Solar Payback Without the Tax Credit
See how many years solar takes to pay for itself and what it saves over 25 years, with a year-by-year chart.
Your result
Enter your numbers and press the button. Your result appears here.
The 30% federal credit for homeowner-owned solar ended for systems installed after December 31, 2025. State rebates and utility incentives can still shorten the payback.
How it works
Each year's savings = kWh produced × electricity price. Payback is the year the running total of savings reaches the net cost. Output falls by the panel loss rate each year.
Example: an 8 kW system costing $20,800 saves $1,989 in year one at 18.19¢ per kWh and pays back in 10.7 years.
At a glance
Same settings as the calculator, changing only the rebates.
| Rebates | Net cost | Year 1 savings | Payback | 25-yr gain |
|---|---|---|---|---|
| $0 | $20,800 | $1,989 | 10.7 yrs | $26,059 |
| $1,000 | $19,800 | $1,989 | 10.2 yrs | $27,059 |
| $2,500 | $18,300 | $1,989 | 9.4 yrs | $28,559 |
| $5,000 | $15,800 | $1,989 | 8.1 yrs | $31,059 |
| $7,500 | $13,300 | $1,989 | 6.8 yrs | $33,559 |
Common questions
How long does solar take to pay for itself?
It depends mainly on your electricity price and how much sun you get. At U.S. averages ($2.60/W, 18.19¢ per kWh and 1,367 kWh per kW) an 8 kW system pays back in about 10.7 years.
Do solar panels lose efficiency?
Yes, slowly. NREL's review of field studies puts the median loss at about 0.5% a year.
Is there still a federal solar tax credit?
Not for homeowners who buy their system. The 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. Leased systems and PPAs can still carry a business credit (48E) that the installer claims.
What if my utility pays less for exported power?
Lower the share credited at full price and enter your utility's export credit under More settings. Payback gets longer.
Sources
- EnergySage, Solar panel cost by state (updated November 6, 2026): https://www.energysage.com/local-data/solar-panel-cost/
- U.S. EIA, Electric Power Monthly, Table 5.6.B (residential price, Jan–Aug 2026): https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_b
- NREL PVWatts v8 (20° tilt, south-facing, 14% losses), state results compiled by TheGreenWatt: https://thegreenwatt.com/average-peak-sun-hours-by-state/
- NREL, Jordan and Kurtz, Photovoltaic Degradation Rates: An Analytical Review: https://docs.nrel.gov/docs/fy12osti/51664.pdf