Post-48E Solar Payback Calculator
The federal residential solar tax credit (Section 25D) expired Dec 31, 2025 and the Section 48E construction-start deadline passed July 4, 2026 (a Saturday; under IRC 7503 the effective deadline rolled to Monday, July 6, 2026). See your real post-48E payback with $0 federal credit, stack state incentives, and compare against the pre-48E 30% scenario.
⚠ The 30% Federal Solar Tax Credit (48E/ITC) expired July 4, 2026.
Selecting 30% ITC assumes you began construction before this deadline. Most new purchases no longer qualify.Learn about your options after the deadline →
Your System & Location
Drives cost-per-watt, electricity rate, peak sun hours, and state incentives.
Caps savings at 100% offset.
Payback Comparison
Post-48E Payback (no federal ITC)
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years
- Net cost (post-incentives)
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- Annual savings
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- 25-yr net savings
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Pre-48E Comparison (30% ITC)
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years (historical comparison)
- Federal ITC value
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- Net cost (with ITC)
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- 25-yr net savings
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Toggling ITC ON removes — years from your payback — but only if you could legally claim it.
Section 48E Lease/PPA Passthrough
With passthrough (15% discount on monthly savings):—/mo effective bill offset ·—-yr payback equivalent
Construction had to begin before July 4, 2026 to qualify for Section 48E. New post-deadline leases no longer capture it.
State & Local Incentive Stack
Federal ITC is intentionally excluded — these are the incentives that still apply to an owned residential system in the post-48E market.
Assumptions
Cost / watt
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Electricity rate
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Peak sun hrs
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System cost
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Annual production = systemSize × peakSunHours × 365 × 0.85 performance ratio. Annual savings = min(production × rate, monthlyBill × 12). 25-year net assumes 2.5%/yr rate escalation minus net cost. State incentive data sourced from DSIRE-curated JSON, last-updated per-row.
How solar payback works after Section 48E
For new owned residential systems installed today, the federal solar tax credit is $0. The Section 25D residential credit expired December 31, 2025 under the One Big Beautiful Bill Act, and the Section 48E construction-start deadline passed July 4, 2026, closing the last federal pathway for owned residential systems. The payback math therefore rests on three things your installer cannot change: installed cost per watt, local electricity rate, and the state/local incentive stack.
State incentives matter more than ever. A $1,000 state tax credit, a $0.25/W utility rebate, or an active SREC market can shave years off payback. Net metering policy (full retail, reduced, or net billing) drives the production-to-savings conversion. Property and sales tax exemptions do not show up in your upfront check but materially affect lifetime value. This calculator stacks every monetary incentive your state offers and shows the qualitative exemptions alongside.
The lease/PPA path is the only remaining route to a 30% federal credit, and only for projects that began construction before July 4, 2026. In a lease or PPA, the installer claims Section 48E and passes a portion through as a lower monthly payment. Passthrough averages 15-25% of the credit value; this calculator defaults to a 15% discount on monthly savings, which is the competitive end of the range. Scrutinize the escalator (typically 2-3.9%/yr) — it compounds against you over the 25-year term.
One caveat the headline number will not tell you: post-48E payback periods are 25-40% longer than the pre-48E numbers most online calculators still show. If a quote or tool promises a 6-7 year payback in 2026, it is almost certainly still assuming the 30% federal credit. The numbers here assume $0 federal credit by default and only apply state/local incentives. That is the legal reality.
How Post-48E Solar Payback Works
After the federal Section 25D residential credit expired on December 31, 2025 and the Section 48E construction-start window closed on July 4, 2026, new owned residential solar systems qualify for $0 in federal tax credit. Post-48E payback is a function of three things your installer cannot change: installed cost per watt, local electricity rate, and how your utility credits exported solar (full retail net metering, a reduced export rate, or net billing).
State and local incentives, property and sales tax exemptions, and any remaining utility rebates are the only programs that still shorten payback. The calculator above defaults to $0 federal credit and stacks every monetary state incentive on top of your local rate and sun hours. Toggle the 30% comparison on only to see the pre-48E world that most online calculators still assume.
Post-48E Solar Payback by State
Payback varies more by electricity rate and net-metering policy than by sunshine. Hawaii posts the fastest payback in the country despite middling sun hours, purely because residential rates there are the highest. California, New York, and the New England states follow for the same reason. The table ranks the 15 fastest-payback states for an 8 kW system using gross-cost payback (system cost divided by annual savings) with no federal credit applied, which is the post-48E default. Any state or local incentive you qualify for shortens these periods further; use the calculator above to stack your state's programs.
| State | Avg Payback (yrs) | Cost Per Watt | 25-Year Savings |
|---|---|---|---|
| Hawaii | 3.2 | $3.10 | $171,075 |
| California | 5.8 | $3.05 | $79,975 |
| New York | 7.5 | $3.10 | $57,875 |
| Massachusetts | 8 | $3.10 | $53,000 |
| Maine | 8.3 | $3.06 | $49,220 |
| District of Columbia | 8.7 | $3.20 | $47,750 |
| New Hampshire | 8.8 | $3.16 | $46,770 |
| Illinois | 9 | $2.90 | $41,175 |
| Texas | 9 | $2.50 | $35,725 |
| Maryland | 9.2 | $2.90 | $39,675 |
| New Jersey | 9.2 | $2.95 | $40,675 |
| Pennsylvania | 9.2 | $2.80 | $38,475 |
| Florida | 9.4 | $2.60 | $34,450 |
| Michigan | 9.4 | $2.80 | $37,025 |
| Mississippi | 9.5 | $2.60 | $33,975 |
Gross-cost payback for an 8 kW system (system cost / annual savings), no federal credit applied. 25-Year Savings = annual savings times 25 minus system cost (net). Source: EnergyTools state payback dataset.
Who Still Benefits from Solar Post-48E
Solar still pays back in the post-48E market, but the winners are more concentrated. You are a strong candidate if you live in a state with electricity rates above roughly $0.20 per kWh, full or near-full retail net metering, and an active state incentive such as a tax credit, rebate, or SREC market. California, Hawaii, New York, Massachusetts, Connecticut, and Rhode Island clear that bar and still post sub-9-year payback with no federal help.
You face a longer road if your rate is below $0.14 per kWh, your utility offers net billing or no export compensation, and your state has no monetary solar program. In those markets the lease or PPA path, where the installer captures Section 48E and passes a portion through as a lower monthly payment, is often the only route to a federal credit, and only for projects that began construction before the July 4, 2026 deadline. Run your numbers above before accepting any quote that promises a pre-48E payback period.
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Incentive FinderFull federal + state + local incentive lookup.