Affiliate disclosure: This page contains affiliate links. We may earn a commission if you click through and take action, at no extra cost to you. Learn more.
Solar Panel ROI Calculator
Enter your numbers below to find out if solar panels are worth the investment for your home. We'll calculate your payback period, 25-year ROI, and give you a Worth It Score from 0–100.
2026 average is about $2.60 per watt installed. A $150/mo bill usually needs a system around $19,000.
Federal ITC eliminated for 2026 installs. Enter 0 or any state/local credit.
US average is ~4-5 hrs. Check your zip code.
US average is about $0.19 (EIA, 2026). Check your bill.
Not sure? Most states still credit at or near retail. CA, AZ and some utilities pay much less.
If you sell early, an owned system adds resale value (LBNL research).
Sources & Methodology
- NREL U.S. Solar PV System Cost Benchmarks, annual installed cost data for residential, commercial, and utility-scale systems
- IRS Residential Clean Energy Credit, the 30% federal credit (Section 25D) that expired for systems installed after December 31, 2025
- U.S. Department of Energy, Homeowner's Guide to Going Solar, including cost, savings, and incentive data
By Sean Baldwin · Last reviewed July 2026
The Verdict
Worth it if: your payback period comes in at 10 years or less and you plan to stay in the home long enough to collect the savings afterward.
Not worth it if: your payback period runs past 15 years, or you're likely to sell before you reach break-even on the system cost.
Break-even threshold: a payback period of 10 years or less is where the score turns clearly favorable; under 8 years is a strong buy signal even without the federal credit.
Frequently Asked Questions
How long does it take for solar panels to pay for themselves?
The average solar panel payback period in the US is 7–14 years in 2026, depending on your electricity bill, local sun hours, system cost, and any state or local incentives you qualify for. Without the federal ITC (eliminated for new installs in 2026), payback periods are longer than in prior years, accurate inputs matter more than ever.
Is there a federal solar tax credit in 2026?
The federal Investment Tax Credit (ITC) for residential solar installations was eliminated for systems installed in 2026. Some states have their own solar incentives, check your state energy office for local credits, rebates, and net metering programs that may still apply.
Are solar panels worth it if I plan to sell my home?
Generally yes, studies show solar panels increase home resale value by $15,000–$20,000 on average, often close to the net cost of installation. Even if you sell before breaking even on energy savings, you may recoup your investment through a higher sale price.
How many peak sun hours does my area get?
Peak sun hours vary by location: Southwest US (Arizona, Nevada, California) averages 6–7 hours, the Southeast and Midwest average 4.5–5.5 hours, and the Northeast and Pacific Northwest average 3.5–4.5 hours. You can find your exact location using the NREL PVWatts tool.
Should I buy or lease solar panels?
Buying (outright or with a solar loan) is almost always the better long-term decision. You own the system and keep all the energy savings. Leasing is simpler upfront but your savings go largely to the leasing company, and leased systems can complicate home sales.
Example: Massachusetts Homeowner
High electricity rates and a long ownership timeline make this a clear win even without the federal ITC. A score above 70 means the payback period is reasonable and the long-term return is strong for this homeowner's situation.
How to calculate solar panel payback period
The payback period is the number of years it takes for your energy savings to equal your net upfront cost. Net cost = system price minus any state or local incentives you qualify for. Annual savings = your current electricity bill reduction based on your system's estimated output. A $25,000 system with no federal credit that saves you $1,800/year in electricity has a payback of 13.9 years. After that, every year is pure savings for the remaining 10+ years of the panel's useful life. The key variables are your electricity rate (higher = faster payback), your local sun hours (Southwest US gets 6–7, Northeast gets 3.5–4.5), and your system's actual production.
Is there a federal solar tax credit in 2026?
No. The 30% federal residential solar tax credit (Section 25D) ended on December 31, 2025. The One Big Beautiful Bill Act, signed in July 2025, shut it down almost a decade earlier than the Inflation Reduction Act had scheduled. There is no phase-down and no grace period, so a system bought with cash or a solar loan in 2026 gets $0 back from the IRS. That single change adds several years to the payback period on an owned system, which is why running your own numbers now matters far more than copying a payback figure from an older article. There is one meaningful exception. Third-party-owned systems, meaning solar leases and power purchase agreements (PPAs), can still capture a 30% federal credit under Section 48E, because the credit flows to the company that owns the equipment. A good installer will pass part of that value back to you through a lower lease rate. This narrows the usual gap between leasing and buying in 2026, though owning still tends to win over a 15 to 25 year horizon because you keep all of the energy savings. Point-of-sale rebates through the federal HEEHRA program may also apply to qualifying households and, unlike a tax credit, come off the purchase price up front. Check your state energy office and ask any installer to itemize every state, utility, and federal incentive you actually qualify for before finalizing your cost estimate.
Solar incentives in 2026: what's still available
The federal Investment Tax Credit (ITC) for residential solar was eliminated for new 2026 installs. However, state and utility incentives vary widely and can still significantly improve your ROI. Many states offer their own tax credits (New York at 25%, for example), rebates, or sales tax exemptions on solar equipment. Net metering policies, where your utility credits you for excess power you generate, remain in effect in most states and are a major factor in long-term savings. Check your state energy office and ask your installer what local incentives apply before finalizing your cost estimate.
Buying vs. leasing vs. solar loans: what actually makes sense
Buying outright or via a solar loan gives you ownership of the system and all the energy savings. A solar loan at 6–8% APR still typically produces positive cash flow from day one if your energy savings exceed the loan payment. Leasing or entering a Power Purchase Agreement (PPA) means you own nothing and your "savings" are the difference between the lease payment and your old bill, which is often marginal and sometimes negative as rates change. Leases can also complicate home sales. For most homeowners who plan to stay 7+ years, buying (cash or loan) usually still comes out ahead, though the 2026 loss of the federal credit narrows the margin against a lease that captures the 30% business credit.
Does solar increase home resale value?
Research from Lawrence Berkeley National Laboratory found that solar panels add an average of $15,000 to home sale prices nationwide, with higher premiums in markets with high electricity costs like California, New Jersey, and New York. The premium is roughly equivalent to the system's remaining energy value. However, this applies to owned systems, leased systems can actually complicate or slow a home sale, as buyers must either assume the lease or the seller must buy out the contract before closing.
Related Calculators
Further Reading
How We Calculate Your Score
The Worth It Score v2 is built on a full discounted cash flow model, not a simple payback table. We project up to 25 years of energy savings using your electricity rate, local sun hours, and utility export policy, with panel output declining 0.5% per year (NREL median) and electricity prices rising over time. We subtract maintenance, an inverter replacement around year 13, and loan payments if you finance, then discount everything back to today's dollars and compare the result to your net system cost. That economic result passes through a smooth logistic curve, so small input changes move the score gradually instead of jumping between bands.
- · Economic value (55% weight): net present value of all cash flows divided by net system cost. Break-even in today's dollars scores exactly 50.
- · Behavioral value (30% weight): a prospect theory adjustment (Tversky and Kahneman, 1992) that weights money going out about 2.25x more heavily than equivalent money coming in, matching how people actually experience a large purchase. Zero-down loans that cash-flow positive from day one score better here than the same deal paid in cash.
- · Payback vs. tenure (15% weight): rewards recovering your cost well within the years you plan to stay in the home, penalizes payback that outlasts your stay.
- · Resale premium: owned systems sold before year 25 get credit for added home value (about $3 per watt, depreciating with age, per Lawrence Berkeley National Laboratory). Leased or financed systems get no resale credit.
Defaults: $0.19/kWh electricity (EIA 2026 US average), 3.5%/yr electricity price growth (conservative; EIA projects 13-18% total increase by end of 2026), 5% discount rate, 60% self-consumption, $150/yr maintenance, 25-year horizon. The federal 25D residential credit was eliminated for installs after December 31, 2025. Leases and PPAs can still capture a federal business credit through 2027.
How to Cite This Calculator
If you reference this calculator in an article, blog post, or research, use one of the formats below. The Worth It Score methodology is fully documented and independently verifiable.
APA
Baldwin, S. (2026). Are Solar Panels Actually Worth It for Your Home? (2026). Worth It Calculators. https://worthitcalculators.com/solar-panel-roi/
MLA
Baldwin, Sean. "Are Solar Panels Actually Worth It for Your Home? (2026)." Worth It Calculators, August 25, 2026, https://worthitcalculators.com/solar-panel-roi/.
Plain text / web
Source: Are Solar Panels Actually Worth It for Your Home? (2026), Worth It Calculators (https://worthitcalculators.com/solar-panel-roi/)
View full methodology · About Worth It Calculators · Press & media