Solar panels are worth it in 2026 if you own your home, expect to stay at least 10 to 12 years, and would save about $2,500 or more a year on electricity, because a typical system costs $31,135 before incentives and pays back in roughly 10 to 13 years at that level. They are not worth it if you might move within a decade, your electric bill is low, or your roof is shaded, because without the federal tax credit the payback stretches toward 15 years or more.
The federal credit is the big change. The IRS says the 30% residential clean energy credit “is not available for any property placed in service after December 31, 2025,” so homeowners who buy a system now pay full price. The payback table below shows what that means for your bill.
Quick answer: worth it or skip it?
| Solar is worth it if | You can skip it if |
|---|---|
| You own your home and plan to stay 10 to 12 years or more | You may move in the next 5 to 10 years |
| You would save about $2,500 or more a year on electricity | Your electric bill is low, with savings under about $1,500 a year |
| Your roof has good sun and little shade | Your roof is heavily shaded or needs replacing soon |
| You can pay cash or borrow at a low rate | You would need an expensive loan to cover the cost |
| Your state or utility offers incentives | You rent, or you would struggle to cover the upfront cost |
What happened to the solar tax credit?
The IRS says the residential clean energy credit equaled 30% of the cost of qualifying property installed from 2022 through December 31, 2025, and that “the credit is not available for any property placed in service after December 31, 2025.” Qualifying costs included solar panels, battery storage and installation labor. The Solar Energy Industries Association describes the credit as “terminated as of December 31, 2025.”
On a $31,135 system, the old credit was worth about $9,340. Losing it is why homeowners who buy now face a longer payback than buyers did a year ago.
The credit for businesses was different. Per the same SEIA explainer, commercial solar projects must have started construction on or before July 4, 2026, or be placed in service on or before December 31, 2027. Because of that, EnergySage notes that solar companies can still claim the federal credit after 2025, so leases and power purchase agreements may cost less than buying. Ask any installer whether their credit is still available for your project.
How much do solar panels cost in 2026?
EnergySage’s cost page (updated 30 June 2026, with state data updated 23 October 2026) gives an average of about $2.60 per watt before incentives. For a typical 12 kW home system, that is $31,135. In an article updated in November 2025, EnergySage said solar averaged $2.53 per watt in the first half of 2025 and called it the lowest price on record. Your own quote will vary with system size, roof and installer.
How long does it take for solar panels to pay for themselves?
EnergySage says the average payback period is about 10 years. That is an average, so the useful question is what it is for your bill. This table divides the $31,135 average system cost by your first-year electricity savings.
| Electricity savings in year one | Per month | Payback if rates stay flat | Payback if rates rise 3% a year |
|---|---|---|---|
| $1,500 | $125 | 20.8 years | 16.4 years |
| $2,000 | $167 | 15.6 years | 13.0 years |
| $2,500 | $208 | 12.5 years | 10.7 years |
| $3,000 | $250 | 10.4 years | 9.2 years |
| $3,500 | $292 | 8.9 years | 8.0 years |
How to read it: EnergySage’s average payback of about 10 years matches a household saving around $3,000 a year. If your savings are nearer $1,500, the system takes well over 15 years to pay back, which is a poor deal if you might move. The 3% rate rise is our assumption. EnergySage cites the Energy Information Administration expecting residential rates to average 16.8 cents per kilowatt-hour in 2025, up 2% from 2024, and ICF projecting rises of 15% to 40% by 2030. The table ignores financing costs, maintenance, panel degradation and inverter replacement, which lengthen payback, and state or utility incentives, which shorten it.
Are solar panels worth it without the tax credit?
Yes for many owners, no for others. EnergySage’s November 2025 article estimated that losing the credit adds about two years to payback, from roughly seven to nine, a figure it attributes to Wood Mackenzie. It says homeowners starting now can expect to break even in about 10 years and then get at least 15 more years of free electricity, but those projections depend on electricity prices continuing to rise.
Use the table to test your own bill. At $3,000 or more a year in savings, solar still works without the credit. At $1,500 or less, it probably does not.
Should you lease or buy solar panels?
EnergySage says ownership generally offers better long-term returns, while leases avoid the upfront cost. Because installers may still claim a federal credit that homeowners can no longer claim, lease and power purchase agreement prices may be lower than buying in some cases. Compare the total you would pay over the contract, ask what happens if you sell your home, and check whether there is a price escalator.
What are the pros of solar panels?
- Protection from rising rates. Savings grow if utility prices rise, as the Energy Information Administration and ICF projections cited by EnergySage suggest.
- Free electricity after payback. EnergySage says homeowners can expect at least 15 years of free electricity after breaking even.
- Low prices by historical standards. Prices hit a record low of $2.53 per watt in early 2025, according to EnergySage, compared with nearly $90,000 for an average system in the early 2000s.
- Possible state and utility incentives. These can shorten payback, though they vary by location.
What are the cons of solar panels?
- No federal credit for buyers. The IRS says the credit ended for property placed in service after 31 December 2025.
- High upfront cost. The average system costs about $31,135 before incentives.
- Payback depends on future rates. EnergySage’s own projections assume electricity prices keep rising.
- It only pays if you stay. A payback of 10 to 13 years means little if you move in five.
- Your roof and shade matter. A poor roof can erase the savings.
What are the alternatives to buying solar panels?
- Lease or power purchase agreement. No upfront cost, but usually lower long-term returns than owning.
- State and utility incentives. Search by ZIP code in the DSIRE database, run by the N.C. Clean Energy Technology Center at N.C. State University, before you decide.
- Getting several quotes. Prices vary by installer, and the cost per watt is the number to compare.
- Waiting. If your savings are low, the money may do more good elsewhere.
So, are solar panels worth it for you?
Look at your last 12 months of electric bills and ask an installer what they would save you in year one. If the savings are $2,500 or more a year, and you plan to stay for a decade or longer, solar is likely worth it even without the credit. If they are under $1,500, or you may move soon, skip it. Get at least three quotes, compare the cost per watt, and check state and utility incentives before you sign.
Frequently asked questions
Is there still a federal tax credit for solar panels?
Not for homeowners who buy their own system. The IRS says the 30% residential clean energy credit is not available for any property placed in service after December 31, 2025. Businesses and installers may still claim a separate commercial credit, which can lower lease prices.
How much do solar panels cost?
EnergySage puts the average at about $2.60 per watt before incentives, or $31,135 for a typical 12 kW home system, based on its June 2026 page. Your quote will vary with system size, roof type and installer, so compare the price per watt across several bids.
How long do solar panels take to pay for themselves?
EnergySage gives an average payback of about 10 years. At savings of $2,500 a year the payback is 12.5 years if rates stay flat, and at $1,500 a year it is nearly 21 years. Your own savings decide the answer.
Are solar panels worth it without the tax credit?
For many homeowners with high electric bills who stay put, yes. EnergySage estimates losing the credit adds about two years to payback. For households with small savings, a short stay or a shaded roof, the numbers often do not work.
Should I lease or buy solar panels?
Buying generally gives better long-term returns, while leasing avoids the upfront cost, according to EnergySage. Because installers may still claim a federal credit, lease prices can be competitive. Compare total contract costs and ask what happens if you sell the home.
Sources
- IRS, Residential Clean Energy Credit (checked 28 October 2026)
- EnergySage, Solar panel cost in 2026 (updated 30 June 2026; state data updated 23 October 2026)
- EnergySage, Solar still pays for itself, even without the tax credit (updated 21 November 2025)
- Solar Energy Industries Association, clean energy provisions in the One Big Beautiful Bill
- DSIRE, Database of State Incentives for Renewables and Efficiency