The 30% federal tax credit died on December 31, 2025, and that changes the answer for everyone who didn't sign before the deadline. A $200-a-month electric bill needs about a 10.4 kW system costing roughly $27,100 in 2026; it saves about $2,400 the first year and pays back in about 11 years, down from under 8 with the credit. Still profitable over 25 years, but no longer a reflex. Here's the full math so you can judge your own roof.
The One Big Beautiful Bill Act, signed July 4, 2025, terminated the Section 25D residential clean energy credit for systems placed in service after December 31, 2025. There was no phase-down; the credit that had covered 30% of residential solar since 2006 simply stopped. Industry analyses of the change note it was an abrupt end rather than a glide path, and homeowners now pay full freight unless state or utility money steps in.
Three pieces survived. Commercial-scale credits under Section 48E continue, and since leased systems and power purchase agreements are owned by the installer, third-party ownership can still capture them; expect installers to push leases harder in 2026. Some state credits persist, New York's 25% up to $5,000 among them, and utility rebate programs are unchanged. The calculator on this site takes any credit as an input so you can model your state's actual stack.
The chain of arithmetic is short. Monthly kWh = bill ÷ rate. A $200 bill at the national average residential rate of 17.45 cents per kWh (EIA, January 2026) is 1,143 kWh a month, 13,714 kWh a year. System size = annual usage ÷ (peak sun hours × 365 × 0.80), where the 0.80 performance factor covers inverter conversion, wiring resistance, soiling, heat derating, and snow. At 4.5 daily sun hours, roughly the Southeast and Midwest average, that's 13,714 ÷ 1,314 = 10.4 kW, or 25 panels at 425 watts.
Sun hours are the whole variable. The same bill in Phoenix needs about 8.5 kW; in Seattle, closer to 12. The regional table in the solar calculator maps it out. Your actual bill's rate matters just as much, and not only through the division: high-rate states make every produced kilowatt-hour worth more, which is why New England and California paybacks run years faster than the national average despite their clouds.
Hardware keeps getting cheaper even as subsidies fall away. The national average installed price is about $2.58 per watt in 2026, ranging $2.53 to $3.66 by state and system size, down from over $3.50 as recently as 2022. The 10.4 kW system above prices out at $27,136 before any state credit. EnergySage's marketplace average, skewed toward larger systems, sits near $31,000 for 12 kW.
One caution about quote-shopping: per-watt prices fall with system size, so a 6 kW quote won't extrapolate linearly to 12. And the lowest per-watt bid sometimes omits the rapid shutdown devices, monitoring, or roof-flashing work the mid-tier bid includes. Compare line items, not slogans.
| 2026 install (no credit) | 2025 install (30% credit) | |
|---|---|---|
| Gross cost, 10.4 kW @ $2.60/W | $27,136 | $27,136 |
| Net cost after credit | $27,136 | $18,995 |
| Year-one savings | $2,400 | $2,400 |
| Payback (3% escalation, 0.5% degradation) | ~11 yrs | ~8 yrs |
| 25-year cumulative savings | ~$81,800 | ~$81,800 |
| Net 25-year gain | ~$54,700 | ~$62,800 |
The savings column is identical because the panels don't know what you paid. Rates rising 3% a year compound against your fixed system, and the same kilowatt-hours that offset $2,400 in year one offset about $4,450 by year 20. The credit's disappearance costs you three payback years and about $8,100 of lifetime net, which is real but not fatal: the system still returns roughly three times its cost over 25 years.
Cheap power states with modest sun stretch unsubsidized payback into the mid-teens. Roofs needing replacement inside 10 years should get their shingles first; removing and reinstalling panels costs thousands. Heavy shade, or a north-only roof plane, sinks the production math. And if you're likely to move within the payback window, you're buying a resale feature, not savings.
Your bill, rate, and sun hours in; system size, cost, payback, and 25-year net out, with any state credit modeled.
Solar Savings Calculator →No, not for homeowner-owned systems. The Section 25D residential clean energy credit, worth 30% with no cap, terminated December 31, 2025 under the One Big Beautiful Bill Act, with no phase-down. Only systems placed in service by that date qualify. Third-party-owned systems (leases and power purchase agreements) can still access commercial credits through the installer, which is why those routes deserve a fresh look in 2026.
About 25 panels. A $200 monthly bill at the national average rate of 17.5 cents per kWh is roughly 13,700 kWh a year, which at typical US sun levels (4.5 peak sun hours, 20% system losses) requires about 10.4 kW of capacity. At 425 watts per panel, that's 25 panels and about $27,100 at the 2026 average of $2.60 per watt.
In 2026, without the federal credit, 9 to 13 years is the national norm. Under 10 years in sunny states with expensive power, mid-teens in cheap-power states with gray skies. Since systems produce for 25 to 30 years, anything under 15 years still nets a positive lifetime return; the question is how positive.
Owned systems generally do, by measures near $4 per watt in multiple market studies, while leased systems appraise closer to neutral since they're a liability transfer at sale. In 2026 the value bump is complicated by the missing federal subsidy: buyers can no longer claim their own credit later, so some of the premium that existed during the credit years has likely compressed. An owned, paid-off system with transferable monitoring is still a selling point.
The payback clock resets for whoever buys the house. If you might move within the payback window (9 to 13 years in 2026), solar is a bet on the home's resale premium holding up, not on bill savings you'll personally collect. That's the single best argument for sizing a system to your actual usage rather than maxing the roof.