Updated January 2026
Solar Panel ROI Calculator 2026 – Payback, Savings & Incentives for All 50 US States
Instant, region-aware solar payback calculator with incentives, financing, and year-by-year savings. Works for all 50 US states using 2026 benchmark costs, tariffs, and federal/state incentives. No signup.
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Your Results
📋Calculation Summary
💵Financing Comparison
Cash
MAX ROI- Payback: 8.7 yrs
- Total 25-yr savings: $51,804.17
Loan
POPULAR- Monthly: $143.30
- Interest: $5,436.41
- Payback: 11.0 yrs
Lease
LOW RISK- Monthly: $90.14
- Net annual savings: $270.42
PPA
LOW RISK- Monthly: $84.51
- Net annual savings: $338.03
📊Break-Even Analysis
📈Solar ROI vs Stock Market 2026
Is solar a better investment than S&P 500? Compare the internal rate of return (IRR) of residential solar against traditional stock market investments.
Investment in S&P 500
Taxable brokerage account
Investment in Solar
Residential solar with tax advantages
Solar vs S&P 500 (Post-Tax)
Your Results Are Ready
Next Steps: Get Competitive Quotes from Installers
Pro tip: Bring this calculation to installer meetings. Most can beat these projections with equipment efficiency upgrades or additional state incentives.
Benchmark Comparison
See how your results compare to regional averages for Georgia, USA
Data Source: Benchmarks based on NREL and EnergySage 2025 regional data
Year-by-year projection (first 5 years + milestones)
Visual trend
Green shows how cumulative savings climb; blue shows annual savings taper gently with degradation. Hover over the table to see exact values.
💡 Share these reports with solar installers to compare their quotes against your calculations
💡Key Takeaways: Why Solar ROI Calculations Matter
Understanding your payback period and 25-year savings helps you budget effectively and make informed financing decisions.
Accurate calculations ensure you maximize federal and state incentives, which can reduce system costs by 30-50%.
Solar panels typically generate positive returns for 20-30 years, providing energy security and property value appreciation.
Expert Insights: 2026 Tax Laws and Solar Investment Strategy
The 2026 tax landscape presents significant opportunities for solar investors, with the federal Investment Tax Credit (ITC) remaining at a robust 30% through 2032. This incentive structure, combined with state-level rebates and net metering policies, creates an optimal environment for residential and commercial solar adoption. Understanding these tax implications is crucial for maximizing your return on investment and making informed financial decisions.
The 30% federal ITC applies to the total system cost, including equipment, installation, and certain associated expenses. This credit directly reduces your federal tax liability dollar-for-dollar, meaning a $30,000 solar installation qualifies for a $9,000 tax credit. Importantly, if your credit exceeds your tax liability in the installation year, you can carry forward the unused portion to future tax years. This provision ensures that even if you're in a lower tax bracket initially, you can still fully benefit from the incentive over time.
Beyond federal incentives, many states offer additional rebates, tax credits, or performance-based incentives that can further reduce your net system cost. Some states provide upfront rebates that lower your initial investment, while others offer production-based incentives that reward you for the electricity your system generates. Additionally, net metering policies allow you to sell excess solar generation back to the utility at retail rates, effectively using the grid as a battery and maximizing the value of every kilowatt-hour your panels produce.
The 2026 tax code also includes provisions that benefit solar investors through depreciation benefits for commercial installations and potential property tax exemptions in certain jurisdictions. Furthermore, as electricity rates continue to rise—typically increasing 3-5% annually—your solar investment becomes more valuable over time. This rate escalation, combined with the long-term nature of solar panels (which typically maintain 80% efficiency after 25 years), means your ROI improves year-over-year even as your panels gradually degrade.
Strategically timing your solar installation to align with tax planning can optimize your overall financial benefit. For example, if you anticipate higher income in future years, you might accelerate your installation to claim the credit in a higher tax bracket year. Alternatively, if you're planning major renovations, bundling solar with other home improvements can create synergies in both financing and installation costs. Ultimately, the combination of federal incentives, state programs, rising utility rates, and long-term energy production makes solar a compelling investment in 2026, with typical payback periods of 5-8 years and 25-year returns often exceeding 200% of the initial investment.
Why Solar ROI Calculation Is Critical (Beyond Simple Payback)
Simple payback only tells you when cumulative savings equal upfront cost. True ROI accounts for incentives, financing, degradation, export credit, and maintenance. A 5-year payback cash system can outperform a 3-year payback financed system once interest costs are included. This calculator shows both payback and ROI so you understand the full picture.
Incentives Transform ROI
30% US ITC can cut payback by 2-3 years. Example: $25,000 system → $17,500 after ITC → payback improves from 9.6 to 6.7 years.
Net Metering Matters
With retail credits, savings may be $2,600/year; without, only ~$1,700/year. That's a 30-40% swing in ROI.
Degradation is Real
Panels lose ~0.5-0.8% per year. Year 25 output is ~80-88% of year 1. This calculator applies degradation to long-horizon savings.
Financing Impact
Cash ROI can be 14-18% annually; a 5% loan may extend payback to 8-9 years but enables $0-down adoption.
Regional Variation
Sunny, high-tariff regions (CA, HI, AZ, NJ) see 3-6 year paybacks; low-tariff regions (FL, WA) trend 8-10 years but still strong over 25 years.
Hidden Costs
Roof work, permitting, insurance, and maintenance affect true cost. Budget $100-200/year O&M and $2-5k inverter replacement around year 15-20.
How Solar ROI Is Calculated — Complete Breakdown
kW × peak sun hours × 365 × system efficiency × orientation/shade factors.
Example: 8 kW × 5.5 × 365 × 0.9 = 14,472 kWh/year
generation × tariff. With net metering: retail rate. Without: discounted export value (assumed 65%).
each year savings = prior year × (1 - degradation rate). The tool uses your input (0.5-0.8% default).
subtract ITC/subsidy from cost. US: 30% ITC + state rebates. India: 40-50% residential subsidies plus GST considerations.
effective cost ÷ first-year savings. Break-even occurs when cumulative savings ≥ effective cost.
annual savings ÷ effective cost. 14-18% is typical in high-rate regions.
loans subtract annual payments; leases/PPA compare discounted $/kWh vs tariff.
sums degraded savings for full life, showing total savings and environmental offsets.
Solar Technology Types & ROI Impact
Monocrystalline (18-22% efficiency) offers highest output per sq. ft. Polycrystalline (15-17%) reduces cost with similar payback in moderate climates. Thin-film excels in heat with lowest $/W but needs more roof area. Bifacial yields 10-30% bonus when ground-mounted with albedo. BIPV prioritizes aesthetics with longer payback.
| Technology | Efficiency | Cost/W | Annual Savings (8 kW) | Payback | Best Use |
|---|---|---|---|---|---|
| Monocrystalline | 18-22% | $15-18 | $2,610 | ~6.5 yrs (after ITC) | Limited roof, hot climates |
| Polycrystalline | 15-17% | $12-15 | $2,520 | ~6.1 yrs | Budget, moderate climates |
| Thin-film | 10-14% | $8-12 | $2,240 | ~6.2 yrs (10 kW) | Hot climates, large roofs |
| Bifacial | 18-23% + bonus | $18-25 | $3,132 | ~6.1 yrs | Ground/commercial |
| BIPV | 12-18% | $20-30 | $2,340 | ~8.8 yrs | Aesthetic priority |
💡 Scroll horizontally to see all columns on mobile devices. Green = fast payback, Orange = longer payback
Federal, State, and Local Incentives (US)
US homeowners get 30% ITC through 2032. States like NJ (SRECs), NY (NY-Sun), MA (performance-based), and MD rebates further cut cost. Property and sales tax exemptions apply in many states. India offers 40-50% rooftop subsidies (state-dependent) plus net metering; commercial systems benefit from accelerated depreciation.
Federal ITC
30% of total system cost (equipment + labor). Dollar-for-dollar tax credit.
State Examples
NJ SRECs can add $2-3k/year; NY-Sun ~$1.25/W; CA SOMAH for multifamily up to ~$1-2/W.
Net Metering Rules
Retail in many states; NEM 3.0 export credit in CA; DISCOM caps in India.
Six Complete Solar ROI Scenarios
San Diego, CA
Type: Cash, 8 kW
Cost: $20.7k → $12.5k after incentives
Generation: ~14,600 kWh/yr
Annual Savings: $2,634/yr
Austin, TX
Type: Loan, 6 kW
Cost: $13.9k → $9.7k after ITC
Loan: 7 yrs @5.5%
Annual Savings: ~$1,070/yr
New York, NY
Type: Lease, 10 kW
Cost: Zero down
Lease: $180/mo
Gross Savings: ~$2,900/yr
Florida Panhandle
Type: Cash, 3 kW (low tariff)
Cost: $7.8k → $5.46k after ITC
Annual Savings: ~$610/yr
Dallas, TX Commercial
Type: PPA, 50 kW
Cost: Zero down
PPA Rate: $0.09/kWh vs $0.105 grid
Annual Savings: ~$4.8k
Regional Solar ROI Benchmarks (Based on Provided Data)
Benchmarks below use 2025 costs, tariffs, sun hours, and incentives from solar-data.json. Values are illustrative; utility programs may vary.
US States (sample)
| State | Cost/W | Tariff (res) | Sun hours | Incentives | Typical Payback |
|---|---|---|---|---|---|
| Alabama | $2.55 | $0.14 | 4.8 | 30.0% | 40.4 yrs |
| Alaska | $3.40 | $0.22 | 3.3 | 30.0% | 74.8 yrs |
| Arizona | $2.45 | $0.14 | 6.2 | 30.0% | 24.6 yrs |
| Arkansas | $2.60 | $0.12 | 4.7 | 30.0% | 52.0 yrs |
| California | $2.75 | $0.29 | 5.5 | 30.0% | 16.5 yrs |
| Colorado | $2.65 | $0.16 | 5.5 | 30.0% | 30.4 yrs |
| Connecticut | $3.20 | $0.26 | 4.4 | 36.3% | 30.5 yrs |
| Delaware | $2.90 | $0.16 | 4.6 | 33.4% | 44.9 yrs |
| Florida | $2.35 | $0.15 | 5.2 | 30.0% | 30.4 yrs |
| Georgia | $2.55 | $0.14 | 4.9 | 30.0% | 39.6 yrs |
| Hawaii | $3.30 | $0.40 | 5.5 | 30.0% | 13.7 yrs |
| Idaho | $2.50 | $0.11 | 4.7 | 30.0% | 54.6 yrs |
| Illinois | $3.00 | $0.16 | 4.4 | 38.3% | 45.0 yrs |
| Indiana | $2.75 | $0.14 | 4.3 | 30.0% | 58.4 yrs |
| Iowa | $2.70 | $0.13 | 4.6 | 30.0% | 54.1 yrs |
| Kansas | $2.65 | $0.13 | 4.9 | 30.0% | 46.9 yrs |
| Kentucky | $2.70 | $0.12 | 4.5 | 30.0% | 59.9 yrs |
| Louisiana | $2.55 | $0.12 | 4.9 | 30.0% | 46.2 yrs |
| Maine | $3.15 | $0.24 | 4.1 | 36.3% | 37.2 yrs |
| Maryland | $2.95 | $0.18 | 4.6 | 33.4% | 40.6 yrs |
| Massachusetts | $3.30 | $0.25 | 4.2 | 36.1% | 36.7 yrs |
| Michigan | $2.85 | $0.17 | 4.2 | 30.0% | 51.0 yrs |
| Minnesota | $2.95 | $0.15 | 4.5 | 33.4% | 49.8 yrs |
| Mississippi | $2.60 | $0.12 | 4.9 | 30.0% | 47.1 yrs |
| Missouri | $2.75 | $0.13 | 4.6 | 31.8% | 53.7 yrs |
| Montana | $2.85 | $0.13 | 4.7 | 30.0% | 52.6 yrs |
| Nebraska | $2.70 | $0.12 | 4.8 | 30.0% | 52.9 yrs |
| Nevada | $2.40 | $0.13 | 6.3 | 30.0% | 24.4 yrs |
| New Hampshire | $3.20 | $0.24 | 4.2 | 36.3% | 37.0 yrs |
| New Jersey | $3.10 | $0.22 | 4.6 | 36.5% | 33.3 yrs |
| New Mexico | $2.45 | $0.14 | 6.0 | 32.0% | 24.7 yrs |
| New York | $3.10 | $0.23 | 4.0 | 36.5% | 39.1 yrs |
| North Carolina | $2.60 | $0.13 | 5.0 | 31.9% | 41.4 yrs |
| North Dakota | $2.85 | $0.12 | 4.5 | 30.0% | 63.3 yrs |
| Ohio | $2.85 | $0.15 | 4.3 | 30.0% | 56.5 yrs |
| Oklahoma | $2.55 | $0.12 | 5.1 | 30.0% | 42.1 yrs |
| Oregon | $2.85 | $0.16 | 4.6 | 31.8% | 45.3 yrs |
| Pennsylvania | $2.95 | $0.16 | 4.5 | 31.7% | 47.9 yrs |
| Rhode Island | $3.30 | $0.25 | 4.2 | 36.1% | 36.7 yrs |
| South Carolina | $2.65 | $0.14 | 5.1 | 31.9% | 36.5 yrs |
| South Dakota | $2.80 | $0.12 | 4.9 | 30.0% | 53.7 yrs |
| Tennessee | $2.65 | $0.12 | 4.8 | 30.0% | 51.9 yrs |
| Texas | $2.30 | $0.15 | 5.3 | 30.0% | 29.2 yrs |
| Utah | $2.45 | $0.12 | 5.8 | 32.0% | 31.2 yrs |
| Vermont | $3.20 | $0.24 | 4.1 | 34.7% | 38.8 yrs |
| Virginia | $2.85 | $0.14 | 4.7 | 31.8% | 47.6 yrs |
| Washington | $2.85 | $0.12 | 4.5 | 31.8% | 61.7 yrs |
| West Virginia | $2.80 | $0.13 | 4.6 | 30.0% | 56.1 yrs |
| Wisconsin | $2.95 | $0.15 | 4.2 | 31.7% | 58.4 yrs |
| Wyoming | $2.80 | $0.12 | 5.1 | 30.0% | 46.2 yrs |
💡 Scroll horizontally to see all columns on mobile devices
20+ Solar ROI FAQs (Quick Answers)
Frequently Asked Questions
Solar Payback Period by State: Where Does Your Roof Rank?
Payback period varies dramatically by state depending on three factors: average electricity rates, annual sun hours, and state-specific incentives. In high-tariff states like California and Hawaii, your solar investment breaks even in 4-7 years. In low-tariff states like Louisiana and Mississippi, expect 8-12 years. Use the calculator above with your state to see your exact payback timeline.
Fast Payback States (4-7 years): California, Hawaii, New Jersey, Massachusetts, Rhode Island, New York, Connecticut, Maryland (high rates + incentives)
Moderate Payback (8-10 years): Texas, Florida, Arizona, Nevada, New Mexico, Colorado (good sun hours compensate for moderate rates)
Longer Payback (11-14 years): Louisiana, Mississippi, Alabama, Kentucky, Arkansas (lower electricity rates = longer timeline)
The good news: Even with longer payback periods, solar still delivers $20,000+ in lifetime savings over 25 years. The calculator automatically detects your state and applies accurate payback estimates.
Solar Loan vs Cash vs Lease vs PPA: Which Financing Path Saves the Most?
Your financing choice determines your total savings as much as your region does. A $25,000 system can result in $30,000 in 25-year savings (cash), $22,000 (loan with interest), or $5,000 (lease). Each option serves different goals. Cash buyers maximize ROI but require upfront capital. Loan buyers spread costs over time but pay interest. Lease and PPA buyers avoid upfront costs but sacrifice long-term savings.
💰 Cash Purchase
Best for: Homeowners with capital + planning to stay 10+ years
25-yr savings: $30,000+ (highest ROI)
Incentive: 30% ITC reduces cost by $7,500
Trade-off: Requires $15,000-25,000 upfront
📊 Loan (5-7 year term)
Best for: Homeowners wanting to spread cost + keep tax credit
Monthly payment: ~$200-$350 (depends on rate/term)
25-yr savings: $22,000-$26,000
Trade-off: Interest reduces ROI vs cash, but enables $0 down
🏠 Lease ($80-150/month)
Best for: Renters or those wanting zero responsibility
Monthly payment: Fixed $80-150 (locked in)
25-yr savings: $5,000-$10,000
Trade-off: Installer keeps tax credit + production incentives
⚡ PPA (Power Purchase Agreement)
Best for: Those wanting lowest rates + zero capex
Your cost: Fixed $/kWh (usually 5-15% below grid rate)
25-yr savings: $8,000-$12,000
Trade-off: No ITC, no ownership, limited upgrade options
Bottom line: The calculator above shows exact monthly payments and 25-year totals for all four options. Use it to compare cash vs loan vs lease vs PPA for your exact situation, then request quotes from 2-3 installers.
Federal 30% Solar Tax Credit (ITC) 2025: How Much Can You Really Save?
The 30% federal investment tax credit (ITC) is the single biggest incentive for residential solar. If your solar system costs $20,000, the federal government reimburses you $6,000 via tax credit. This credit is available through 2032 (scheduled to decline after). Understanding how it works helps you maximize your savings and understand your true cost of ownership.
How the 30% ITC Works
- System installed and operating in 2025: $20,000 total cost
- 30% federal tax credit applies: $20,000 × 0.30 = $6,000 tax credit
- On your 2025 tax return, you claim $6,000 credit
- If you owe $8,000 in taxes: credit reduces it to $2,000 owed
- If you owe $4,000 in taxes: credit exceeds this, excess carries forward to 2026
- Your effective cost: $20,000 - $6,000 = $14,000 (not $20,000)
ITC + State Incentives = Bigger Savings
Many states layer additional incentives on top of the 30% ITC. Example: New Jersey offers SRECs (Solar Renewable Energy Certificates) worth $2-4K extra per year. Combined with 30% ITC, your $20K system becomes $14K upfront + $3K/year SREC revenue = breakeven in 3-4 years instead of 8 years.
The calculator automatically applies your state's ITC and available incentives. Enter your state and system cost to see your exact tax benefit.
Is Solar Worth It in Low-Tariff States? Florida, Louisiana, Washington ROI Analysis
If you live in Florida, Louisiana, or Washington—states with below-average electricity rates—you might think solar isn't worth it. This is partially true: payback takes 10-14 years instead of 5-7 years. But over 25 years, solar still delivers $20,000+ in total savings. The 30% federal ITC changes the math dramatically, making even low-tariff solar financially attractive.
Florida Example: 8 kW system, $0.15/kWh tariff
| Metric | With 30% ITC | Without ITC |
|---|---|---|
| System cost | $13,930 (after credit) | $19,900 |
| Annual savings Year 1 | $1,570 | $1,570 |
| Payback period | 8.9 years | 12.7 years |
| 25-year savings | $32,140 | $24,280 |
The verdict: Even in low-tariff Florida, solar breaks even in under 9 yearsand delivers $32K in savings over 25 years—a strong investment. Use the calculator to see YOUR exact ROI for your tariff and region.
How to Use This Solar ROI Calculator (5-Minute Guide)
Step 1: Select Your State
Choose your US state or India state. The calculator auto-fills your region's electricity rate, sun hours, and available incentives (30% ITC for US, state subsidies for India).
Step 2: Enter Your Monthly Bill
Find your electricity bill and enter your monthly average. This tells the calculator how much you currently spend, so it can estimate how much you'll save with solar.
Step 3: Adjust System Size & Cost
If you have quotes, enter your system size (kW) and total cost. Otherwise, the calculator suggests an optimal size to cover ~90% of your bill based on your region's sun hours.
Step 4: Choose Financing
Select Cash, Loan, Lease, or PPA. For loans, enter your interest rate (typical: 4-7%) and term (typical: 5-7 years). See which option maximizes YOUR savings.
Step 5: Review Results
See your payback period, annual savings, ROI%, and 25-year total. The year-by-year table shows exactly how much you'll save each year, accounting for panel degradation.
Step 6: Request Quotes
Take a screenshot of your results and share with solar installers. Get 2-3 quotes to lock in 2025 pricing. Compare their offers against your calculator results.
How to Use This Calculator (Step-by-Step)
- Pick your region (US or India state) to auto-fill tariffs, sun hours, and incentives.
- Enter monthly bill, system size, and cost if you have quotes. Adjust tariff or incentives if custom.
- Toggle net metering to see impact of export credit policies.
- Select financing: cash, loan (add rate/term), lease, or PPA to compare monthly impact.
- Review results: payback, ROI, break-even, 25-year savings, and environmental offsets.
- Use year-by-year table and comparison cards to decide the best path (cash vs loan vs lease vs PPA).
- Export or screenshot results for installer conversations; request quotes to validate assumptions.