Best States for Solar Payback: Fastest and Slowest
Where does home solar pay back fastest? We rank states with one example home and explain why electricity prices matter more than sunshine.
Published 6 min readRoofPayback editorialChecked by automated fact and quality checks
Short answer
In our example home, solar pays back fastest where electricity is expensive, not where it is sunniest. Hawaii comes first at 4.1 years, then California at 5.8 years and Maine at 6.8 years. Washington is the slowest at 17.2 years, followed by North Dakota at 16 years and Oregon at 15.4 years.
Sunshine helps, but the price you pay for each unit of electricity matters more. Nevada is one of the sunniest states in our table, yet its example payback is 14.1 years because power there is cheap. Alaska gets the least sun of any state we model, yet it pays back in 10.8 years because power there is expensive.
These are example numbers, not a quote. Your result depends on your roof, your utility's rules and the price you are offered. You can run your own numbers in our solar calculator.
How we built the example
"Payback" means the number of years it takes for the money solar saves on your bills to add up to what you paid for the system.
To compare states fairly, we used one example home everywhere:
- A 7 kW system that costs $3000/kW to install ($21000 total), with no incentives.
- The home uses 10500 kWh/yr. A kWh (kilowatt-hour) is the unit on your power bill.
- 40% of the home's use happens while the sun is up.
- $100/yr for maintenance, electricity prices rising 2.5%/yr, and panels losing 0.5%/yr of output.
- A 25-year horizon. Credits for power sent to the grid are capped at a year of grid purchases (an annual true-up).
Solar output comes from PVWatts v8, a free estimator from the U.S. Department of Energy's National Laboratory of the Rockies (formerly NREL). We modeled a south-facing roof with a 20° pitch and 14% losses, using one reference city per state. Electricity prices are the EIA July 2026 average residential price for each state. The U.S. average was 18.31¢/kWh in July 2026. Our methodology page explains the steps in more detail.
There is no federal tax credit in these numbers. The IRS says the Residential Clean Energy Credit "is not available for any property placed in service after December 31, 2025." Our guide on whether solar is worth it without the tax credit covers that change.
Fastest payback states
These are the states with the shortest example payback when every kWh you send to the grid earns full credit.
| State (city) | Yearly output per kW | Price | Payback, full credit | Payback, half credit |
|---|---|---|---|---|
| Hawaii (Honolulu) | 1622 kWh/kW | 48¢/kWh | 4.1 years | 5.5 years |
| California (Los Angeles) | 1677 kWh/kW | 33.61¢/kWh | 5.8 years | 7.6 years |
| Maine (Portland) | 1319 kWh/kW | 32.41¢/kWh | 6.8 years | 9.2 years |
| Massachusetts (Boston) | 1302 kWh/kW | 30.49¢/kWh | 7.3 years | 9.8 years |
| New York (New York City) | 1291 kWh/kW | 29.9¢/kWh | 7.5 years | 10.1 years |
| Rhode Island (Providence) | 1294 kWh/kW | 28.29¢/kWh | 7.9 years | 10.6 years |
| District of Columbia (Washington) | 1411 kWh/kW | 25.21¢/kWh | 8.2 years | 11.2 years |
Notice the pattern. Hawaii and California get plenty of sun, but Maine, Massachusetts and New York do not stand out for sunshine. What they share is a high price per kWh. Every kWh your panels make replaces a kWh you would have bought, so a high price means each kWh saves you more.
In Hawaii, year-1 savings in our example are $5040. In California they are $3529.
Slowest payback states
At the other end are states where power is cheap, sunshine is modest, or both.
| State (city) | Yearly output per kW | Price | Payback, full credit | Payback, half credit |
|---|---|---|---|---|
| Washington (Seattle) | 1088 kWh/kW | 14.71¢/kWh | 17.2 years | 21.8 years |
| North Dakota (Fargo) | 1294 kWh/kW | 13.41¢/kWh | 16 years | 20.9 years |
| Oregon (Portland) | 1128 kWh/kW | 15.97¢/kWh | 15.4 years | 19.8 years |
| Tennessee (Nashville) | 1339 kWh/kW | 13.71¢/kWh | 15.2 years | 20 years |
| Kentucky (Louisville) | 1355 kWh/kW | 13.81¢/kWh | 14.9 years | 19.8 years |
| Louisiana (New Orleans) | 1479 kWh/kW | 12.72¢/kWh | 14.8 years | 20.2 years |
Washington and Oregon combine lower output with prices below the national average. Louisiana gets more sun than Maine, Massachusetts or New York, but it has the lowest price on this list. In Washington, year-1 savings in our example are $1120.
A slow payback does not mean solar never makes sense there. It means the example system takes longer to earn back its cost. A lower installed price, a local incentive or a different rate plan can change the picture.
Why sunshine alone does not decide it
The sunniest places in our table are New Mexico (1779 kWh/kW), Arizona (1755 kWh/kW) and Nevada (1753 kWh/kW). Their example paybacks are 11.5 years, 12 years and 14.1 years. None of them makes the fastest list.
Compare that with Alaska. Anchorage produces 922 kWh/kW, the lowest in our table. But Alaska's price is 28.83¢/kWh, so its example payback is 10.8 years. That is faster than all three desert states.
The U.S. Department of Energy puts it this way: "Your savings also depend on the electricity rates set by your utility and how much the utility will compensate you for the excess solar energy you send back to the grid."
So two things drive payback more than sunshine:
- Your electricity price. You can check your state on our electricity prices page. For example, see Hawaii or Nevada.
- What your utility pays for exported power. This is covered in the next section.
Your roof also matters. DOE notes: "Typically, solar panels perform best on south-facing roofs with a slope between 15 and 40 degrees, though other roofs may be suitable too."
How export credits change the ranking
Your panels often make more power than your home uses in the middle of the day. That extra power goes to the grid. DOE explains: "Net metering is an arrangement between solar energy system owners and utilities in which the system owners are compensated for any solar power generation that is exported to the electricity grid."
How much you are credited for each exported kWh varies. That is why we show more than one scenario:
- Hawaii: 4.1 years at full credit, 5.5 years at half credit, 7.1 years at quarter credit.
- California: 5.8 years at full credit, 7.6 years at half credit, 9.7 years at quarter credit.
- Washington: 17.2 years at full credit, 21.8 years at half credit, 25 years at quarter credit.
The lower the credit, the more your payback depends on using solar power yourself while the sun is up. In DOE's words: "Whether or not your solar system qualifies for net metering payments depends on policies and practices in your state and electric utility." Ask your utility how exports are credited before you sign anything. Net metering and solar incentive programs vary by state and utility, and you can search them in the DSIRE database. Our guide on net metering vs. net billing walks through the difference.
What to check for your own home
- Your actual rate. Look at your bill, not just the state average. Your price depends on your utility and plan.
- Your export credit. Full, partial or something else? In our example, this moves payback by years.
- Your quote. We assume $3000/kW. A different price changes the result.
- System size. See how many solar panels you need.
- Local incentives. Some states and utilities offer programs. Check DSIRE.
Browse every state on our solar panels page.
Bottom line
In our example, home solar pays back fastest in Hawaii, California, Maine, Massachusetts and New York, where electricity is expensive. It pays back slowest in Washington, North Dakota and Oregon. Sunny states with cheaper power, like Nevada, do not reach the top. Before you decide, check your own rate, your utility's export credit and a real quote, then plug them into the solar calculator.
Sources
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