An honest look at rooftop solar

In 2010, fewer than 100,000 US homes had rooftop solar. Today, it's above 6 million. The growth has been driven by falling costs, aggressive installer marketing, and in some states, strong utility incentive programs. California led early and still accounts for a large share of total installs, but growth has spread significantly. Florida, Texas, New York, and Massachusetts have all become substantial markets.

You may have seen the statistic that solar panel prices have fallen 90% since 2010. That's true for the panels themselves. But what you actually pay for an installed system includes a lot more: labor, permits, an inverter, racking hardware, interconnection fees, and the installer's margin. Those costs haven't fallen nearly as fast.

Until about 2014, install prices fell sharply as Chinese manufacturing scaled dramatically and reduced the cost of the panels themselves, bottoming out around $3.46/W in 2019. However, since 2020, costs have stalled and even partially rebounded. Tariffs on imported panels, post-COVID labor inflation, and component shortages all pushed installed prices back up. The panel hardware kept getting cheaper, but everything around it got more expensive. By 2023, the median installed price had climbed back to around $4.25/W, erasing several years of progress. And the federal 30% tax credit ended for systems installed after 2025, raising the effective price of solar again.

The useful way to measure a location's solar potential is production: how many kilowatt-hours a fixed 1KW panel generates in a year. This depends on when the sun is up, but also how high it is in the sky. The map below shows that number across the country. A kilowatt of panels in Arizona produces about 1,900 kilowatt-hours a year, while the same panel in western Washington produces closer to 1,100.

The seasonal changes in sunshine also make a big difference, and winter is where regions really separate. Summer days are long everywhere in the US (and actually longer in the north), so a July day in Minnesota isn't actually far behind a July day in Texas. Winter is a different story: short days and indirect sun cut northern production to a quarter or less of its summer peak, while the desert Southwest still produces more than half of its peak. Click a state on the map to see its monthly profile. That shape matters later, when your utility's billing policy decides what your summer surplus is worth.

Production alone doesn't determine payback. It also matters how much money each kilowatt-hour of solar production saves you, which depends on what you currently pay for electricity. For example, a panel in Massachusetts produces about a third less than one in Arizona, but residential electricity rates there run around $0.30/kWh, roughly double Arizona's. The result is comparable payback periods despite less sun.

Another important factor is how electricity rates change over time, since rising rates make the case for solar stronger. Rising costs are a favorite installer pitch, and the data partly backs it up: for decades power prices mostly just tracked inflation, but since 2021 rates in much of the country have outpaced it, pushed by grid upgrades and growing demand. Either way, installing solar "locks in" the cost of the power you generate and protects against future spikes. In the figure below, you can compare average power prices by state and how they have changed over time.

What your exported power is worth comes down to which of two billing models your utility uses.

Net metering is the most generous arrangement: exported power is credited at the full retail rate, as if your meter simply ran backwards. Export 10 kWh at noon, import 10 kWh that evening, and the two cancel out. Your bill only reflects your net consumption, meaning that the timing doesn't impact your bill at all. Often, in summer months people on net metering plans have negative energy bills, which carry over into the winter months when generation is less.

Net billing is where you are paid a different rate for exported power: you still pay full retail for everything you use from the grid, but exports earn a fixed lower rate. With net billing, it's more important to optimize your system size to minimize how much power is going to the grid.

The figure below shows a typical day with solar, and shows you how the generation and usage times vary quite a bit. You can compare how the billing looks on both types of plans.

The map below shows where each state lands, but treat it as a starting point: policies differ between utilities in the same state, and not all net billing plans are created equal. Some utilities set export rates near retail, which is very close to net metering. Others credit exports at a fifth of the retail price or less, which makes surplus production nearly worthless and works better with a smaller system, a battery, or both. To check your own situation, the DSIRE database (dsireusa.org), maintained by NC State University, is the most complete reference for solar policy by state and address.

Beyond the time of day, seasonal timing matters as well if you are on a net billing plan. In Arizona or Texas, peak solar production (midday in summer) coincides with peak electricity demand from air conditioning, both in terms of time of day and season. Your panels are generating the most when you need power most. In cold climates the relationship inverts: heating demand peaks in winter mornings and evenings, when solar is not produced. Solar still offsets summer cooling loads in cold climates, but it can't directly address the hours when the grid is under most stress or when your bill is highest.

During peak sun hours, solar systems generate much more power than you will likely use, but will produce nothing at night. The math for the power you use directly is simple: you just don't pay for it. If your system has a battery, you can store some of this extra power to use later, but typically batteries are not large enough to store all the extra generation. For exported power, the value depends on your utility, as we cover in the next section.

The other side of the value equation is how much it actually costs to install solar. To determine the cost, you'll need to know how much solar you plan to install. Systems are typically sized to offset most of your annual consumption, but you may want to go smaller if you are in an area with low export credits. To give a very ballpark estimate, the average US home uses around 10,500 kWh per year, which takes roughly 7 kW of panels in most of the country. At $4/W, that's about $28,000 installed.

Another factor is incentives. The federal 30% tax credit ended for systems installed after 2025, but state and utility programs still exist and can meaningfully change the math. They come in several forms: upfront utility rebates, state tax credits, property and sales tax exemptions, performance payments (SRECs) in a handful of states, and battery-specific programs. The DSIRE database mentioned earlier (dsireusa.org) lists what applies at your address, and your utility's website is worth checking directly for rebates. Installers usually know the local programs and fold them into quotes, but verify anything a salesperson claims against the actual program terms.

If your billing policy makes a battery worthwhile or you are interested in having backup power in a power outage, add $8,000–12,000 for a typical 10 kWh battery.

The basic math is pretty simple: take the cost and how much it saves you each year, and see how many years it takes to recoup the investment. After that point, the solar is making free money, but it can take a long time to get there. If you are not planning to stay at your current house that long, solar may not make sense: it does increase home values on average, but usually by less than the system cost (more on that in the ownership section below).

Beyond the simple cost vs savings math, also consider price certainty and reduced risk. Buying solar effectively prepays years of electricity at a known price, and as we saw earlier, US residential rates have been climbing faster than inflation in recent years. If that continues, every rate increase makes your panels worth more and pulls payback closer. It is still a bet, though: if rates flatten out in your region, the hedge is worth less, and solar doesn't touch the fixed charges on your bill.

The math also improves if you're electrifying anything else. An EV or a heat pump raises your consumption, and every added kilowatt-hour is one you generate instead of buy. If either is in your plans, size for it. (Our EV guide covers the vehicle side of that math.)

Use the calculator below to adjust inputs to your situation. Switch between net metering and net billing to see how much your utility policy matters, then add a battery to see whether storage changes the picture.

There's one more comparison worth running: what if you invested the money instead? Investments are judged against alternatives of similar risk. Solar's bill savings are dependable but not risk-free — inverters fail, policies change, people move — which puts them closest to a conservative mix of stocks and bonds. The blue line below is that mixed portfolio; the green line is solar, starting in the hole by the cost of the system and climbing as each year's savings accumulate. Crossing zero is your payback point. In most states, solar holds its own against the portfolio, and it's the steadier of the two paths.

Manufacturing solar panels requires energy and has a real upfront carbon cost. But compared to almost any other low-carbon technology, solar pays it back extraordinarily fast. For most of the continental US, the carbon payback period is under 18 months: as short as 9 months in coal-and-gas-heavy grids like Colorado and the Central Plains, and around 16 months in cleaner grids like California and New England. After that, the panels generate essentially carbon-free electricity for another 25 years. No power plant of any kind amortizes its construction emissions that quickly. A nuclear plant takes 4–8 years just to clear its construction carbon debt; a gas plant never does.

The size of the ongoing emissions benefit depends on what your grid would have burned instead — and in most of the US, the answer is natural gas. Gas peakers are the marginal generators: the plants that ramp up and down to balance supply and demand, and that back off first when solar generates. So when your panels produce, a gas plant somewhere is running less. That’s why even grids with significant wind and nuclear have relatively high marginal avoided emissions: gas is still what’s on the margin.

The exception is grids with very high solar penetration, where California is the main example. When the grid is saturated with solar at midday, additional rooftop panels displace other clean sources rather than gas, or get curtailed entirely. These effects are included in the data: EPA’s AVERT tool derives its avoided rates from actual historical dispatch, so curtailment hours are already reflected. California’s 472 kg CO₂/MWh is noticeably lower than the national average (636 kg CO₂/MWh), and the map shows that directly. The emissions case for solar is strongest in fossil-heavy grids, which aren’t always the same states where the financial case is strongest.

Despite this, rooftop solar is one of the pricier ways to build clean energy. A utility-scale solar farm costs around $1 per watt to build versus roughly $4 on a roof, so measured purely in clean kilowatt-hours per dollar, big solar farms re substantially cheaper. However, with rooftop solar, much of the power is generated where it's used, avoiding added transmission and grid congestion. This is an important benefit since electrification of more sectors is putting more pressure on the grid .

The payback math earlier assumes you pay cash. Many people don't, and the financing route you take can eat a large share of the savings.

Solar loans are the most common option, and they carry a trap that has become standard industry practice: the dealer fee. To offer you a low advertised interest rate, the lender charges the installer an upfront fee, often 15–30% of the system price, and the installer folds it into your quote. The same system can cost $28,000 in cash and $35,000 financed, and nobody will volunteer the difference. Always ask for the cash price, even if you intend to finance. It's the only way to see what you're actually paying for the money.

Leases and power-purchase agreements (PPAs) put a third party's panels on your roof; you pay a monthly rate for the power. With the residential tax credit gone, installers are pushing these harder, since the leasing company can still claim a separate commercial tax credit on the system, at least for the next couple of years. That credit doesn't have to be passed through to you, and often isn't fully. A lease can still beat doing nothing if the rate is right, but watch for annual escalator clauses (typically 2–3% per year) that erode your savings over time, and know that a lease complicates selling your house.

A reasonable rule: get the cash price first, and judge any financing offer by how far it drifts from it. If the only way solar fits your budget is a high-rate loan or a lease with an escalator, waiting is a legitimate answer. Equipment keeps improving and batteries keep getting cheaper.

Solar panels are typically warrantied for 25 to 30 years, with a guarantee of something like 80–90% of rated output at the end of the term. Field data suggests that's conservative. Real-world degradation runs around half a percent per year, panels rarely fail outright, and arrays installed in the 1980s are still producing today. Panels don't die at the warranty date; they fade slowly. A system installed now will plausibly still be generating most of its rated power in the 2050s, and every year past payback is close to free electricity. With no moving parts and no annual servicing, a solar array has a longer useful life than almost any other major home improvement.

Maintenance is also minimal. The inverters that convert the panels' output into household power are now usually per-panel microinverters with 25-year warranties, so for most systems there is nothing to service or replace on a schedule. The exception is the older string inverter design, a single central unit for the whole system. It's uncommon in new home installs, but it typically lasts 10–15 years and costs $1,500–3,000 to replace, so if one shows up in your quote, factor that into the payback math.

The other thing that may not last is your installer. 2024 saw a wave of major failures, including SunPower, Titan Solar, and ADT's solar arm, and a workmanship warranty is only as good as the company behind it. Panel and inverter manufacturer warranties survive an installer bankruptcy, but this won't typically cover labor costs if something needs to be replaced.

Not by itself, and this surprises a lot of owners: grid-tied solar shuts off automatically during an outage to protect utility line workers, so even if the sun is shining, you will not get backup power without a battery and the proper hardware to isolate you from the grid. With outages becoming more frequent in much of the country, a solar-charged battery does have real value that never shows up in bill math, and unlike a generator it refuels itself every sunny day. But if backup power is the only thing you're after, a standalone generator is usually the cheaper way to get it.

An owned system generally helps a sale and increases sale price. Studies find a meaningful price premium for homes with owned solar, though usually less than what the system cost new. A financed system is workable as long as the loan is paid off at closing, so check whether your lender filed a lien against the property, since it will surface in the title search. A leased system is the real complication: the buyer has to qualify for and agree to assume the lease, and plenty of deals have died over it. If there's a realistic chance you move within the lease term, that's a stronger argument against leasing than any monthly-savings pitch is for it.

The bottom line is that solar is a large financial decision, and it doesn't make sense for everyone. Whether it works for you comes down to what you pay for electricity, your utility's export policy, how long you plan to stay, and how you'd pay for the system, more than how sunny your state is. When those line up, it's a sound investment that also builds real clean energy: panels that repay their manufacturing emissions in under two years and then displace gas from the grid for decades. When they don't, waiting is a fair answer, and community solar or a green power plan capture some of the same benefits without the roof.

To pull it all together, the figure below combines everything we've covered — production, electricity rates, export policy, and install cost — into a look at the best and worst states to install solar.

Putting panels on your roof isn't the only way to put money behind clean energy, and the options below aren't either-or: several of them combine. Whether or not rooftop makes sense for you, three are worth knowing about.

Community solar is the closest relative. You subscribe to a share of an off-site array and receive credits on your electricity bill for its production, typically saving 5 to 15 percent with no upfront cost and no roof involved. It's the natural choice for renters, shaded roofs, and anyone who wants the bill benefit without owning equipment. The caveats: it's only available in states with enabling laws, the savings are modest next to owning panels outright, and cancellation terms vary between providers, so read them before signing. Installers rarely bring it up, since they only get paid when panels go on your roof, but it's the right answer for a lot of people who would otherwise be told they're not a good fit.

A 100% green energy plan is the most accessible option: no roof, no state law, no capital required, so nearly every household can do it. Your utility or a retail supplier matches your usage with renewable energy certificates, sometimes at no extra cost and often for a modest premium that flows to renewable generators. That's a worthwhile thing to pay for. Just know what the money does: many plans buy certificates from wind and solar farms that already exist, which supports those projects without necessarily causing new ones to be built. Plans tied to commitments to build new capacity do more, and they're worth seeking out when you have the choice.

Investing in solar projects runs the other direction entirely: instead of cutting your bill, you put money into someone else's array and collect a return. Crowdfunding platforms like Energea let you buy into utility-scale and commercial projects for as little as $100, with returns paid out of electricity sales; advertised targets run in the high single digits. Because your capital helps finance new construction, the climate case is strong. The financial case needs the same scrutiny as any private investment: projected returns aren't guaranteed, the investments are less liquid and less regulated than public markets, and the fair benchmark is the same one from the calculator section, whether the money would do better in an index fund. Treat it as investing with a climate tilt, not as a substitute for lower bills.