Begin with electricity use
Gather a full year of electricity usage from your bills. Compare the proposed system size and the installer’s production estimate with your actual consumption, rather than choosing a panel count from a photo.
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SolarSolar panel cost in 2026, now that the tax credit is gone
The 30% federal residential credit expired on 31 December 2025. Most calculators still subtract it, which makes solar look several thousand dollars cheaper than it is. This one does not — and it checks your roof age, because that is the other number nobody mentions.
Rates and rules reviewed August 2026
See the illustrated project guide
Written and maintained byMantu Kumar
Evidence review4 August 2026
Calculation rulesRead the methodology
Quality standardEditorial policy
Check the date on any solar quote you have been given
Section 25D was repealed by the One Big Beautiful Bill Act, signed 4 July 2025, and expired at the
end of that year. A homeowner buying with cash or a loan in 2026 receives $0 in federal
tax credits. If a quote or an online calculator still shows “after 30% federal
credit”, it is working from last year's rules and the real number is roughly 30% higher.
Solar cost and payback estimate
No email · nothing sentA closer look at your project
Picture the whole solar project
An array is easy to count in a photo. Its suitability and expected output depend on details that a photograph cannot establish.
The three detail views below enlarge parts of the same photograph. Use them with the planning checks. Photos are AI-generated illustrations, not installation instructions or actual claim records.
Separate the roof from the array
Ask whether the roof needs work first and who pays to remove and reinstall panels if roof replacement becomes necessary later. Include that scope in the comparison.
Check what changes the payback
Compare the assumptions for shade, generation, electricity price and exported power. This page’s payback is a model; it cannot inspect your roof or verify your utility agreement.
Before comparing totals, ask for these details
- Equipment
- Panel and inverter models; whether battery storage is included
- Property work
- Mounting, roof preparation and any electrical upgrades
- Savings assumptions
- Annual output, household usage and utility export terms
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On this page
What happened to the 30% credit
The Residential Clean Energy Credit, Section 25D of the tax code, paid 30% of a home solar system back as a federal tax credit. Under the Inflation Reduction Act it was scheduled to run at 30% through 2032, then step down to 26% and 22%.
The One Big Beautiful Bill Act — Public Law 119-21, signed 4 July 2025 — repealed it roughly seven years early. Expenditures for residential solar made after 31 December 2025 do not qualify, and the IRS treats an expenditure as made when installation is complete. A signed contract or a paid deposit in 2025 was not enough; the system had to be finished and operational.
| How you pay | Federal credit in 2026 | Who claims it |
|---|---|---|
| Cash | $0 | Nobody |
| Solar loan | $0 | Nobody |
| Lease | 30% under Section 48E | The provider, not you |
| PPA | 30% under Section 48E | The provider, not you |
Section 25C went the same way
The efficiency credit that covered heat pumps, windows and insulation also expired at the end of
2025. If you are pricing several projects at once, the same warning applies to all of them —
see the HVAC estimator and window estimator.
What solar costs per watt
Solar is priced in dollars per watt of installed capacity, which is the only way to compare quotes for systems of different sizes. Divide any quoted total by the system wattage and you have the one number that matters.
| System size | At $2.58/W | At $3.20/W | Suits |
|---|---|---|---|
| 4 kW | $10,300 | $12,800 | Small home, low usage |
| 6 kW | $15,500 | $19,200 | Modest usage |
| 8 kW | $20,600 | $25,600 | Common size |
| 10 kW | $25,800 | $32,000 | Average home |
| 12 kW | $31,000 | $38,400 | The average quoted system |
| 15 kW | $38,700 | $48,000 | Large home or EV charging |
Why the same system costs different amounts
State. The spread runs from about $2.35 per watt in Texas to $3.18 in New Hampshire. That is labor, permitting and local competition, not sunshine.
System size. Bigger systems cost less per watt because permitting, design and crew mobilisation are fixed costs spread over more panels. A 4 kW system might run $2.80 per watt while a 15 kW system drops to $2.42. Past roughly 12 kW the effect flattens out.
Roof surface. Asphalt shingle is the cheapest to mount on. Metal, tile, flat and slate roofs add roughly $0.10 to $0.30 per watt.
What you are actually buying. The panels themselves are only around 12% of the total. The rest is inverters, racking, wiring, permitting, design, labor and the installer's overhead. That is why cheap panels do not make a cheap system.
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Sizing a system
System size follows your electricity usage and your local sun, not your house size. A large, efficient home can need a smaller array than a small, leaky one.
The average US household uses around 10,000 kWh a year and needs roughly 7.5 kW to offset it. EnergySage reports the average quoted system is closer to 12 kW, because the people getting quotes tend to use more than average.
| Region | Peak sun hours | kW for 10,000 kWh |
|---|---|---|
| Southwest — AZ, NM, NV | 6.0 | 5.7 kW |
| South — TX, FL, GA | 5.2 | 6.6 kW |
| National average | 4.7 | 7.3 kW |
| Midwest — IL, OH, MI | 4.4 | 7.8 kW |
| Northeast — NY, MA, NJ | 4.0 | 8.6 kW |
| Northwest — WA, OR | 3.7 | 9.3 kW |
The roof problem nobody prices in
Panels last around 27 years. An asphalt shingle roof lasts around 28. If your roof is already fifteen years old when the array goes on, those two numbers collide about a decade from now.
When the roof is replaced, the array has to come off and go back on. That runs several thousand dollars on a typical system — before the roof itself. It is the most expensive avoidable mistake in residential solar, and it is invisible at the point of sale because the solar company is not selling you a roof.
The rule of thumb
Fewer than ten years of roof life left, replace the roof first. Ten to fifteen years, get the roof
inspected and make a deliberate decision. More than fifteen, go ahead. Doing the roof while it is
bare is always cheaper than doing it around an installed array.
The estimator above flags this automatically from the roof age you enter. If it fires, price the roof properly first — the roof estimator works out cost by the square, with the insurance split, and the full roof guide covers material lifespans.
Is solar still worth it without the credit
Honestly: it depends far more on your electricity rate than on the credit ever did.
Solar economics are driven by what you stop paying the utility. In a state at 30¢ per kWh, a system pays back inside the panel warranty even at full price. In a state at 11¢ with poor sun, payback can now stretch past fifteen years — which is a genuinely different proposition from the one being advertised through 2025.
What has not changed is that the savings are real and long. Panels carry 25-year production warranties and typically keep working past that. What has changed is the shape of the deal: no 30% check from the government, and therefore a longer wait before the system is ahead.
What is still available
- State and utility incentives. These vary enormously and are now the main lever. South Carolina, for example, runs a 25% state credit capped at $35,000. DSIRE lists them by state.
- Net metering. How much your utility credits you for exported power matters as much as the system price. It is being reduced in several states, so check the current rules, not last year's.
- Property tax exemptions. Many states exempt the added home value from property tax, which is quiet but worth real money.
- Lease and PPA. The only remaining route to a federal credit, though the provider claims it.
Solar result summaryCompare quotes in dollars per watt, but judge value with production, roof timing, inverter scope, utility assumptions and payback together. The federal residential Section 25D credit is not available for expenditures after December 31, 2025; state and utility programs still vary by location.
Questions
Is there still a 30% solar tax credit in 2026?
Not for homeowners buying with cash or a loan. Section 25D expired on 31 December 2025 under the One Big Beautiful Bill Act. The commercial credit under Section 48E survives, so a lease or PPA provider still claims 30% and may pass it through as a lower rate.
How much do solar panels cost in 2026?
About $2.58 per watt on marketplace quotes, with a state spread of roughly $2.35 to $3.18. A 10 kW system runs about $25,800 and a 12 kW system about $30,500, before any state incentive and with no federal credit to subtract.
What size solar system do I need?
It follows your annual kWh and your local sun, not your house size. The average US household uses about 10,000 kWh a year and needs roughly 7.5 kW. The same usage in the Northwest needs closer to 9.3 kW because there is less sun to work with.
Should I replace my roof before installing solar?
If it has under ten years left, almost certainly. Panels last around 27 years, and taking an array off and putting it back costs several thousand dollars on top of the roof. Replacing a bare roof is always cheaper.
Is a solar lease better now the credit is gone?
It is the only remaining path to a federal credit, but the credit belongs to the provider. You do not own the system, contracts typically run 20 to 25 years, and many include an annual escalator that raises your rate. It suits people with little tax liability, but it is not free money.
Does solar increase home value?
Owned systems generally do. Leased systems are more complicated, because a buyer has to be willing to take over the contract, and some walk away rather than do so. That difference is worth weighing before signing a 25-year agreement.
Does homeowners insurance cover solar panels?
Roof-mounted panels are usually covered under the dwelling as part of the structure, subject to your deductible and the same covered-peril rules as the roof itself. Tell your insurer the system exists — it raises the replacement cost of your home, and an unreported array can complicate a claim. How coverage actually works applies here too.
What is a good price per watt?
Below $2.80 is competitive in most markets. Around $3.00 to $3.30 is normal in high-cost states or on difficult roofs. Above $3.50 needs a specific explanation — tile roof, long conduit run, panel upgrade — and if there is not one, get another quote.
Related
- Roof replacement cost — price the roof first if it has under ten years left
- Taxes and financing — how people pay for work like this
- HVAC replacement cost — Section 25C expired the same day
- What insurance actually pays — ACV, RCV and claims
Where these figures come from
Per-watt pricing is cross-checked against EnergySage marketplace data, published state ranges and
the Lawrence Berkeley National Laboratory Tracking the Sun release of October 2025. Tax treatment
reflects the One Big Beautiful Bill Act, Public Law 119-21. Payback assumes 2.5% annual utility
rate rises and 0.5% annual panel degradation — both are assumptions and your utility may
behave differently. This is an estimate for planning, not a quote, and not tax advice. Confirm
current incentives on DSIRE and current tax treatment with a tax professional before committing.
Evidence trail
Reviewed 4 Aug 2026Sources used to check this model
Primary public references anchor system cost, utility data and current federal incentive rules. Calculator rates remain planning assumptions tested against published market ranges.
System benchmarkNREL solar cost analysis
Utility ratesEIA electricity data
Incentive rulesIRS: 2025 changes to sections 25C and 25D
These organizations do not endorse ReplaceCost. Local installer quotes, utility rules, product specifications and current tax guidance control the real result. See the full methodology for the source hierarchy and update process.