Is solar worth it in your state?

A solar system's yearly savings are roughly:

kW installed × kWh per kW in your state × your electricity rate × export credit factor

and the payback is the installed cost divided by those savings, adjusted each year for slowly rising rates and slowly aging panels.

1. Your electricity rate. Every kWh your panels make replaces a kWh you would have bought. At 29.8¢/kWh in California that kWh is worth several times what it's worth at 13.3¢/kWh in North Dakota. This is the biggest lever, because rates vary across states far more than sunshine does.
2. Sun, as kWh per kW per year. A kW of south-facing panels makes about 1,700 kWh a year in Arizona and New Mexico, about 1,200 in Maine and New York, and about 900 in Alaska. That's less than a 2-to-1 spread between the sunniest and cloudiest states in the lower 48.
3. The net metering rule. At midday your panels often make more than the house uses, and the surplus flows to the grid. Under full retail net metering, each exported kWh earns a credit worth the full retail rate. Under net billing, exports earn less, often a fraction of the retail rate. Where there's no statewide rule, the utility decides.

You can't change the first and third, and you can only change the second by picking a better roof. But all three are known before you sign anything.

Our solar payback calculator turns each state's rule into one factor that scales the year-1 savings:

State rule	Factor	Meaning
Retail net metering	1.0	Every kWh the panels make is worth your full rate
Net billing	0.6	Exports credited below retail; you keep most of the value by using the power yourself
Limited or utility-dependent	0.5	Varies by utility, often weak
No statewide rule	0.4	Exports may earn little; value comes mainly from self-use

These are simplifications. Your utility's actual export credit, and how much of your production you use at the moment it's made, set the real number. A household that's home during the day, or that runs a heat pump or charges an EV at midday, keeps more of its solar at the full rate. To test your own export share and credit, use the net metering calculator.

Same system in both states: 8 kW at $3.00 per watt installed, so $24,000 before any state or utility incentive.

Massachusetts. 8 kW × 1,250 kWh = 10,000 kWh a year. Retail net metering, factor 1.0. At 30.5¢/kWh, year-1 savings are about $3,048.00.

Arizona. 8 kW × 1,700 kWh = 13,600 kWh a year, 36% more power. But Arizona uses net billing (factor 0.6), and the rate is 15.0¢/kWh. 13,600 × 0.6 = 8,160 kWh of retail value, about $1,228.08 in year 1.

Spread over 30 years with rates rising 3% a year and panels losing 0.5% a year, the Massachusetts system pays for itself in about 8 years in our model and Arizona's in about 16. The sunnier state produces more and saves less.

The one thing in the example that doesn't come from state data is the installed price. $3.00 per watt is a 2026 average before incentives; quotes of $2.50 or $3.50 move the payback by a few years either way.

We ran the payback calculator's defaults (8 kW, $3.00 per watt, no incentives) for every state with the current rates and rules in our data.

Strongest (payback around 8 to 10 years): Maine, Massachusetts, New York, Rhode Island, New Hampshire, New Jersey, DC, Connecticut and Vermont. What they share is a high rate and retail net metering. None of them is especially sunny. California also lands here, at 29.8¢/kWh: its high rate outweighs NEM 3.0, which credits exports at a fraction of retail. New Mexico gets there the other way, with top-tier sun, retail net metering and a mid-table rate.

Middle (about 11 to 15 years): much of the Midwest and Mid-Atlantic, plus Colorado, Florida, Oklahoma, Oregon, Montana, Wyoming and Alaska. Moderate rates, mostly retail net metering.

Weakest (20 years or more): South Dakota, Tennessee, Kentucky, Louisiana, Alabama, Georgia, Texas, Mississippi, Idaho, Arkansas, Utah, Indiana and the Carolinas. These states combine below-average rates (12.9¢/kWh in Louisiana, 13.4¢/kWh in Idaho) with net billing or no statewide rule. Nevada and Arizona, two of the sunniest states, sit between 16 and 20 years for the same reason.

Hawaii is the outlier: the highest rate in the country (47.2¢/kWh) but no net metering for new systems, so our model values 12,000 kWh a year at about $2,264.64, roughly 10-year payback. That is why pairing the panels with a battery, to use the power at home instead of exporting it, deserves a close look there.

These groupings will drift as rates change month to month; the calculator always uses the latest rate.

• Incentives. The federal residential clean energy credit (25D) ended for systems installed after December 31, 2025, so our numbers don't include it. Many states and utilities still offer rebates, performance payments or property-tax exemptions. Enter any you qualify for in the calculator's incentive field.
• Financing. A loan adds interest; a lease or power purchase agreement changes the math entirely. Compare both in the lease vs buy calculator.
• Your roof. East and west roofs produce about 13–14% less than south-facing ones in our solar output calculator, north roofs about 35% less. Shade can cut more.
• Fixed charges. Solar reduces the kWh you buy, not your utility's fixed monthly customer charge.
• Rate changes. We assume rates rise 3% a year. If your utility changes its export rule after you install, check whether existing systems are protected (grandfathered) for a set number of years.

A rough rule from the state results: solar tends to be a strong investment when your rate is above about 20¢ per kWh and your utility credits exports at retail, and a slow one when your rate is below about 15¢ and exports are credited at a fraction. Between those, the details decide it: your real rate, your daytime use, your roof and the quote you get.

Before you talk to an installer, size the system to your use. Twelve months of bills give you your yearly kWh; divide by your state's kWh per kW and you have the system size that covers it. The panels needed calculator does it for you, and a quote much larger than that number deserves a question.

• Solar payback: payback and 25-year savings with your state's rate, sun and net metering rule.
• Net metering savings: what your utility's export credit costs you per year.
• Solar panels needed: system size and panel count from your yearly kWh.
• Solar lease vs buy: ownership against a lease or PPA.