Are Solar Panels Worth It in 2026? The Post-Credit Math

Key Takeaways

• The question changed on January 1, 2026: with the 30% federal credit gone, solar's case now rests entirely on local numbers, not a national subsidy.
• Four inputs decide it: your electricity rate (US average 18.44¢/kWh in May 2026; states span ~12¢ to ~47¢), your sun, your export policy, and your state incentives.
• High-rate/strong-policy states still pencil comfortably; low-rate/weak-export states were marginal even with the credit.
• Owned systems also carry resale value — Berkeley Lab measured premiums near $4 per watt, and Zillow found solar homes sold for about 4.1% more.

The honest starting point: what the repeal did

Until last year, every American solar quote leaned on the same crutch: 30% back from the IRS. That ended for expenditures after December 31, 2025 — the Form 5695 instructions say it flatly — so an owned system installed in 2026 competes at sticker price. Payback periods lengthen accordingly: a system that returned its cost in 8 years with the credit takes roughly 11–12 without it, all else equal.

"All else," though, was never equal. Solar economics were always four local variables wearing a national costume. The costume is gone; the variables remain, and in the right combination they still work.

Variable 1: what you pay for electricity

Solar's revenue is the electricity you stop buying, so your rate is the price of the product. The spread across states is enormous — from around 12¢/kWh at the cheapest to Hawaii's 46.6¢, against a national residential average of 18.44¢/kWh (EIA data for May 2026). The same panel on the same roof earns nearly three times more in California (33.25¢) than in a 12¢ state. Rate trajectory matters too: national average rates rose about 7% year over year, and every increase retroactively improves an installed system's return. Find your utility's actual rate on your bill — not the state average — and note which direction it has moved over three years.

Variable 2: how much sun your roof actually gets

A kilowatt of panels in Phoenix produces substantially more than the same kilowatt in Buffalo, and shading, orientation, and tilt move the number further. This one is free to answer precisely: NREL's PVWatts calculator turns an address into an annual production estimate in minutes. Treat any installer projection more optimistic than PVWatts with suspicion.

Variable 3: what exports are worth

The forgotten variable, and in 2026 often the decisive one. When your panels overproduce at noon, the surplus goes to the grid — for full retail credit in states like Florida, or for a fraction of retail under net-billing regimes like California's, where midday exports earn a few cents against a 33¢ retail rate. Discounted exports don't kill solar; they reshape it — pushing value toward self-consumption, batteries, and flexible loads like EV charging. But a payback model built on full-retail assumptions in a net-billing state is fiction. Your utility's tariff sheet, not its marketing page, has the answer.

Variable 4: what your state adds back

The federal credit is gone; the state layer isn't. Depending on where you live, the stack can include state tax credits, property tax exemptions on the added home value, sales tax exemptions on the equipment, per-watt utility rebates, and SREC income. DSIRE catalogs all of it by state and utility. The difference between a bare state and a generous one routinely swings payback by several years — which is why our state-by-state worth-it guides run each state's numbers separately.

The fifth number nobody models: resale value

If you sell before payback completes, the asset follows the house. Berkeley Lab's "Selling into the Sun" study across eight states found buyers paid premiums averaging about $4 per watt — roughly $15,000 for a typical owned system — and Zillow's analysis put solar homes at 4.1% higher sale prices. Two caveats travel with those numbers: they predate the credit's repeal (premiums track what buyers save, which is rate-dependent, so high-rate states should hold up best), and they apply to owned systems — a leased system is a contract the buyer must assume, not an asset.

So — worth it or not?

The 2026 answer is a matrix, not a verdict. Strong yes: high rates plus retail-rate exports plus any state incentive (much of the Northeast, Florida among the IOUs, high-rate islands). Yes, with a battery: high rates but weak exports (California is the archetype). Run the numbers carefully: average rates with decent sun (Texas and much of the South and Midwest — provider choice decides it). Probably not yet: low rates, weak exports, no state help — there, wait for rates to rise or hardware to cheapen; both are trending your way. Get your four numbers, run PVWatts, and make a spreadsheet decision — 2026 is the year solar stopped being a tax story and went back to being an electricity story.

Keep reading: what solar saves · solar and home value · the best time to install.