Is Solar Worth It in 2026 Without the Federal Tax Credit?

Solar is still worth it in 2026 for many homeowners, but the payback is longer and it depends on your electricity rate. An 8 kW system costing about $21,000 and saving $2,200 a year pays itself back in about 9.5 years with no federal credit. At a cheap power rate of 12 cents per kWh, the same system takes close to 16 years.

The 30% federal credit for buying a system ended on December 31, 2025, according to SolarReviews. Losing it lengthens payback by a few years. Solar still works where power is expensive.

A thread in r/solar asks whether people would still go solar with an 11-year payback. This guide gives you the arithmetic to answer that for your own roof.

The payback formula

Payback is a simple division.

Payback in years = system cost after incentives / savings per year

Savings per year = kWh your panels make x what you pay per kWh

Jouleio, a solar cost site that updated its guide in May 2026, uses an 8 kW system as its example. It costs $19,000 to $23,000 before state incentives and makes about 11,000 kWh a year. I’ll use the middle, $21,000.

At three electricity prices:

Rate	Yearly savings (11,000 kWh x rate)	Payback ($21,000 / savings)
12 cents	$1,320	15.9 years
20 cents	$2,200	9.5 years
30 cents	$3,300	6.4 years

Now add back the credit that is gone. Thirty percent of $21,000 is $6,300, which would have cut the cost to $14,700. At 20 cents that is $14,700 / $2,200, or 6.7 years. So losing the credit added about 2.8 years in this example.

This is a simple payback. It ignores financing interest, panel wear, and any rise in power prices. SolarReviews assumes rates climb about 5 percent a year, while noting the historical average is about 3 percent. A forecast of rising rates shortens payback, but nobody can promise it.

What the lost credit did to payback times

EnergySage published state estimates in July 2025 with and without the credit. It expects payback to stretch about 43 percent longer without it. Here is a sample:

State	With credit	Without credit
Washington D.C.	3.9 years	5.6 years
Illinois	4.1 years	5.8 years
California	5.1 years	7.3 years
Texas	6.2 years	8.9 years
New York	8.1 years	11.6 years
Florida	10.9 years	15.5 years
Georgia	12.3 years	17.6 years
Utah	19.7 years	28.1 years

The spread is huge. Illinois and Utah are both in the U.S., and one pays back in under six years while the other takes close to 28. EnergySage’s page does not explain its method, so treat these as a rough guide to where your state sits.

Your electricity rate is the biggest lever

Jouleio sorts states by what you pay per kWh. Its 2026 payback ranges without the credit:

• Above 20 cents: 7 to 12 years, a strong yes
• 14 to 20 cents: 12 to 17 years, likely yes
• 10 to 14 cents: 17 to 22 years, maybe
• Below 10 cents: 22 to 30 years or more, probably not

Look at your own bill. Divide the total charge by the kWh used to get your real rate, including delivery fees. If you are below 12 cents, solar needs a strong reason beyond savings.

Jouleio also lists yearly savings for the 8 kW model by state. Hawaii is about $4,800, California about $3,960, Massachusetts about $3,600, New York about $2,880, Texas about $1,680, and Louisiana about $1,080. Those come from the page’s own tables, and they match the rate pattern.

Net metering can matter more than the credit

Net metering decides what you get paid for power you send back to the grid. Under full net metering, exports earn the retail rate. Under net billing, they earn far less.

Jouleio’s 8 kW model shows the gap:

Policy	Payback	25-year net savings
Full retail net metering	9.7 years	$35,350
Net billing at $0.06 per kWh export	17.2 years	$10,150

California’s NEM 3.0 is the best-known example of net billing. Jouleio puts its export credit at about $0.05 to $0.08 per kWh against retail rates of $0.30 to $0.55. A 9 kW system exporting 4,500 kWh a year earned about $1,125 to $1,800 under the older NEM 2.0 and about $225 to $360 under NEM 3.0. In those states, a battery that shifts midday solar to evening use matters more. Jouleio estimates a 13.5 kWh battery adds $600 to $1,200 a year in California. Run the numbers in the Solar Battery Calculator.

Jouleio lists these as having full retail net metering: New Jersey, Massachusetts, New York, Maryland, Connecticut, Ohio, and about 20 others. It lists Arizona, Nevada, and several Southeast utilities as reduced-rate. Texas, Georgia, Alabama, and South Carolina have no statewide mandate. Rules differ by utility and by the date you connect, so read your utility’s current tariff.

State credits still help

The federal credit is gone. Some state money is not. SolarReviews lists these still active in 2026:

State	Tax credit
New York	25%, up to $5,000
Massachusetts	15%, up to $1,000
Arizona	25%, up to $1,000
Hawaii	35%, up to $5,000
New Mexico	30%, up to $15,000
South Carolina	25%, up to $3,500 a year

Some states also offer rebates and tax exemptions. Delaware lists a grant of $0.70 per watt up to $6,000. Rhode Island lists up to $7,000, which includes a battery rebate. Many states exempt solar from property tax. SolarReviews tells readers to confirm current terms with their state or utility, which is good advice. Programs change and some run out of funding.

Worked example: a New York homeowner with a $21,000 system gets 25 percent, which is $5,250, but the credit caps at $5,000. That leaves $16,000. At 20 cents the payback is $16,000 / $2,200, or 7.3 years.

What about leasing?

Section 48E still gives a credit to third-party owners of leased or power-purchase systems. SolarReviews says it ends December 31, 2027, down from 2032, and cites a projection from Ohm Analytics that residential installs will fall about 25 percent in 2026. It cites typical lease prices of about $130 to $200 a month in 2026, depending on system size and sun.

A lease can lower your bill from day one with no upfront cost. You do not own the system, so you give up the long-run savings. The Solar Lease vs Buy Calculator lets you compare the two on your own numbers.

How to decide

Work through these in order.

1. Find your rate. Total bill divided by kWh used.
2. Find out how your utility pays for exports. Full retail net metering is far better than net billing.
3. Get at least three quotes. Jouleio puts 2026 installed cost at $2.50 to $3.20 per watt and its 8 kW example at $19,000 to $23,000. A quote well above that needs an explanation.
4. Subtract any state credit or rebate you qualify for.
5. Divide by your yearly savings.
6. Ask what happens if you sell the house in year 6. Buyers may or may not pay for the panels.

A fair way to read the result:

• Payback under 10 years is a clear yes if you plan to stay.
• Payback of 10 to 15 years works if you value a fixed energy cost and expect rates to rise.
• Payback over 17 years is hard to justify on money alone.

Use the Solar Panel Calculator to size the system for your usage, and the Electricity Cost Calculator to confirm what you pay now.

Limits of these numbers

Most solar cost sites are run by installers or lead generators. They have a reason to be hopeful. The payback tables above come from Jouleio and EnergySage, and their methods are only partly explained. Jouleio’s own page has a few table entries that do not match its simple payback division. Use the figures to see the shape of the problem, then get real quotes.

Sources

• EnergySage, Solar payback periods will extend 43% longer without the ITC
• SolarReviews, Are Solar Panels Worth It in 2026?
• SolarReviews, Solar Incentives by State
• Jouleio, Is Solar Worth It in 2026?
• Jouleio, Net Metering Explained