Is Solar Worth It? A State-by-State Analysis

The Clear Winners: Solar Is Obviously Worth It

In these states, the combination of electricity rates, sun, and incentives produces payback periods under 8 years. If you own your home here and have a suitable roof, going solar is one of the better financial decisions you can make:

• Hawaii — Electricity costs $0.40+/kWh. A 6kW system pays back in 4–5 years. The math is exceptional.
• Massachusetts — Rates near $0.25/kWh plus a 25% state credit on top of the federal ITC. 6–7 year paybacks are common.
• California — High retail rates ($0.28+/kWh for PG&E customers) make solar compelling despite NEM 3.0 changes to export compensation. 7–9 year range.
• New York — A 25% state credit (up to $5,000) stacks on top of the federal 30%. Combined, you can offset over 50% of system cost with tax credits alone.
• Connecticut — Highest average electricity rates in the continental US. Solar is effectively subsidized by expensive grid power.

The Solid Middle: Solar Probably Makes Sense

These states show 8–12 year paybacks — not spectacular, but still a positive financial return over the system's 25-year lifespan, and one that comes with independence from grid price increases:

• Arizona — Best irradiance in the continental US partially offsets moderate electricity rates.
• New Jersey — High rates and decent SREC (solar renewable energy credit) market boost returns.
• Texas — Large state with highly variable outcomes. South Texas has excellent sun; electricity rates of $0.12–$0.14/kWh keep paybacks in the 9–11 year range.
• Florida — Good sunshine, moderate rates, solid 8–10 year paybacks. Net metering policy is currently favorable.
• Colorado — High altitude improves panel output; utility incentives vary by provider.

The Gray Zone: Depends on Your Specific Situation

In these states, paybacks typically run 12–15 years. Solar can still make financial sense — especially if electricity rates rise, you plan to stay in your home long-term, or you have excellent roof orientation — but the margin is thinner:

• Ohio, Indiana, Michigan — Moderate electricity rates and limited sun. Works best for south-facing roofs with no shading.
• Georgia, South Carolina — Decent sun, but some utilities have fought net metering. Check your utility's policy before committing.
• Virginia, North Carolina — Mixed picture. Some utilities (Dominion) offer favorable interconnection; rural co-ops less so.

The Difficult Cases: Solar Rarely Makes Sense

These states combine cheap electricity (often from hydro or natural gas) with modest solar resource, resulting in 15+ year paybacks. Solar is possible, but the financial case is weak:

• Louisiana — $0.09/kWh electricity makes paybacks stretch to 16–18 years. Environmental motivation might justify it; pure ROI doesn't.
• Washington, Oregon — Cheap hydropower ($0.10–$0.11/kWh) and significant cloud cover in the western parts of both states create challenging economics.
• Wyoming, Idaho — Low electricity rates from coal and hydro. Eastern parts with good sun fare better than western.

Note: even in difficult states, if your electricity rate is above the state average (common in certain utility territories), the math may still work for your specific address. Use the interactive calculator with your actual rate.

The Factors That Override State Averages

Your individual situation can move you one tier in either direction from these state-level generalizations:

• Roof orientation: South-facing roofs at 30° tilt produce ~15% more than average. East/west splits produce less.
• Shading: Even 10% shading from trees can reduce output by 20–30% depending on inverter type.
• Your electricity rate: If you're on a time-of-use plan with peak rates above $0.30/kWh, solar (especially with a battery) dramatically improves.
• How long you'll stay: Solar adds home value, but you capture the full financial benefit only if you stay for the full payback period or sell to a buyer who values it.

Our Take

For the roughly 60% of American homeowners living in states with paybacks under 12 years, solar is a genuinely good financial decision when combined with the 30% federal tax credit. It's not a get-rich-quick scheme, but it's a reliable return on a home improvement with a 25-year asset life.

The other 40% should run the numbers for their specific address before deciding. Start with the state data, then drill down with the calculator. The answer is often better than the state average suggests for individual homeowners with good sun exposure.