Will solar pay for itself on your roof?
Sample dataThis is the first full year without the federal residential credit, and most solar payback numbers on the internet have not caught up. Put in what the system actually costs you, what it actually saves at your rate, and see the real payback — with the federal credit line where it belongs, at zero.
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Up to 30.
Break-even, paid in cash
Month 103 (8 yr 7 mo)
After 25 years: $55,760 ($77,060 of bill saving)
Below the dashed zero line you are still behind; above it the upgrade has paid for itself.
How this works
- THE CREDIT IS ZERO. The Residential Clean Energy Credit (section 25D) is not available for any property placed in service after 31 December 2025 (IRS). A cash or loan purchase in 2026 gets $0 from it. Enter the net cost as the full cost, because there is nothing to subtract.
- The net cost should be the number on your quote, less any state or utility incentive you have actually confirmed — not a federal credit, and not a projected one.
- For the monthly saving, start from what your array would produce and what you pay per kilowatt-hour. NREL's PVWatts model gives production for your location, roof direction, pitch and shading, free and public, and it is what our production tool uses. Your rate is on your bill; your state's average is published monthly by the EIA.
- The annual increase is the rate at which you expect electricity prices to rise, because that is what the saving is worth more of each year. It is the single most optimistic assumption in any solar pitch — 2.5% is defensible, 5% is a sales number.
- If you are financing, put the real APR and term in, and remember that a solar loan's advertised rate often comes with a dealer fee folded into the cash price. Ask for the fee as a dollar number and for the price without financing.
- What this does not model: degradation of about half a percent a year, inverter replacement somewhere around year 12 to 15, what your utility actually pays for exported power, or what happens to a lease when you sell the house. The net-metering tool covers the export question state by state.
- The tool projects month by month, not year by year, so the break-even point is a month you can point at rather than a rounded year.
- Every input on this page is editable. The numbers it opens with are honest starting points, not a quote and not a prediction — change them to your own and the answer changes with them.
- If you finance, the comparison is against everything you pay on the loan, principal and interest, not against the sticker price. That is usually the number the monthly payment is designed to obscure.
- Nothing you enter leaves your device.
Sources
- IRS: Residential Clean Energy Credit — "The credit is not available for any property placed in service after December 31, 2025."
- NREL Developer Network: PVWatts v8 API documentation
- NREL: PVWatts Calculator
- U.S. Energy Information Administration: Electric Power Monthly, average retail price of electricity by state and sector
- U.S. Department of Energy: Homeowner's guide to going solar
- NREL: PVWatts solar resource data and NSRDB background
- IRS: Home energy tax credits
- IRS: Energy Efficient Home Improvement Credit (section 25C)
- Expert review
- Not yet reviewed
- Last verified
- September 18, 2026
A projection from assumptions you control, not a prediction and not a quote. The opening numbers are starting points, not sourced prices — change them to your own. Nothing you enter leaves your device.
Common questions
Why is the federal credit zero?
Because it ended. The IRS states that the Residential Clean Energy Credit "is not available for any property placed in service after December 31, 2025". A purchase in 2026 gets nothing from it. Any payback figure you have been shown that assumes 30% back is wrong, and it is usually the number the whole pitch rests on.
Does a lease or PPA still get a credit?
The company that owns the system may be able to claim one under a different part of the tax code, because it owns the equipment. You do not — you are buying electricity or renting hardware. That asymmetry is now a major sales argument, and it is worth seeing clearly: it is the provider's benefit, not yours, and it should show up as a better price rather than as a reason to choose the structure.
What escalation rate should I use?
2.5% is a defensible long-run assumption for residential electricity. Anything approaching 5% is a sales input rather than a forecast, and because it compounds over twenty-five years it is the easiest way to make a bad payback look good. Try it at 2% and at 4% and see how much the answer moves — if the decision flips, the decision was never solid.
Is this the same as PVWatts?
It uses PVWatts for production, which is NREL's own model and free to the public. What we add is the money side at your actual rate with the credit at zero. You can and should run PVWatts yourself — it is linked here — and check our numbers against it.
What does the will solar pay for itself on your roof? do?
Estimate annual production for your location, roof direction, pitch and shading using NREL's PVWatts model, then show first-year bill offset, simple payback and twenty-five-year net at the price you actually pay for power — with the federal Residential Clean Energy Credit line shown explicitly at $0, dated, and cited to the IRS, because it is not available for property placed in service after 2025-12-31.
Where do the numbers come from?
Until this tool is reviewed it uses sample assumptions. The sources it will cite are listed on this page.
Related guides
- Are solar panels worth it in the first year without the credit?The honest 2026 arithmetic: production from NREL's own model, your real electricity rate, and the federal credit at zero. Sometimes yes, sometimes clearly not.
- How long do solar panels last, and what fails first?Panels degrade slowly and outlive their warranties. The inverter is usually the first real cost, and the roof underneath is the one people forget.
- What happened to the federal solar creditThe Residential Clean Energy Credit ended for property placed in service after 31 December 2025. What that means for a 2026 purchase, and what still exists.
- Your solar installer has gone. What now?An orphaned system still works. Who honours the equipment warranty, what the workmanship warranty is worth now, and how to find someone to service it.
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