Solar Payback Calculator
Solar sales reps quote a payback number before they have seen your bill — this calculator recomputes it from the things that actually move it: how much you pay per kilowatt-hour, how much sun your state gets, and what your utility credits for exported power. It prices a system at the current national $2.60 per watt, applies the incentives you actually qualify for (the 30% federal residential credit ended in 2025), and shows payback plus 25-year net savings. If the low case still clears your hurdle rate, solar is a rare home upgrade that pays you back.
Published Cost data last reviewed Re-checked quarterly
Before taxes and fixed fees is fine — this is the single biggest driver of solar value.
Rate ÷ kWh on your bill. National residential average ≈ 18¢/kWh (EIA, mid-2026); HI and CA run far higher.
Enter 0 and the tool sizes the system to cover your offset target; enter a quote's size to test it.
Oversizing past 100% only pays where export credits are strong.
Check your utility's current policy — this varies more within states than between them.
Per the IRS, 25D is not available for property placed in service after 2025; leases/PPAs keep the 48E credit with the lessor.
Performance-based incentives and rebates, in dollars per watt (e.g. $0.25/W). Leave 0 if none.
Costs are adjusted for labor and material rates in your state.
Low
$41,820
Typical
$61,260
High
$91,960
Prices adjusted for Texaslabor & material costs.
| Cost item | Low | High |
|---|---|---|
| Materials | ||
| Equipment & panels (no incentives applied) | -$10,190 | -$7,970 |
| Labor | ||
| Installation, permitting & interconnection (no incentives applied) | -$12,450 | -$9,740 |
| Other costs | ||
| Electric-bill savings, years 1–25 (3%/yr rate escalation, 0.5%/yr degradation) | $65,460 | $110,460 |
| Inverter replacement, ≈ year 13 (one swap) | -$1,000 | -$790 |
| Estimated total | $41,820 | $91,960 |
What this estimate assumes
- System auto-sized to 8.3 kW from your bill at 5.2 peak sun hours/day (your state's average) × 365 days × 85% system efficiency ≈ 13,333 kWh of nameplate production in year 1.
- Offsetting 100% of your ≈ 13,333 kWh/yr usage; annual savings are capped at your actual $2,400/yr bill — extra exports only help where full net metering credits roll over.
- About 45% of output is self-consumed at your full 18.0¢/kWh rate; the other 55% is exported and credited at full retail rate. A battery shifts this split but is not priced here.
- Simple payback ≈ about 8.2 years — net cost $19,683 ÷ year-1 savings $2,400, undiscounted. 25-year net savings = bill savings − net system cost − one inverter swap.
- Low/typical/high: bill savings carry the site-wide 80%/135% spread (rate escalation and production are the real unknowns); system costs carry a tighter 90%/115% spread, because per-watt quotes for the same roof cluster narrowly. Equipment scales with your state's materials index, installation and the inverter swap with its labor index; incentives and production are not rescaled.
- No incentives applied — the 30% residential credit (25D) ended Dec 31, 2025 per the IRS; add your state/utility rebate with the $/W field if you have one.
- Excludes battery storage, roof repair or replacement before install, main panel upgrades, and ground mounts.
Typical cost ranges
| Project | Low | Typical | High |
|---|---|---|---|
| $100/mo electric bill (about 9.5 years payback) | $19,010 | $28,980 | $44,490 |
| $150/mo electric bill (about 9.5 years payback) | $28,520 | $43,470 | $66,740 |
| $200/mo electric bill (about 9.5 years payback) | $38,020 | $57,960 | $88,990 |
| $300/mo electric bill (about 9.5 years payback) | $57,030 | $86,950 | $133,480 |
| $400/mo electric bill (about 9.5 years payback) | $76,040 | $115,930 | $177,970 |
| Project | Low | Typical | High |
|---|---|---|---|
| Arizona — 6.5 sun hrs/day (about 7.1 years payback) | $44,860 | $63,910 | $94,340 |
| California — 5.6 sun hrs/day (about 10.0 years payback) | $36,550 | $56,690 | $87,840 |
| Texas — 5.2 sun hrs/day (about 8.2 years payback) | $41,820 | $61,260 | $91,960 |
| Georgia — 5 sun hrs/day (about 8.8 years payback) | $40,140 | $59,810 | $90,650 |
| Ohio — 4 sun hrs/day (about 11.5 years payback) | $32,280 | $52,970 | $84,490 |
| Washington — 3.6 sun hrs/day (about 15.3 years payback) | $21,140 | $43,280 | $75,770 |
| Project | Low | Typical | High |
|---|---|---|---|
| 5 kW system (installed, before incentives) | $11,700 | $13,000 | $14,950 |
| 8 kW system (installed, before incentives) | $18,720 | $20,800 | $23,920 |
| 10 kW system (installed, before incentives) | $23,400 | $26,000 | $29,900 |
| 12 kW system (installed, before incentives) | $28,080 | $31,200 | $35,880 |
| 15 kW system (installed, before incentives) | $35,100 | $39,000 | $44,850 |
Frequently asked questions
Did the 30% federal solar tax credit end?
For systems you buy, yes: the IRS states the Residential Clean Energy Credit "is not available for any property placed in service after December 31, 2025," so a 2026 cash or loan purchase gets $0 federal (that is this calculator's default). Third-party-owned leases and PPAs still carry the Section 48E credit — but the leasing company claims it, not you.
Are solar panels still worth it without the federal credit?
Usually, if your rates are average or higher. Installed prices are down to about $2.60/W — roughly 22% cheaper than a decade ago — and utility rates rose about 4.5% in the past year, so EnergySage still pegs typical savings at $41,000–$155,000 over 25 years with about a 10-year average payback. On this calculator's Texas defaults, dropping the 30% credit stretches payback from about 5.7 to 8.2 years.
How many peak sun hours does my state get?
Most states average 4–6 peak sun hours per day — the Southwest leads (Arizona ≈ 6.5, Nevada ≈ 6.3, New Mexico ≈ 6.4) while the Pacific Northwest and Great Lakes sit near 3.5–4. Production ≈ system kW × sun hours × 365 × 85% efficiency, per NREL-based state tables; this calculator applies your state's figure automatically. Treat it as a clear-roof, well-oriented average: heavy shading, a flat or north-facing tilt, or a roof plan full of dormers can knock real output 10–25% below it, so shrink the offset or system-size input rather than trusting nameplate math on a compromised roof.
What size solar system do I need?
Divide your annual kWh by (your state's sun hours × 365 × 0.85). A $200/mo bill at the 18¢ national average is about 13,333 kWh/yr, which sizes to roughly 8.3 kW in Texas at 5.2 sun hours/day. Leave the size field at 0 and this calculator does the sizing for you.
How much does net metering change the numbers?
A lot, because about 55% of a no-battery system's output gets exported. Full retail net metering values every exported kWh like one you used; avoided-cost programs (California's NEM 3.0 style) pay roughly half, stretching payback by several years; states with no export credit leave you only the self-consumed share — that is why this tool has the policy toggle.
Do panels need maintenance or replacement over 25 years?
No routine maintenance beyond occasional cleaning; output degrades about 0.5% per year. The strings inverter typically needs one replacement in years 10–15 at roughly $0.10–$0.20/W — this model subtracts one $0.12/W swap around year 13. Panels themselves carry 25-year output warranties.
Will I still have an electric bill after going solar?
Yes — utilities keep charging fixed customer charges, minimum bills and non-bypassable fees that panels can't offset, even at a 100% offset target. That ceiling is built into this model: annual savings never exceed your actual bill, no matter how much the array produces. It's also why solar struggles on small bills — a $50/month bill leaves a system almost nothing to save, whatever the sun hours — and why oversizing past your usage only pays where export credits roll over.
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Open calculatorHow this estimate is calculated
These notes are written for this tool alone: where its base prices come from, how the low–high window is derived, and what the figure deliberately leaves out.
- Sizing: annual usage = monthly bill × 12 ÷ your rate; a system at 0 kW is auto-sized so production (kW × state sun hours × 365 × 85% efficiency) meets your offset target — the same math installers run in proposal software.
- Cost base: $2.60/W installed before incentives, EnergySage's 2026 national marketplace average (~$31,135 for the average ~12 kW quote), split 45% equipment / 55% installation; equipment scales with the state materials multiplier, installation and the year-13 inverter swap ($0.12/W) with the labor multiplier.
- Bill value: 45% of output is self-consumed at your full retail rate; the other 55% is exported and credited at the net-metering factor (full retail, ~50% avoided-cost, or zero). Annual savings never exceed your actual bill.
- Lifecycle: 25 years of savings at 3%/yr rate escalation against 0.5%/yr panel degradation, one inverter replacement in year 13, minus the incentive-adjusted system cost. Simple (undiscounted) payback = net cost ÷ year-1 savings.
- Incentives: the 30% Residential Clean Energy Credit ended for property placed in service after Dec 31, 2025 (IRS); the form keeps the 30% option only for systems commissioned by that date, plus a $/W field for state/utility rebates, capped together at 60% of system cost.
- Ranges: savings use the site-wide 80%/135% spread (production and future rates are the uncertainty), costs use a tighter 90%/115% spread (per-watt quotes cluster in a commodity market).
- Edge case, by design: a manually entered system far larger than the bill can absorb (e.g. 30 kW against a $30/month bill) produces a negative 25-year net — the tool reports the loss honestly rather than clamping it to zero; low < typical < high ordering and finite values hold at every input, and the defaults stay positive in all states. Excludes batteries, roof work, main panel upgrades, ground mounts, and utility interconnection studies that run long; state sun hours are annual averages, so a shaded or flat-tilted roof produces 10–25% less.
Sources
Every cost constant above traces to the publishers listed here — the editorial gate requires at least two independent sources per calculator, each with the month we accessed it. FixTally is not affiliated with any of them.
- EnergySage — Solar panel cost in 2026 ($2.60/W installed average; ~12 kW / $31,135 typical quote; $41,000–$155,000 saved over 25 years; ~10-year average payback) — accessed 2026-09
- IRS — Residential Clean Energy Credit (30% under 25D; "not available for any property placed in service after December 31, 2025") — accessed 2026-09
- U.S. Energy Information Administration — Electric Power Monthly / Electricity Monthly Update (total average retail price 14.48¢/kWh in June 2026, +4.5% YoY; residential ≈ 18¢/kWh) — accessed 2026-09
- Unbound Solar — Peak Sun Hours by State: Map, Table & Calculator (NREL-based state averages; most states 4–6 h/day, Southwest highest) — accessed 2026-09
Maintained by the FixTally Editorial Team — each quarter we re-check the cited prices, re-run every calculator’s math, and refresh the review dates shown on these pages.
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