costsMar 5, 202610 min read

Are Solar Panels Worth It in 2026? ROI Calculator & Analysis

PermitDeck Team

Data-Driven Home Improvement Intelligence

With the 30% federal tax credit and falling panel costs, solar has never been more attractive. Here's the math.

Aerial view of houses with solar panels on rooftops

The Short Answer: Yes, For Most Homeowners

With the 30% federal tax credit (extended through 2032), falling panel costs, and rising electricity rates, the average solar installation now pays for itself in 6-9 years and saves $20,000-$50,000 over 20 years.

Average Solar Costs in 2026

System SizeCost Before IncentivesAfter 30% Tax CreditMonthly Savings 5 kW$15,000$10,500$75-$125 8 kW$24,000$16,800$120-$200 10 kW$30,000$21,000$150-$250

The cost per watt has dropped to $2.50-$3.80 depending on your location, down from $4.00+ just a few years ago.

Workers installing solar panels on a rooftop

The Federal Tax Credit (ITC)

The Investment Tax Credit gives you 30% of your total solar installation cost as a credit on your federal taxes. This isn't a deduction — it's a dollar-for-dollar reduction in what you owe.

Example: A $24,000 system gets a $7,200 tax credit, bringing your net cost to $16,800.

When Solar Doesn't Make Sense

Heavy shade: Trees or buildings blocking 50%+ of your roof significantly reduce production

North-facing roof: South-facing roofs produce 40% more than north-facing

Very low electricity rates: If you pay less than $0.10/kWh, the payback period stretches beyond 15 years

Planning to move soon: You need 5+ years to see meaningful ROI

Modern suburban houses equipped with solar panels

State-by-State Differences

Solar economics vary dramatically by state due to:

Sun hours: Arizona gets 6+ peak sun hours/day vs 3.8 in the Northeast

Electricity rates: Hawaii ($0.35/kWh) vs Louisiana ($0.10/kWh)

State incentives: Many states offer additional rebates on top of the federal credit

Net metering: Some states pay you for excess energy sent to the grid

*Use our solar ROI calculator to see exactly what solar would save you based on your location and electricity bill.*