Is solar still worth it without the 30% federal tax credit?
Updated October 12, 2026 · By RoofPayback editorial · Reviewed by Automated fact and quality checks
Short answer
In many states, yes — but the gap between states is now much wider. The 30% federal Residential Clean Energy Credit is not available for systems placed in service after December 31, 2025, according to the IRS. Without it, our example home pays back its panels in 4.1 years in Hawaii and 5.8 years in California, but takes 12.5 years in Texas and 17.2 years in Washington. The single biggest factor is no longer the credit: it is how much you pay for electricity.
What changed
Until the end of 2025, homeowners could take 30% of the installed cost off their federal taxes. That credit no longer applies to new systems; only systems already operating by that date qualify. Some states and utilities still run their own rebates, and those are worth checking in the DSIRE database before you sign anything. Everything below assumes no incentive at all, which is the honest starting point for most buyers today.
How we ran the numbers
We used one example home in every state, with the same assumptions so that only sunshine and power prices change:
- 7 kW system at $3000/kW ($21000 installed), $100/yr maintenance
- 10500 kWh/yr of use, 40% of it while the sun is up
- full net metering, with credits capped at a year of grid purchases
- electricity prices rising 2.5%/yr and panels losing 0.5%/yr of output
Production comes from PVWatts for a reference city in each state, and prices are the EIA July 2026 residential averages. You can change every one of these inputs in the solar calculator.
Payback with and without the old credit
The "with 30%" column is hypothetical: it shows what the credit used to do, so you can see how much ground was lost.
| State | Payback today (no credit) | If a 30% credit still applied |
|---|---|---|
| Hawaii | 4.1 years | 2.9 years |
| California | 5.8 years | 4.1 years |
| Maine | 6.8 years | 4.9 years |
| Massachusetts | 7.3 years | 5.3 years |
| New York | 7.5 years | 5.4 years |
| New Jersey | 8.8 years | 6.3 years |
| Colorado | 10.9 years | 8 years |
| Illinois | 11.3 years | 8.2 years |
| Arizona | 12 years | 8.7 years |
| Florida | 12.3 years | 9 years |
| Texas | 12.5 years | 9.1 years |
| Nevada | 14.1 years | 10.4 years |
| Louisiana | 14.8 years | 10.9 years |
| Oregon | 15.4 years | 11.3 years |
| North Dakota | 16 years | 11.7 years |
| Washington | 17.2 years | 12.7 years |
In our data, 13 states plus D.C. still pay back in under ten years without any credit — mostly in the Northeast and Mid-Atlantic, plus Michigan, California and Hawaii, all places with above-average power prices. See every state on the state rankings page.
Why expensive power beats sunshine
Arizona and Nevada are among the sunniest states: 1755 and 1753 kWh per kW per year. Yet their example paybacks (12 years and 14.1 years) are slower than Massachusetts (7.3 years), which produces only 1302 kWh per kW. The reason is price. Massachusetts homes paid 30.49¢/kWh in July 2026, while Nevada paid 12.77¢ and Arizona 15.38¢. Each kWh your panels make is worth whatever you would have paid for it, so a cloudy, expensive state can beat a sunny, cheap one.
That is also why it pays to check the latest electricity prices by state: if your rate is rising faster than average, solar pays back faster than these examples suggest.
Where solar is now a harder sell
Without the credit, the example payback is 12 years or more in a majority of states, mostly in the South, Mountain West and Pacific Northwest, where power is cheap. Twelve or more years is not necessarily a bad investment for panels that typically last decades, but it leaves less margin for surprises: a roof replacement, a move, or a utility that lowers its credit for exported power.
If you are in one of these states, three things matter more than ever:
- Your real price per kWh. Use the all-in rate from your bill, not the state average.
- System size. A smaller system that you use directly often pays back faster; see how many solar panels you need.
- The export credit. If your utility pays less than retail for exported power, payback stretches; read net metering vs. net billing.
What still counts as an incentive
The federal credit is gone for new systems, but state rebates, utility programs, property-tax exemptions and sales-tax exemptions vary by place and change over time. They are not included in our numbers. If you find one that applies to you, enter it in the "Rebates and incentives" field of the calculator to see the effect on your own payback.
Bottom line
Solar without the federal credit is still a strong deal where electricity is expensive, and a slower, more marginal one where it is cheap. Before you get quotes, look up your state on the state pages, then run your own bill and quote through the calculator. If your payback lands well inside the life of the panels, the credit's disappearance matters less than it sounds.