Is Solar Still Worth It in 2026 After the Federal Tax Credit Ended?

The single biggest change to solar economics in a decade

The One Big Beautiful Bill Act, signed July 4, 2025, ended the residential clean energy credit (Section 25D) for systems placed in service after December 31, 2025. In 2025, that 30% credit knocked about $5,400 off an $18,000 system. In 2026, a homeowner who buys with cash or a loan pays the full price. The result: payback periods are roughly 2–3 years longer in most states.

How much longer is payback in 2026?

Using a 6 kW system at $3.00/W with 70% self-consumption and real 2026 data (EIA rates, NREL PVWatts production), estimated payback moved from roughly 5–8 years to 7–11 years in high-rate states. In Massachusetts, payback is about 7.6 years; in New York about 8.7; in New Jersey about 9.8 even with TREC income. In cheap-power states like Idaho or North Dakota, payback now exceeds 15–18 years.

What still works in your favor

State incentives matter more than ever. New York still offers a 25% state tax credit (cap $5,000) plus NY-Sun rebates. Massachusetts has a 15% credit plus SMART performance payments. New Jersey, Maryland, and Illinois still have real SREC markets. Full-retail net metering states credit every exported kWh at your retail rate, which shortens payback substantially.

How to decide

Use the PVFig Solar ROI Calculator with your state and real bill, run the 30-second worth-it quiz, and get 3–5 written quotes. If you plan to move within 5 years, solar rarely pays off. If you are a long-term owner in a high-rate or strong-incentive state, solar can still beat the market on a risk-adjusted basis.

Is the federal solar tax credit really gone in 2026?

Yes. The residential 25D credit expired December 31, 2025. Systems placed in service in 2026 are not eligible. The commercial 48E credit still exists through 2027 for lease/PPA providers, but that benefit goes to the system owner (the lessor), not the homeowner.

Does solar still pay off without the federal credit?

It depends on your state. High-electricity-rate states (Hawaii, Massachusetts, New York, Connecticut) still reach payback in 7–9 years. States with strong incentives (NJ, MD, IL) offset part of the loss. Cheap-power states (Idaho, ND, MO) now have 15+ year paybacks.

What is the average solar payback period in 2026?

Industry data (SEIA/EIA, Q1 2026) puts the national average around 8.7 years, up from roughly 6–7 years when the 30% credit was active. The range runs from ~4–5 years in Hawaii to 15–20 years in low-rate states.