The payback pillar
Solar payback period by state
Payback is one division problem: what the system costs, divided by what it saves each year. Everything else is an argument about the inputs. This hub runs that division for the 13 states in our index on one stated illustration, so the states are comparable: an 8 kW system at a $23,600 gross price (the U.S. Department of Energy's Q1 2025 residential benchmark of $2.95 per watt DC, in 2024 dollars, used across this site), no federal credit, because homeowner installations completed after December 31, 2025 no longer qualify for one, and every kilowatt-hour valued at the state average residential price from the U.S. Energy Information Administration. Valuing all production at the retail price is the optimistic bound: where exports are paid below retail, real payback runs longer, and the calculation guide in this pillar shows how to apply that haircut to your own quote.
- One stated illustration for every state
- Prices from EIA, production ranges from NREL context
- No federal credit assumed after 2025
Payback ranges on the stated illustration
Click any column header to sort. The savings range pairs each state production range (kilowatt-hours per installed kilowatt per year) with its EIA average residential price. The payback range is $23,600 divided by those savings figures. Your quote will differ in size, price, roof, and export rule; treat this table as the map, then price your own roof in the estimator.
| State | Electricity price (cents per kWh) | Production (kWh per kW per year) | Illustrated annual savings | Payback range (years) |
|---|---|---|---|---|
| California | 33.60 | 1,350 to 1,600 | $3,629 to $4,301 | 5.5 to 6.5 |
| Massachusetts | 31.37 | 1,150 to 1,300 | $2,886 to $3,262 | 7.2 to 8.2 |
| New York | 26.95 | 1,050 to 1,250 | $2,264 to $2,695 | 8.8 to 10.4 |
| Arizona | 15.55 | 1,550 to 1,750 | $1,928 to $2,177 | 10.8 to 12.2 |
| Texas | 16.11 | 1,300 to 1,550 | $1,675 to $1,998 | 11.8 to 14.1 |
| Illinois | 18.74 | 1,100 to 1,300 | $1,649 to $1,949 | 12.1 to 14.3 |
| Nevada | 13.77 | 1,550 to 1,750 | $1,707 to $1,928 | 12.2 to 13.8 |
| Florida | 15.70 | 1,300 to 1,500 | $1,633 to $1,884 | 12.5 to 14.5 |
| Indiana | 17.34 | 1,100 to 1,300 | $1,526 to $1,803 | 13.1 to 15.5 |
| Ohio | 17.85 | 1,050 to 1,250 | $1,499 to $1,785 | 13.2 to 15.7 |
| Virginia | 16.36 | 1,150 to 1,350 | $1,505 to $1,767 | 13.4 to 15.7 |
| North Carolina | 15.05 | 1,200 to 1,400 | $1,445 to $1,686 | 14.0 to 16.3 |
| Georgia | 14.53 | 1,150 to 1,350 | $1,337 to $1,569 | 15.0 to 17.7 |
Sources: state electricity prices and production ranges are the checked values in each state page record (EIA Electric Power Monthly average price by state, 2025; production context from NREL), verified October 4, 2026, and the method is the same one the state pages use. Cost basis: DOE Solar Photovoltaic System Cost Benchmarks, Q1 2025, checked October 30, 2026. Table recomputed October 30, 2026.
How to read this table
Two inputs do almost all the work. The electricity price decides what a produced kilowatt-hour is worth, and the production range decides how many of them a kilowatt of panels makes. High-price states forgive weaker roofs; low-price states forgive nothing. California pairs the highest price in the index with strong production, so its illustrated range is the shortest. Texas pairs strong production with a mid-range price, so the same system takes roughly twice as long to earn back there. Neither figure is a quote. The export rule is the third input the table cannot show: energy you use yourself is worth the retail price, while exported energy may be credited well below it, which stretches payback in net billing states. Read your state page for the export rule to verify, then run the haircut math in how payback is calculated.
What changed for 2026 installations
Older payback articles across the web still subtract a 30 percent federal credit before dividing. That credit, the Section 25D residential clean energy credit, does not apply to expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is completed. A system finished in 2026 therefore starts payback from its full price, which is why every range on this page is longer than the figures in pre-2026 articles using the same inputs. State and utility incentives still exist in places and are tracked live in DSIRE. The full status, including what a lease or power purchase agreement changes about who claims incentives, is in the solar tax credit status guide.
How payback is calculated
The formula, a worked California example at full retail value, and the same example with an export haircut applied, plus the adjustments calculators skip: degradation, financing, and rate changes.
Read the calculation guide
Solar tax credit status
What ended on December 31, 2025, what the IRS says counts as an expenditure, what state and utility programs remain, and how leases and PPAs treat incentives differently.
Read the credit status guide
Payback if you move or sell
The two-clock worksheet: savings recovered before a sale, the unrecovered balance, and what the Berkeley Lab sales research does and does not promise about a solar premium.
Read the moving guide
Is solar worth it in 2026?
Read the guide
SREC prices by market
Read the guide
Income-qualified solar programs
Read the guide
State solar tax credits, 2026
Read the guide
Solar property and sales tax exemptions
Read the guide
Lease, PPA and the 48E credit
Read the guide
Form 5695 for 2025 solar installs
Read the guide
Three ways to shorten a real payback
First, price per watt: every dollar off the gross price shortens payback in direct proportion, which is why the quote red flags guide and competing quotes matter more than panel brand. Second, self-consumption: in net billing states, shifting daytime loads or adding storage can be worth more than extra panels, and the battery guide works through when storage pays. Third, right-sizing: a system sized past your own usage exports the surplus at the lowest value on your tariff, so start from the panel sizing guide before accepting a roof-filling design.
Frequently asked questions
What is a typical solar payback period in 2026?
On this site stated illustration, the 13 indexed states range from about 5.5 years to about 18 years, with the spread driven mostly by the state electricity price. Any single national figure hides that spread, and figures quoted from before 2026 usually assumed a federal credit that new installations no longer receive.
Why is my installer payback quote shorter than the table?
Installers often assume full retail value for every kilowatt-hour, add future rate increases, or subtract incentives your installation may not qualify for. Ask which of those assumptions is in the quote, then re-run the division with the export haircut in the calculation guide.
Does payback include the value of my home changing?
Not in this table. Payback here is bill savings only. A possible sales premium is a separate, less certain recovery channel, covered in the moving and selling guide in this pillar.
Should a long payback rule solar out?
Not by itself. Payback ignores savings after the break-even year, roof timing, and how long you plan to stay. It is a screening number. A payback longer than your planned stay deserves the two-clock worksheet before you decide.