Your payback
SEIA/Wood Mackenzie Q2 2026 national average: $3.36/W.
0% federal for new 2026 homeowner systems. Add state/utility % here.
From the system sizer — production capped at your usage.
EIA Sep 2026 national residential forecast ≈ $0.18.
Planning assumption, editable.
Frequently asked
Why is payback longer than articles from 2024 say?
Most older articles assumed the 30% federal credit. On a $23,500 system that credit was worth about $7,050. Without it, the same system costs 43% more out of pocket, which stretches payback by several years.
What if my utility doesn't offer net metering?
Then only the electricity you use while the sun shines offsets your bill — roughly half of production for a typical home without a battery. Select "self-consumption only" above to see the difference. Batteries change this math but add $8,000–$15,000+.
Should I lease instead of buying?
Leases and PPAs can still access commercial tax credits (the leasing company claims them), which sometimes makes $0-down offers competitive post-2026. Read our lease vs buy guide for the tradeoff.
Worked example: payback on a 7 kW system, step by step
Start with a 7 kW system at $3.36 per watt, or $23,520 installed, with no federal credit in 2026 and no state incentive. In a location with 5.0 peak sun hours, that system produces roughly 7 times 5.0 times 365 times 0.80, or about 10,200 kWh in its first year. At an electricity rate of $0.18 per kWh with full net metering, the first-year saving is about $1,840. Divide the cost by the first-year saving and the simple payback is about 12.8 years. Two forces then pull in opposite directions. Electricity rates rising at 3 percent a year shorten the real payback, because every future year saves more than the first. Panel degradation of about 0.5 percent a year and an inverter replacement around year 12 to 15, typically $1,500 to $3,000, lengthen it. With 3 percent rate growth factored in, the cash-flow payback on this example lands closer to 11 years, and the 25-year net saving after the inverter replacement is roughly $28,000 to $34,000. Run the calculator above with your own rate and sun hours, because a $0.30 rate in California and a $0.11 rate in the Pacific Northwest produce completely different answers for the identical system.
What moves payback the most, ranked
First is your electricity rate. Payback is roughly inverse to the rate: double the rate and you nearly halve the payback period. Second is net metering. Full retail-rate credit for exported power is worth far more than a wholesale export rate, and homes without net metering typically offset only about half their production without a battery. Third is installed cost per watt. Negotiating from $3.60 to $3.10 per watt on a 7 kW system saves $3,500 and shortens payback by about two years at average rates. Fourth is self-consumption: the more of your production you use directly, by running dishwashers, laundry, and EV charging in daylight hours, the less your answer depends on export policy. Incentives now rank last for most buyers in 2026, because the federal residential credit has ended and what remains is state and utility programs that vary from generous to nonexistent by zip code. Check your state program, but do not build the decision on a credit you have not confirmed you qualify for.
Payback mistakes to avoid
The most common mistake is quoting payback from a salesperson’s first-year saving without asking what rate increase and degradation they assumed; optimistic versions of both can shave three years off the answer on paper. The second is ignoring the roof: if your roof needs replacement within ten years, price the re-roof into the solar decision or do the roof first, because removing and reinstalling panels later costs $1,500 to $3,500. The third is treating payback as the whole decision. A system that pays back in year 12 and then produces low-cost power for another 13 years can still be a sound purchase, while a fast-payback lease that raises your home’s resale friction may not be. Use payback to compare quotes against each other, not as a single pass-or-fail test.