Solar Panel Cost by State: Installed Price and Payback

Example home assumptions

The payback numbers on this page use one example home. We state the key assumptions here so you can compare them with your own:

• A 7 kW system and 10500 kWh of use per year.
• 40% of use happens while the sun is up.
• Installed cost of $3500/kW ($24500 total) unless noted. No incentives.
• $100 per year for maintenance.
• Electricity prices rise 2.5% per year, and panels lose 0.5% of output per year.
• A 25-year horizon.
• Export credits are capped at a year of grid purchases, with an annual true-up.

A kWh, or kilowatt-hour, is the unit your utility bills you for. Our guide on what a kilowatt-hour is explains it in more detail. Production comes from PVWatts, a free estimator from the U.S. Department of Energy's National Laboratory of the Rockies (formerly NREL). Prices are EIA July 2026 residential averages. See our methodology for the full approach.

Same cost, different payback by state

Payback is the time it takes for bill savings to equal what you paid. The table shows five states at three price points, using one reference city per state.

State	$2500/kW ($17500)	$3000/kW ($21000)	$3500/kW ($24500)
California	4.9 years	5.8 years	6.6 years
New York	6.4 years	7.5 years	8.7 years
Arizona	10.2 years	12 years	13.6 years
Florida	10.5 years	12.3 years	14.1 years
Texas	10.7 years	12.5 years	14.3 years

Arizona gets a lot of sun, with 1755 kWh of yearly output per kW in Phoenix. But its price is 15.38¢/kWh, so each kWh the panels make saves less. California's Los Angeles reference city produces 1677 kWh per kW, and its price is 33.61¢/kWh. That higher price is the main reason for the faster payback.

Sun matters, but the electricity price matters more here. The U.S. average residential price was 18.31¢/kWh in July 2026, up from 17.45¢ a year earlier. Read more in our electricity prices by state pages and in how electricity prices affect solar payback.

A wider look at the $3500/kW example

Here are more states from our fact pack, at $3500/kW with full export credit. These are example results, not quotes.

State (reference city)	Price	Example payback
Hawaii (Honolulu)	48¢/kWh	4.7 years
California (Los Angeles)	33.61¢/kWh	6.6 years
Maine (Portland)	32.41¢/kWh	7.9 years
Massachusetts (Boston)	30.49¢/kWh	8.5 years
New York (New York City)	29.9¢/kWh	8.7 years
Nevada (Las Vegas)	12.77¢/kWh	16.1 years
Washington (Seattle)	14.71¢/kWh	19.6 years

The pattern is clear. High prices shorten payback. Low prices or less sunshine lengthen it. Sun still counts. Las Vegas produces 1753 kWh per kW in our model, but its low price keeps payback long. Seattle produces 1088 kWh per kW, which adds to its long payback. Check your own state page. For a ranked view, see best states for solar payback.

You can open a state page for details: Texas, California, Florida, Arizona and New York. Browse all of them from solar panels by state.

Why net metering changes the answer

Net metering and similar programs decide how your utility credits the power you send to the grid. Programs vary by state and utility. DSIRE keeps a database of current programs at DSIRE.

Our model also shows payback at half and quarter credit. For example, Alabama (Birmingham) shows 14.4 years at full credit, 19.2 years at half credit and 22.8 years at quarter credit. If your utility pays less for exports, payback gets longer. Our guide on net metering versus net billing walks through this.

Incentives and the federal tax credit

The 30% federal Residential Clean Energy Credit (Section 25D) is not available for property placed in service after December 31, 2025. You can check the current rule on the IRS page. Our example assumes no incentives, so it already reflects that change.

State, local or utility programs may still exist. We do not give tax advice, so check with a tax professional and DSIRE. Read is solar worth it without the tax credit for more.

How to use these numbers

1. Get your own bill and find your yearly kWh use.
2. Collect at least a few quotes and compare price per watt.
3. Ask each installer how your utility credits exports.
4. Put your numbers into the solar calculator.
5. Compare cash and loan costs, since the Berkeley Lab data shows they differ.

If you are unsure how large a system you need, see how many solar panels you need.

Bottom line

Solar panel prices vary, and the Berkeley Lab data shows a wide range from $3.0 to $5.2 per watt for the 20th to 80th percentile. Payback depends even more on your electricity price, your sunshine and how your utility credits exports. In our example, a $3500/kW system pays back in 6.6 years in California and 14.3 years in Texas. Your results will differ, so use a real quote and the solar calculator before you decide.