How solar payback is estimated
Take the installed cost minus any rebates, then add up each year's savings on your electric bill until they equal that cost. Savings grow as utility rates rise and shrink slightly as panels degrade.
Example
An 8 kW system at $3.00/W costs $24,000. It makes about 11,300 kWh in year one, worth $1,921 at $0.17/kWh. With 3% yearly rate increases and 0.5% degradation, it pays back in about 11 years and saves roughly $65,500 over 25 years.
Federal tax credit
The 30% federal Residential Clean Energy Credit (Section 25D) ended for systems installed after December 31, 2025, under the 2025 budget law. Check your state and utility for remaining rebates, and enter them above.
Frequently asked questions
What is a good solar payback period?
Under 10 years is generally considered good; many U.S. homes fall between 7 and 12 years depending on rates and sunshine.
Is the 30% solar tax credit still available?
Not for homeowners who buy their own system and install it after 2025. Leases and power purchase agreements may still pass through commercial credits.
Does net metering affect payback?
Yes. If your utility credits exported power at less than the retail rate, savings are lower and payback longer.