Ballpark Lab
Solar payback

Solar Payback & Savings (2026)

Tell us about your bill

$

Your typical power bill before solar.

Sets local install price, power rate, and sun hours.

Cash and loans own the system; lease/PPA don't.

Payback period
~9.3 yr
9.6 kW24 panels

Break-even around year 10, when cumulative bill savings cover your net cost.

25-year net savings
After the system pays for itself
+$57,445
Est. annual savings
Year 1, before rate hikes
$2,229
Gross system cost
Before any incentive
$23,620
Net cost
What you actually pay
$23,620
Covers
of your annual use
103%
Federal tax credit
25D expired Dec 2025
$0
Savings grow about 3.5%/yr as retail power prices climb — even after ~0.5%/yr of panel output loss. Faster rate hikes shorten payback; flat rates lengthen it. With 25D expired, cash and loan buyers now pay full price.
iA ballpark estimate for planning — not a final quote.

How solar payback works

Payback is the year your cumulative bill savings finally equal what you paid for the system, net of any state incentives. The catch is that yearly savings aren't constant: they grow as utility rates rise and shrink slightly as panels age. We model both year by year, then read off the year the running total crosses your net cost.

What changed in 2026: 25D expired

The 30% residential credit (Section 25D) ended on December 31, 2025. A system that effectively cost, say, $16,800 after the credit now costs its full $24,000 — typically adding three to five years to payback. Lease and PPA providers can still use the commercial credit (Section 48) and may pass part of it through as a lower rate, which is one reason third-party offers can look cheaper month-to-month even though you own nothing.

What drives your payback

  • Local install price ($/W) — the single biggest factor; varies widely by state and installer.
  • Your electricity rate and how fast it rises — higher and faster-rising rates pay solar back sooner.
  • Net-metering rules — NEM 3.0-style policies credit exported power below retail, stretching payback and adding the most uncertainty.
  • System size and offset — covering more of your usage saves more, but oversizing past what you use rarely pays under modern export rates.

Install prices and power rates current as of June 30, 2026.

Frequently asked questions

How is solar payback calculated?
Payback is the point where cumulative electricity-bill savings equal your net system cost (gross price minus any state incentives). Savings aren't flat: we grow them about 3.5% a year as retail power prices rise and shave roughly 0.5% a year for panel output degradation, then find the year the running total crosses your net cost.
Did the federal solar tax credit really expire?
Yes. The 30% residential clean-energy credit (Section 25D) ended on December 31, 2025 under the 2025 budget law. Cash and loan buyers in 2026 get $0 federal credit and pay the full system price, which adds a few years to a typical payback compared with 2025.
What's a typical solar payback in 2026?
It depends heavily on your state's install price, electricity rate, sun hours, and net-metering rules. In sunny, high-rate states with full net metering, paybacks often land in the 9-12 year range post-25D; in low-rate states or under NEM 3.0-style export rates they can stretch past 15 years. Use the calculator with your own bill for a real number.
Does a solar lease or PPA have a payback?
Not in the same way. With a lease or PPA you don't own the system and pay $0 upfront, so there's no cost to recover — you simply compare the monthly lease or per-kWh PPA payment against your old bill. The system owner claims the 30% commercial credit (Section 48) and may pass some of it through as a lower rate.
How do rising electricity prices change the result?
They're the biggest lever after price. Faster utility rate hikes make each kWh you self-generate worth more every year, pulling payback in and lifting 25-year savings. Flat or falling rates do the opposite. The calculator assumes a steady 3.5% annual escalation; if your utility raises rates faster, your real payback will be shorter.

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