With no federal credit in 2026, a typical $22,400 8 kW system pays back in about 6 years where power costs 30 cents a kWh, 10 years at 20 cents and 16 years at 12 cents, if your utility credits exports at the full rate. It makes about 11,600 kWh a year at average US sun.
8 kW at average US sun: about 11,600 kWh a year
Worth about $1,400 a year at 12 cents a kWh, $3,500 at 30 cents
Simple payback on $22,400: about 16 years at 12 cents, 6 years at 30 cents
No federal credit for systems you own finished after December 31, 2025
Low export credits (California's Solar Billing Plan) stretch payback unless you use the power or store it
Prices verified November 2026 · Cross-referenced against 42+ American pricing sources · See methodology
01 / PricesUSA · November 2026
What an 8 kW system's power is worth in its first year, by electricity price (2026)
Low = a cloudy state (about 4 peak sun hours), typical = the US average (about 5), high = the desert Southwest (about 6.5). Assumes every kWh is worth the full price, either used at home or credited one-for-one.
What an 8 kW system's power is worth in its first year, by electricity price (2026)Per year, low to high with the typical price marked.
8 kW, power at 38 cents a kWh: first-year value$4,400$3,550–$5,750
8 kW, power at 30 cents a kWh: first-year value$3,500$2,800–$4,550
8 kW, power at 25 cents a kWh: first-year value$2,900$2,350–$3,800
8 kW, power at 20 cents a kWh: first-year value$2,350$1,850–$3,050
8 kW, power at 16 cents a kWh: first-year value$1,850$1,500–$2,450
8 kW, power at 12 cents a kWh: first-year value$1,400$1,100–$1,800
8 kW, power at 10 cents a kWh: first-year value$1,150$930–$1,500
$0$2,000$4,000$6,000
Job
Low
Typical
High
8 kW, power at 10 cents a kWh: first-year valueper year
$930
$1,150
$1,500
8 kW, power at 12 cents a kWh: first-year valueper year
$1,100
$1,400
$1,800
8 kW, power at 16 cents a kWh: first-year valueper year
$1,500
$1,850
$2,450
8 kW, power at 20 cents a kWh: first-year valueper year
$1,850
$2,350
$3,050
8 kW, power at 25 cents a kWh: first-year valueper year
$2,350
$2,900
$3,800
8 kW, power at 30 cents a kWh: first-year valueper year
$2,800
$3,500
$4,550
8 kW, power at 38 cents a kWh: first-year valueper year
$3,550
$4,400
$5,750
8 kW system, installed (no federal credit)installed
$18,350
$22,400
$28,900
8 kW + Tesla Powerwall 3installed
$29,300
$36,400
$46,500
US prices, November 2026. Low is a simple job in a low-cost area; high is a bigger job or a high-cost city.
02 / By city195 cities priced
Does solar payback and savings change by city?
Yes. The same job costs more where labor and rent cost more. Here's how solar panel prices in the biggest US metros compare with the US typical of $22400.
Solar prices in the 12 biggest US metrosEach city's typical solar panel price against the US typical of $22,400.
Payback is the system price divided by what its power saves you each year. Before 2026 the 30% federal credit cut the price; for systems you own finished after December 31, 2025, it is gone. So an 8 kW system now costs the full $22,400 or so, and payback runs about 40% longer than the same system did with the credit.
An 8 kW system at average US sun makes about 11,600 kWh a year. At 12 cents a kWh that power is worth about $1,400; at 30 cents about $3,500. Panels usually carry 25-year warranties, so anything under about 15 years is a solid return.
02
Your electricity price matters most
EIA's 2024 state averages (all customers) run from under 10 cents a kWh in Louisiana, North Dakota, Idaho, Texas, Oklahoma and Nebraska to about 24 cents in Massachusetts, Rhode Island and Connecticut, 27 cents in California and 38 cents in Hawaii. The US average was about 13 cents. Home rates usually run a few cents higher than these all-customer figures.
That is why solar pays back fastest in Hawaii, California and New England, even though the Southwest gets more sun. In cheap-power states, payback can run past 15 years unless a state or utility program helps.
03
How exports are credited
The table assumes full credit for every kWh. Not every utility does that. Florida's investor-owned utilities must offer net metering at the full retail rate, with a once-a-year payout at a lower rate for leftover credits. PG&E, SCE and SDG&E customers who applied after April 14, 2023 are on California's Solar Billing Plan, which pays far less for exports than for power you buy.
Under rules like California's, the more of your own power you use (or store in a battery for the evening), the better solar pays. Texas has no statewide net metering rule, so your utility or retail plan sets the buyback rate.
04
Does a battery speed up payback?
Usually not on its own. A Powerwall 3 adds $11,500–$18,500 and pays back mainly where exports earn little or time-of-use rates are steep. Buy one for backup first and savings second.
05
Compare
Cash, loan or lease
Berkeley Lab found loan-financed systems priced well above cash purchases in 2025. Lease and PPA companies can still claim a business credit, and in EnergySage's first-half 2026 data a prepaid lease or PPA cost less per kWh than buying with cash, while a standard PPA with no prepayment cost more. Compare the 25-year cost of each, not the monthly payment.
06
Compare
Payback and 25-year value by power price
For a typical 8 kW system at $22,400, at average US sun, with full credit for every kWh. The 25-year value assumes power prices never rise and the panels lose 0.5% of output a year, so it is a cautious figure.
Your power price
Value in year one
Simple payback
Value over 25 years
12 cents a kWh
$1,400
About 16 years
About $33,000
16 cents a kWh
$1,850
About 12 years
About $43,600
20 cents a kWh
$2,350
About 9.5 years
About $55,400
25 cents a kWh
$2,900
About 7.7 years
About $68,300
30 cents a kWh
$3,500
About 6.4 years
About $82,400
38 cents a kWh
$4,400
About 5 years
About $103,600
Subtract upkeep, mainly one inverter swap, from the 25-year value. The EIA puts the 2025 US average home power price at 17.3 cents a kWh.
07
Step by step
Work out your own payback in 5 steps
Do this with a real quote and a real bill. It takes about 20 minutes.
Find your real price per kWhTake the part of your bill that changes with use and divide it by the kWh you used. Leave out fixed monthly fees; solar does not remove them.
Check the yearly outputFind the yearly kWh on the quote. Check it against NREL's PVWatts for your address. If the quote is much higher, ask why.
Learn your export ruleAsk your utility what it pays for power you send back. Full credit means every kWh is worth your price. A low export rate means only the power you use at home is worth the full price.
Put a value on the yearMultiply the kWh you will use at home by your price. Multiply the kWh you will export by the export rate. Add the two.
Divide and add upkeepDivide the system price by that yearly value. That is your payback in years. Then add one inverter replacement, about $2,300, to the cost.
08
Compare
Same system, two export rules
Say you pay 30 cents a kWh and your 8 kW system makes 11,600 kWh a year. Here is what the export rule does to payback on $22,400.
Full credit for exports
Low export rate
Power used at home
Every kWh worth 30 cents
60% of output, worth 30 cents
Power sent to the grid
Worth 30 cents too
40% of output, worth 5 cents
Value in year one
About $3,480
About $2,320
Simple payback
About 6.4 years
About 9.7 years
The 60/40 split and 5-cent export rate are an example, not a rule. Ask your utility for its real export rate. Using more power in daylight, or storing it, moves you toward the left column.
09
Worked example
Worked example: what owning 8 kW costs over 25 years
Typical 2026 prices for a system you buy with cash. No federal credit.
Line itemCost
8 kW system, installed$22,400
One string inverter replacement, around year 10–15$2,300
Monitoring app (most are free)$0
25-year owner cost$24,700
At average US sun the panels make about 273,000 kWh over 25 years, even with 0.5% loss a year. That is about 9 cents a kWh. Compare that with your utility price, and with any lease or PPA rate you are offered.
10
Compare
Cash, loan, lease or PPA: who gets what in 2026
How you pay changes the price, who claims the tax credit and your payback.
How you pay
Who owns it
Federal credit in 2026
Watch for
Cash
You
None for systems finished after Dec 31, 2025
No interest or loan fees. You keep all the savings.
Loan
You
None
Dealer fees built into the price. Berkeley Lab data show loan-financed systems priced well above cash ones in 2025.
Lease
The company
The company may claim a business credit
A yearly payment rise, and what happens when you sell the house.
PPA (pay per kWh)
The company
The company may claim a business credit
The rate per kWh, the yearly rise, and a buyout price.
Prepaid lease or PPA
The company
The company may claim a business credit
You pay up front for power you do not own. Read the transfer and removal terms.
A lease or PPA has no payback in the usual sense. Your saving is your old bill minus your new bill and the payment.
11
Watch out
Payback claims to distrust
The math subtracts a 30% federal credit from a system you will own in 2026.
It assumes power prices rise 4–6% every year but never shows the flat-price case.
"Savings" count the whole bill, including fixed fees that solar does not remove.
The yearly output is far above PVWatts for your address.
Every exported kWh is valued at full price where your utility pays less.
No inverter replacement appears anywhere in the 25-year math.
A loan payment is shown without the loan's total cost or fees.
A lease or PPA rises each year and the quote hides the rate. At 2.9% a year, a payment about doubles in 25 years.
12
Tip
The one number to ask for
Ask each seller for the 25-year total cost and the 25-year kWh. Divide the cost by the kWh. That cost per kWh lets you compare cash, loan, lease and PPA offers on one line.
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05 / Questions10 answers
Solar payback and savings: FAQ
Is solar still worth it without the federal tax credit?
Often, yes, where power is expensive. An 8 kW system at $22,400 pays back in about 6–8 years at 25–30 cents a kWh. At 12 cents it is about 16 years, so the case is weaker in cheap-power states.
When did the federal solar tax credit end?
The 30% Residential Clean Energy Credit ended for expenditures made after December 31, 2025, under the July 4, 2025 tax law. The IRS counts the expense when installation is complete, so paying in 2025 for a 2026 install does not qualify.
How much will solar save me a year?
About $1,400–$3,500 for 8 kW at average US sun, at 12–30 cents a kWh with full export credit. Multiply your kWh rate by about 1,450 kWh per kW for a rough figure.
Does a lease or PPA still get a tax credit?
The company that owns the system may still claim the business energy credit (Section 48E) if it meets the start-of-construction and in-service deadlines; reported deadlines are construction started by July 4, 2026 or in service by December 31, 2027. You do not claim it, but some of it can show up in a lower price.
Does solar raise my property taxes?
In many states, no. Florida, Texas, Arizona, New Jersey and Maryland exempt the added value, and New York and Massachusetts offer multi-year exemptions, per November 2026 state guides. Check your state.
What is a good solar payback period?
Under about 10 years is strong. Ten to 15 years is fair, since panels are usually warrantied for 25 years. Past about 15 years, the case is weak unless you value backup power or plan to stay a long time.
How do I calculate my solar payback?
Divide the system price by the value of its power in a year. A $22,400 system worth $2,350 a year pays back in about 9.5 years. Use your real price per kWh and your utility's export rate.
Do rising power prices shorten solar payback?
Yes. Each cent added to your price makes your solar power worth more. The EIA expects the US average home price to go from 17.3 cents a kWh in 2025 to about 18.2 cents in 2026 and 18.7 cents in 2027.
What happens after solar pays for itself?
The power is close to free for the rest of the system's life, minus upkeep. Panels keep working past their warranty, but make a little less each year; NREL found a typical loss of about 0.5% a year.
What if I sell my house before solar pays off?
A system you own goes with the house when you sell. With a lease or PPA, the buyer must take over the contract or you pay to end it. Read the transfer terms before you sign.
These are independent estimates from marketplace quote data, national cost surveys, Berkeley Lab installed-price data, installer and manufacturer pricing and state program pages. No installer can influence them, so always get a few quotes. Last reviewed November 2026. Read the full methodology →