Is Solar Worth It in 2026?
The federal solar tax credit is gone. We analyzed all 50 states + DC to find out where solar still pays off.
Urgent tax credit deadlines
- Section 48E phase-out completes December 31, 2027 — projects must be placed in service by then (469 days left).
Key change for 2026: The federal residential solar Investment Tax Credit (25D) expired on January 1, 2026. Without the 30% federal credit, payback periods are significantly longer. State-level incentives and net metering policies now matter more than ever.
What about the §48E manufacturing credit?
Section 48E (the Qualified Advanced Energy Project Credit) is a manufacturer-facing credit, not a consumer credit — homeowners cannot claim it directly. Its construction-start deadline was July 4, 2026 and has passed. Some installers may have qualified pipeline projects (safe-harbored before the deadline) and can pass through lower panel/inverter pricing as a result, but any specific dollar passthrough depends on the installer and is not guaranteed. Treat advertised "48E savings" on a residential quote with skepticism and ask the installer to document the source.
National Avg Cost/Watt
$2.70
Avg Payback (No ITC)
15.6 yr
Avg Payback (With 30% ITC)
10.9 yr
Avg Electricity Rate
$0.184
Top 5 States for Solar in 2026
Shortest payback periods without the federal ITC
Browse All States
Select a state to see detailed solar analysis, incentives, and payback estimates
Excellent Viability (4 states)
Good Viability (26 states)
Alabama
9.9 yr payback
Alaska
9.7 yr payback
Arizona
10.1 yr payback
Connecticut
9.7 yr payback
Delaware
10.8 yr payback
District of Columbia
8.7 yr payback
Florida
9.4 yr payback
Georgia
10.6 yr payback
Illinois
10.8 yr payback
Indiana
10.1 yr payback
Louisiana
10.6 yr payback
Maine
8.3 yr payback
Maryland
9.2 yr payback
Michigan
9.4 yr payback
Mississippi
9.5 yr payback
New Hampshire
8.8 yr payback
New Jersey
9.2 yr payback
Ohio
10.2 yr payback
Pennsylvania
9.2 yr payback
Rhode Island
10.2 yr payback
South Carolina
10 yr payback
Texas
9 yr payback
Vermont
9.8 yr payback
Virginia
10.8 yr payback
West Virginia
10.5 yr payback
Wisconsin
10.7 yr payback
Fair Viability (17 states)
Arkansas
11.5 yr payback
Colorado
12.3 yr payback
Iowa
14.1 yr payback
Kansas
11.5 yr payback
Kentucky
11.4 yr payback
Minnesota
13.5 yr payback
Missouri
12.7 yr payback
Nebraska
13.8 yr payback
Nevada
12.4 yr payback
New Mexico
12.1 yr payback
North Carolina
11.2 yr payback
Oklahoma
12.4 yr payback
Oregon
14.1 yr payback
South Dakota
12.8 yr payback
Tennessee
11.3 yr payback
Utah
14.5 yr payback
Wyoming
13.5 yr payback
What Changed in 2026?
Before 2026 (with 30% ITC)
- 30% federal credit (expired Dec 31, 2025) on total system cost
- $7,000+ savings on a typical 7kW system
- National avg payback: ~10.9 years
2026 (no federal ITC)
- 0% federal tax credit (expired Jan 1, 2026)
- Full system cost falls on the homeowner
- National avg payback: ~15.6 years
What the 2026 market data shows
Source: SEIA Q1 2026 US Solar Market Insight. Figures are exact as reported — not estimates.
Residential solar growth
+6%
YoY in Q1 2026 · 1,179 MWdc
Growth driver
48E
All Q1 growth = Third-Party Ownership (lease & PPA)
Enphase revenue
-20.6%
YoY — reflects seasonality and post-credit contraction
The financing inversion: In California, lease/PPA effective rates are now $0.18–$0.22/kWh, while cash-purchase payback stretches to ~14 years. The driver is 48e tax credit passthrough to lease/ppa customers. See the lease vs PPA vs cash breakdown →
What homeowners are saying (2026)
Source: Reddit r/solarenergy community thread (2026). A thread titled “Is solar still worth it in 2026?” drew 100+ comments. This is community sentiment — not a scientific survey — but the recurring themes track the market data above.
- Installer margins exposed; pricing transparency demanded
- Value shifting from payback to bill stability
- Lease/PPA contract complexity and confusion
- Growing awareness that lease/PPA now beats cash on effective rate
Bottom line for 2026
Solar is still being installed at growing volumes — but the who and how flipped after the 25D residential credit expired on January 1, 2026. Q1 2026’s +6% growth was funded entirely by Third-Party Ownership (lease/PPA) capturing the 48E credit, while the cash-purchase segment contracted. If you’re comparing options today, the financing structure now matters as much as the panels themselves.
Data is for estimation purposes only. Actual costs, savings, and payback periods will vary based on local factors, installation specifics, and policy changes. Consult a qualified solar installer for personalized estimates.