up to $1,000 in state tax credits plus a sales tax exemption on solar equipment. New York offers up to 25% back, capped at $5,000. New Jersey has no sales tax on solar and strong net metering policies. 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.

Without the federal tax credit, the national average payback period in 2026 is roughly 11 to 14 years, depending on your state. In high-electricity-rate states it can still be as low as 9 to 10 years. In low-rate states it can stretch past 20 years, at which point 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. Massachusetts homeowners pay around 24.5 cents per kilowatt-hour. Washington state homeowners pay closer to 10.5 cents. 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 add 2 to 3 years to 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

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, factoring in modest annual electricity rate increases, the lifetime savings come to roughly $55,000 against a $19,000 net investment.

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 does add to home resale value, roughly $15,000 to $20,000 on average. That partially offsets the math if you sell. 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 prices have increased an average of 2 to 4% per year historically. 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 add 2 to 3 years to your payback period. Check your state’s current policy before signing anything.

Get three quotes. Installation costs vary by 20 to 30% between installers in the same area. 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 under $100, solar is a tough financial case in most markets in 2026.

Frequently asked questions

Is there a federal solar tax credit in 2026?

No. The residential federal Investment Tax Credit (Section 25D) expired for systems installed after December 31, 2025. New residential solar installs in 2026 do not qualify for the 30% federal credit. State and local incentives vary, check your state energy office for what still applies in your area.

How long does it take for solar panels to pay for themselves in 2026?

Without the federal tax credit, the national average is roughly 11 to 14 years. It ranges from about 9 to 10 years in high-electricity-rate states like Massachusetts, California, and New York, to 18 to 23 years in low-rate states like Washington and Louisiana.

Are solar panels still worth it without the federal tax credit?

In high-electricity-rate states with strong state incentives and a long ownership timeline, yes. In low-rate states or for homeowners planning to move within 10 years, the math becomes very difficult without the federal credit. Run your actual numbers rather than relying on general claims.

Do solar panels increase home value?

On average, yes. Studies show solar adds roughly $15,000 to $20,000 to home resale value, though this varies significantly by market. You only realize that value when you sell, and it does not substitute for a positive payback calculation.

What monthly electricity bill makes solar worth it in 2026?

Without the federal credit, the bar is higher than in prior years. As a rough guide: if your bill is consistently below $100 to $120, the payback period in most markets exceeds 15 years and the financial case is weak. If your bill is regularly above $160, solar is still worth modeling seriously even without the federal credit.

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