Solar just got $9,000 more expensive
Congress ended the 30% federal tax credit for systems finished after 31 December 2025. The hardware costs what it always did. Most of the web has not caught up, so every figure here is computed without it, from 205,297 installations where Berkeley Lab recorded what people actually paid.
At $3.75 a watt and 17.45¢ a kilowatt-hour. Your state will differ, often by a lot.
What a kilowatt of panels makes each month. Annual totals hide this: two systems with similar yearly output can behave completely differently through a winter, which is the part of owning solar nobody quotes you on.
Three measurements and one assumption
Prices from closed contracts, collected by state programme administrators. Not quotes, not models, not an installer's marketing.
Per kW installed, per year, modelled at the largest city in each state rather than averaged into one national figure.
The residential retail rate in each state, refreshed monthly, because a saving is only worth what the electricity it replaces costs.
Deliberately below the last decade's trend. It is the assumption that makes solar look worse, which is the right direction when nobody here is selling it.
The full methodology, including what this data cannot tell you. Berkeley Lab only covers 11 states properly, and the site says so on every page where it matters rather than dressing a national average as a local one.
11 states with real local price data
These are the states where enough installations are reported to publish what people locally paid. An 8 kW system, priced and valued locally.
| State | Per watt | System price | Makes | Power price | Payback |
|---|---|---|---|---|---|
| Massachusetts | $3.74 | $29,920 | 10,104 kWh | 30.5¢ | 9.0 years |
| New York | $3.98 | $31,840 | 10,040 kWh | 29.9¢ | 9.7 years |
| Rhode Island | $3.75 | $30,000 | 10,064 kWh | 28.3¢ | 9.7 years |
| California | $4.36 | $34,880 | 12,816 kWh | 33.6¢ | 10.5 years |
| Connecticut | $3.75 | $30,000 | 10,224 kWh | 24.2¢ | 11.0 years |
| Delaware | $3.18 | $25,440 | 10,200 kWh | 18.5¢ | 12.1 years |
| Arizona | $3.62 | $28,960 | 13,504 kWh | 15.4¢ | 12.4 years |
| Wisconsin | $3.73 | $29,840 | 10,048 kWh | 19.1¢ | 13.7 years |
| Texas | $3.46 | $27,680 | 11,112 kWh | 15.9¢ | 13.8 years |
| Florida | $4.08 | $32,640 | 11,408 kWh | 15.0¢ | 16.3 years |
| Oregon | $3.90 | $31,200 | 8,624 kWh | 16.0¢ | 18.9 years |
All 51 states, using the national median where local data is missing
The best state for solar, depending on the question
What each system size costs and returns
| Size | Panels | Price | Makes each year | Year one saving | Payback |
|---|---|---|---|---|---|
| 4 kW | 10 | $15,000 | 5,328 kWh | $930 | 14.1 years |
| 5 kW | 13 | $18,750 | 6,660 kWh | $1,162 | 14.1 years |
| 6 kW | 15 | $22,500 | 7,992 kWh | $1,395 | 14.1 years |
| 7 kW | 18 | $26,250 | 9,324 kWh | $1,627 | 14.1 years |
| 8 kWtypical | 20 | $30,000 | 10,656 kWh | $1,859 | 14.1 years |
| 10 kW | 25 | $37,500 | 13,320 kWh | $2,324 | 14.1 years |
| 12 kW | 30 | $45,000 | 15,984 kWh | $2,789 | 14.1 years |
| 15 kW | 38 | $56,250 | 19,980 kWh | $3,487 | 14.1 years |
| 20 kW | 50 | $75,000 | 26,640 kWh | $4,649 | 14.1 years |
What people ask about solar costs
How much do solar panels cost in 2026?
An 8 kW residential system, about 20 panels, costs roughly $30,000 installed, at a median of $3.75 per watt. That figure is the median of state medians from Lawrence Berkeley National Laboratory's record of host-owned installations for 2024-2025, and it carries no federal tax credit, because the 30% residential credit was terminated for expenditures made after 31 December 2025.
Did the 30% federal solar tax credit end?
Yes. Section 70506(a) of the One Big Beautiful Bill Act amended Internal Revenue Code section 25D so that the Residential Clean Energy Credit does not apply to expenditures made after 31 December 2025. There was no step-down year: the scheduled 26% and 22% rates were struck. Section 25D(e)(8)(A) treats an expenditure as made when the original installation is completed, so a system contracted or paid for in 2025 but finished in 2026 does not qualify.
Can I still get a tax credit if I lease solar panels?
The credit survives under third-party ownership as the section 48E Clean Electricity Investment Credit, but it belongs to whoever owns the equipment, which under a lease or power purchase agreement is the finance company rather than the household. Nothing obliges them to pass it through, so compare the total you will pay over the full term against the cash price of an equivalent system. That credit is also denied to solar placed in service after 31 December 2027 where construction began after 4 July 2026.
How long do solar panels take to pay for themselves?
About 14.1 years on national median figures: an 8 kW system costing $30,000 against first-year savings of roughly $1,859 at the US average residential rate of 17.45 cents per kilowatt-hour (EIA, July 2026). Payback varies far more by state than by anything else, because it is driven mainly by what your utility charges rather than by how sunny it is.
Why do solar cost estimates vary so much between websites?
Because three different things are being measured. Modelled benchmarks describe what an efficient installer's costs ought to add up to and come out lowest, around $2.50 per watt. Marketplace quote averages describe what companies offer when bidding against each other and come out in the middle. Reported installed prices, which is what this site uses, describe what was written on contracts that actually closed and come out highest, at $3.75 per watt.
Does solar pay back faster in sunnier states?
Not usually. Electricity price matters more than sunshine across most of the United States. The spread between the sunniest and least sunny mainland states is smaller than the spread between a good and a bad price per watt, which is why rooftop solar has long paid back faster in expensive New England than in much sunnier parts of the South.
Three competing quotes beat any amount of comparing panel brands
Sales cost and margin are over a third of an installed price, and they are the part that competition removes. A single quote from whoever reached you first is how people end up in the top quarter of what their neighbours paid.
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Prices and rules change. We will tell you when they do
Berkeley Lab publishes installed prices once a year, the EIA updates electricity rates every month, and Congress changed the tax treatment of all of this in 2025. One email when something on this site actually changes, and nothing else.
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Sunlight matters less than you would think
- New Mexico1,729
- Nevada1,689
- Arizona1,688
- Hawaii1,606
- California1,602
- Colorado1,508
Notice how little those two lists overlap. Solar pays back fastest where electricity is expensive, not where the sun is strongest, which is why it has always made more financial sense in Massachusetts than in much sunnier Texas. The sun is free either way. What you are really buying is an exit from your utility’s price list.