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2026 Solar Payback Calculator
The 30% federal residential solar credit ended on December 31, 2025. This calculator models what solar actually pays back now — no federal credit, your real utility rate and export tariff, and an honest comparison between buying, financing, leasing, and a PPA.
Educational calculators — always consult a licensed professional before making financial decisions.
Most U.S. homes land between 6 and 10 kW.
This is the single biggest driver of 2026 solar economics.
Pay upfront, own the system, keep all savings.
Check the 'price to compare' or total bill ÷ kWh used on your utility statement.
National range is roughly $2.50–$3.50/W before incentives.
Roughly 1,100 in the Pacific Northwest, 1,300 average, 1,700+ in the Southwest.
100% = traditional net metering. Lower it if your state moved to a net-billing tariff.
Only applies if you own the system. Look yours up on DSIRE.
A fixed dollar rebate rather than a percentage. Owned systems only.
Only in states with an SREC market — NJ, MD, MA, DC, PA, OH, IL.
U.S. residential electricity has averaged roughly 2–4% a year long term.
Only used if you chose 'Solar loan' above.
Common terms are 10, 12, 15, 20, and 25 years.
Only used if you chose 'Lease' above.
Only used if you chose 'PPA' above. Compare against your retail rate.
Typically 0–3%. A 2.9% escalator compounds to roughly +77% over 20 years.
Payback period (no federal credit)
12.3 years
8 kW system · Buy with cash · 2026 rules
Solar vs. the grid
Over 25 years this system costs you $0.108 per kWh, against a starting utility rate of $0.17 per kWh rising 3% a year. On these assumptions the system beats grid power.
Federal credit status
There is no federal residential energy tax credit for 2026 work. The 30% solar and battery credit (IRC §25D) was terminated for expenditures made after December 31, 2025, and the efficiency credit covering heat pumps, insulation, windows, and doors (IRC §25C) was terminated for property placed in service after that same date — both by the One Big Beautiful Bill Act. State, utility, and local rebate programs are unaffected — look yours up on DSIRE. Educational only, not tax advice.
Buy with cash
You own the system outright, so you keep every dollar of bill savings, any SREC income, and the resale value the system adds to your home. With §25D terminated on 2025-12-31, there is no federal credit to offset the upfront cost — your payback now depends entirely on your utility rate, your state and utility incentives, and how much of your production is credited at retail.
Estimates reflect national averages and the assumptions you entered, for educational purposes only. Panel production, utility tariffs, and incentive programs vary by address and change frequently. Always get 2–3 quotes and confirm your utility's current net metering or net billing tariff before proceeding. This is not tax or investment advice — consult a licensed tax professional about your own situation.
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What you'll need
- ·A quote, or a system size in kW and price per watt
- ·Your electricity rate — total bill ÷ kWh used, not just the supply rate
- ·Whether your utility offers full net metering or net billing
- ·Any state or utility incentive you qualify for (look it up on DSIRE)
What you'll get
- ✓Payback period without a federal credit — The number that actually changed in 2026
- ✓Levelized cost per kWh — Compare your solar directly against your utility rate
- ✓25-year net position — Cumulative savings minus everything you pay
- ✓Own vs. lease vs. PPA — Same system, four ways of paying for it
What changed on January 1, 2026
The One Big Beautiful Bill Act, signed July 4, 2025, terminated the Residential Clean Energy Credit (IRC §25D) for expenditures after 2025-12-31. There is no phase-down and no partial 2026 credit — the residential federal credit is $0. The efficiency credit for heat pumps, insulation, windows and doors (§25C) ended on the same date. The EV charger credit (§30C) survives through June 30, 2026. Read the full status page →
How much longer does payback take now?
The 30% credit used to remove roughly a third of the upfront cost on day one. Losing it does not change your electricity savings at all — it changes how deep the hole is that those savings have to climb out of. As a rule of thumb, the same system that paid back in 9 years with the credit takes closer to 12–13 years without it, all else equal.
That is the average case. Your own answer depends far more on two things the national average hides: your retail electricity rate, and whether your utility still credits exports at full retail. Both are inputs above.
The three levers that still matter
- Your electricity rate. Solar is worth exactly what the power it displaces costs. At $0.30/kWh in California or Massachusetts, an 8 kW system offsets far more per year than the identical system in a $0.11/kWh market. This is the single biggest regional difference.
- Net metering vs. net billing. Full retail net metering credits every exported kilowatt-hour at the rate you pay. Net billing credits it at wholesale — often a quarter to a third as much. Because a home system exports a large share of midday production, this alone can move payback by several years.
- State and utility incentives. With the federal credit gone, these are the only incentives left. New York offers a 25% state credit capped at $5,000; South Carolina offers 25%; many states offer nothing. Look yours up on DSIRE by ZIP code before you assume.
Own, finance, lease, or PPA
A leased or PPA system never qualified for the §25D credit, because the credit required you to own the equipment. That matters in 2026 for a counterintuitive reason: the termination hurt buyers, not lease customers, so the gap between owning and not owning is narrower than it was. It is genuinely worth running all four.
- Cash. Lowest lifetime cost, highest upfront. You keep all savings, SRECs, and added home value.
- Solar loan. Check the total of payments, not the APR — low-rate solar loans usually carry a 15–30% dealer fee built into the price.
- Lease. Flat monthly payment regardless of production, so underperformance is your problem. Must be transferred or bought out when you sell.
- PPA. You pay per kWh produced. Check the year-20 rate after the escalator, not just year one.
How we calculate this
Everything runs in your browser — no inputs are sent anywhere. The model is deliberately transparent so you can check it:
- Federal credit: $0. Sourced from a single dated config file so every page on this site moves together when the law changes.
- Degradation: 0.5%/yr. The industry-standard assumption, consistent with a 25-year warranty at 80–85% of nameplate output.
- Export value: the share you mark as net-metered is credited at full retail; the remainder at 30% of retail, a common avoided-cost approximation.
- O&M: $12/kW/yr, which amortizes a mid-life inverter replacement rather than modeling it as a single lumpy cost.
- Horizon: 25 years, matching typical panel warranty length.
For a production estimate specific to your address rather than our regional default, run NREL's free PVWatts tool and enter the result in the “annual production per kW” field.
Related calculators
- Solar Panel Installation Cost Calculator — what a system costs before any incentive
- Solar Panel Size Calculator — how many kW your usage actually needs
- Solar Panel Savings Calculator — monthly, annual, and 25-year bill savings
- Federal Solar Tax Credit Calculator — check a 2022–2025 install, or a business §48E system
- 2026 Home Energy Tax Credits: What Ended and What Survives
- Home Utility Cost Estimator — what you actually spend on electricity today
Frequently asked questions
Is there still a 30% federal solar tax credit in 2026?+
No. The Residential Clean Energy Credit (IRC Section 25D), which gave homeowners 30% back on solar and battery installations, was terminated by the One Big Beautiful Bill Act signed in July 2025. It does not apply after December 31, 2025. There is no phase-down and no partial 2026 credit — the residential federal credit is simply $0. Systems whose qualifying expenditure fell in 2025, generally evidenced by a 2025 utility interconnection or permission-to-operate date, may still be claimed on a 2025 return.
Does solar still pay for itself without the federal tax credit?+
In some places, yes — but payback periods lengthen by roughly three to five years compared with the same system in 2025. What matters now is your retail electricity rate, whether your utility still offers full-retail net metering, and whether your state has its own credit or rebate. A homeowner paying $0.30/kWh in a full net metering state can still reach payback inside a decade. A homeowner paying $0.11/kWh under a net billing tariff with no state incentive may not reach payback within the system's warranty life.
Did the 30% credit ever apply to a solar lease or PPA?+
No. Section 25D required the taxpayer to own the property, so a leased or PPA system never qualified for the homeowner's credit. The third-party owner claimed the commercial Section 48E investment credit instead, and any benefit reached the homeowner only indirectly, as a lower monthly lease or PPA rate. Section 48E was not terminated for 2026, and the lease restriction added to it reaches only solar water heating and small wind rather than ordinary rooftop solar electric property. So the lease and PPA channel remains open in 2026 while the buyer's credit is gone — which is why solar sales are pushing harder toward leases this year.
What is the difference between net metering and net billing?+
Under traditional net metering, every kilowatt-hour you export to the grid is credited at the full retail rate you would otherwise pay. Under net billing, exports are credited at a much lower wholesale or avoided-cost rate, often around a quarter to a third of retail. California's NEM 3.0 is the best-known shift to net billing, and it lengthened typical payback substantially. Because most home systems export a large share of midday production, this single tariff difference can change payback by several years, which is why this calculator asks about it directly.
Why does a solar loan quote cost more than a cash quote for the same system?+
Low-APR solar loans are typically funded by a dealer fee that the installer pays the lender and then builds into the system price. That fee commonly runs 15% to 30% of the system cost, which is why a 2.99% loan quote can have a materially higher price per watt than a cash quote for identical equipment. The honest comparison is the total of all payments against the cash price, not the advertised interest rate.
What incentives are left for home solar in 2026?+
State tax credits and rebates, utility rebates, SREC markets in states such as New Jersey, Maryland, Massachusetts and Washington DC, net metering or net billing credits, and property and sales tax exemptions on the added home value. These vary enormously by state and change often. The DSIRE database at dsireusa.org is the standard free reference and lets you search by ZIP code. This calculator gives you input fields for each of these so you can model what actually applies to your address.
Want to try different numbers?
Back to the calculator ↑Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.