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EnergySage Releases 21st Solar & Storage Marketplace Report
Home solar
How much do solar panels cost?
The average EnergySage solar shopper breaks even in about 10.5 years.
As subject matter experts, we provide only objective information. We design every article to provide you with deeply-researched, factual, useful information so that you can make informed home electrification and financial decisions. We have:
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The average EnergySage shopper breaks even on their solar investment in 10.5 years. After that? About 15-20 more years of free electricity.
That break-even point—your solar payback period—tells you exactly when your system stops costing you money and starts making you money. For the average solar shopper, that translates to around $57,000 in savings over 25 years.
Your payback period depends on your electricity costs, system size, and how you pay for solar. Some shoppers break even in five years. Others take closer to 15. Understanding what drives those differences helps you evaluate whether solar makes sense for your home—and which financing option gets you to the payback finish line fastest.
Most homeowners save around $50,000 over 25 years
Your solar payback period is the time it takes to break even on your initial solar investment
The average EnergySage solar shopper breaks even in about 10.5 years
You can calculate your breakeven point by dividing the total cost of your system by your annual savings
Your electricity use and cost, the cost of solar, and your access to solar incentives all impact your solar payback period
How you finance your system—cash, loan, or lease/PPA—affects your payback calculation
Calculating your solar payback period is straightforward: Divide the cost of installing your system by the amount of money you'll save each year.
Total system cost ÷ annual savings = solar payback period
Let's walk through a real example using actual EnergySage numbers.
Start with the total price of your solar panel system, then subtract any upfront incentives and rebates. Say your system costs $29,649 before incentives (the average cost on EnergySage for an 12 kW system), and you qualify for $2,000 in local rebates. Your combined costs would be $27,360.
Total cost ($29,360) – rebates ($2,000) = combined costs ($27,360)
Now figure out how much you'll save each year. If your monthly electric bill runs about $175, eliminating that cost saves you $2,100 annually—assuming your system covers 100% of your electricity needs.
Don't forget about ongoing incentives. In some states, you can earn money from solar renewable energy certificates (SRECs) or net metering credits. If you're earning $513 annually from SRECs, your total annual benefit jumps to $2,613.
Eliminated electricity costs ($2,100) + annual incentives ($513) = annual savings ($2,613)
Divide your combined costs by your annual savings to get your payback period.
Combined costs ($27,360) ÷ annual savings ($2,613) = solar payback period (10.5 years)
In this example, you'd break even in 10.5 years. After that, you'd have roughly 15-20 more years of free electricity—adding up to significant long-term savings.
Payback periods vary significantly by state, depending on the availability of incentives, the cost of solar, and the cost of electricity.
Arkansas
19.37
$32,069
$2.45
$15,657
Arizona
12.03
$28,019
$2.07
$37,822
California
7.59
$21,472
$2.39
$111,481
Colorado
14.84
$30,140
$2.86
$26,989
Connecticut
9.06
$30,707
$2.79
$119,468
Washington D.C.
5.06
$30,458
$3.01
$93,610
Delaware
11.19
$31,075
$2.25
$45,610
Florida
19.37
$31,384
$2.19
$65,068
Georgia
16.93
$32,346
$2.46
$21,083
Iowa
17.86
$36,006
$3.06
$22,003
Idaho
20.46
$34,267
$2.68
$10,698
Illinois
8.41
$35,558
$2.86
$42,859
Indiana
17.53
$36,582
$2.80
$28,257
Kansas
18.47
$33,225
$2.82
$16,948
Kentucky
19.09
$36,080
$2.62
$19,572
Louisiana
18.71
$28,445
$2.65
$15,402
Massachusetts
7.49
$33,246
$3.10
$175,740
Maryland
10.31
$37,014
$2.66
$65,036
Maine
17.39
$32,915
$2.97
$47,604
Michigan
17.80
$35,072
$3.06
$22,623
Minnesota
18.69
$35,255
$2.95
$18,631
Missouri
15.37
$32,914
$2.62
$28,284
North Carolina
16.67
$32,465
$2.37
$23,109
New Hampshire
12.03
$31,877
$3.04
$77,138
New Jersey
8.06
$35,923
$2.84
$74,404
New Mexico
14.37
$25,954
$2.79
$24,415
Nevada
11.50
$26,953
$2.23
$50,742
New York
10.07
$34,035
$2.79
$50,923
Ohio
13.27
$36,221
$2.73
$47,012
Oklahoma
15.94
$32,984
$2.35
$28,645
Oregon
13.00
$32,663
$2.69
$42,882
Pennsylvania
10.09
$33,662
$2.65
$69,233
Rhode Island
9.66
$32,321
$2.97
$123,771
South Carolina
12.14
$32,355
$2.47
$33,533
Tennessee
21.40
$41,610
$3.08
$4,796
Texas
8.47
$29,474
$2.14
$83,838
Virginia
13.20
$37,400
$2.76
$41,896
Vermont
15.17
$32,520
$2.95
$30,001
Washington
17.87
$38,207
$2.71
$25,740
Wisconsin
15.89
$36,250
$3.05
$31,301
West Virginia
15.61
$44,537
$3.05
$52,892
*Based on EnergySage Marketplace data and do not include the federal tax credit, which expires for systems installed after December 31, 2025, and is unavailable for most homeowners due to limited installer capacity through the end of the year. They were last updated manually on October 7, 2025.
**Based on EnergySage Marketplace data. They were last updated automatically on November 7, 2025.
Several factors determine how quickly you'll recoup your solar investment:
Your monthly energy usage determines the size of the solar system you need as well as the amount of electricity you’ll need to offset each month. Specific energy costs in your area also directly impact your return on investment (ROI) from your solar power system. The higher your monthly electric bill, the more quickly you tend to recoup your investment because it shortens your payback period.
Solar installers will try to provide you with a system that matches 100% of your electricity consumption, but practical constraints like the size of your roof and seasonal weather variation may impact the amount of electricity you can produce on your property.
Incentives and rebates can dramatically reduce the total cost of going solar. State and local solar incentives may lower your expenses significantly, depending on where you live. Some of the most valuable incentives include:
State tax credits: Several states offer their own tax credits that can save you thousands
Cash rebates: Direct rebates from your state or utility company reduce your upfront costs
Performance-based incentives: Programs like SRECs provide ongoing annual income based on how much electricity your system produces
Net metering: Many utilities offer net metering programs that give you per-kilowatt-hour credits for any extra electricity your solar panels generate and send to the local grid. Depending on your system size and local rates, these credits can represent significant additional value
The availability and value of these incentives vary widely by location, so it's worth researching what's available in your area.
Your financing method significantly impacts your payback calculation:
Cash purchase: When you buy your system outright, your payback period calculation is straightforward—just divide your total cost by annual savings. This approach delivers the shortest payback period and highest lifetime savings.
Solar loan: With a loan, you'll need to factor in interest costs, which extend your payback period. However, if you choose a loan where your monthly payment is lower than your previous electric bill, you can start experiencing positive cash flow from day one, even though your payback period may technically be longer.
Lease or PPA: With a lease or power purchase agreement (PPA), the payback calculation works differently. You don't own the system, so there's no upfront investment to recoup. Instead, you start saving immediately through lower monthly energy costs compared to your utility rates. While your total lifetime savings will be lower than with ownership, you avoid the upfront cost entirely and benefit from predictable energy expenses.
Each option has trade-offs between upfront cost, payback speed, and total lifetime savings. The right choice depends on your financial priorities and whether you value maximizing long-term returns or maintaining capital flexibility.
Your payback period tells you when your solar investment breaks even—but the real story is what happens after. Most solar shoppers save between $37,000 and $148,000 over the 25-year lifetime of their system. With electricity rates climbing 32% over the past decade, those savings only grow larger.
Whether you break even in year five or year 15, you're still looking at 10-20+ years of essentially free electricity on the back end. The question isn't if solar pays for itself—it's how much you'll save once it does.
Most homeowners save around $50,000 over 25 years
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