Is Solar Worth It? It Depends on Your State.

Two households with identical 7 kW solar systems can see payback periods that differ by 8 years, based entirely on where they live. One might recover their investment in 7 years. The other might wait 15. Same panels, same installer quality, wildly different math.

The four variables that drive that spread are electricity rate, peak sun hours, net metering policy, and available incentives. Each state has a different mix of all four.

What actually moves the payback number

Electricity rate is the single biggest lever. A system in California ($0.28/kWh) saves more per kilowatt-hour produced than an identical system in Louisiana ($0.11/kWh). The payback math reflects that directly.

Sun hours determine how much electricity the system produces. Phoenix gets roughly 2,100 peak sun hours per year; Seattle gets closer to 1,100. A 7 kW system in Phoenix produces nearly twice the electricity of the same system in Seattle.

Net metering policy determines what you earn when your panels produce more than you consume. Full retail net metering (Florida, Colorado) means excess power earns the same rate you pay for grid power. Avoided-cost net metering (California under NEM 3.0) means excess power earns a fraction of that. The gap can cut the value of exports by 75%.

Incentives reduce net cost. The federal 30% Investment Tax Credit (ITC) applies everywhere, but state and utility incentives vary significantly. Some states add rebates, tax credits, or sales/property tax exemptions that shift the math materially.

State-by-state breakdowns

Each article below covers the current electricity rates, sun hours, net metering rules, available incentives, and a realistic worked payback example for that state, with all sources cited and dated.

FAQ

Why does solar payback differ so much by state?

Four factors drive it: your electricity rate (what solar offsets), local sun hours (how much the system produces), the net metering policy (what exported power earns), and the incentives you qualify for. A high rate plus strong sun plus full net metering can mean a 6 to 8 year payback; the opposite can push it past 15 years.

Which states have the best solar payback?

Generally, high-electricity-rate states with good sun and favorable net metering. But the honest answer depends on your exact rate, roof, and usage. The Solar ROI calculator below models those inputs directly.

Data sources: the rate, sun hour, net metering, and incentive figures above are rounded illustrations drawn from EIA (electricity rates), NREL (sun hours), and DSIRE (net metering and incentives), current as of 2026. Each linked state guide carries its own dated, sourced figures. Energy rates and incentive programs change; verify current numbers for your state before deciding.