Image: Jan Van Bizar, Pexels
One of the major motivations for installing rooftop residential solar is saving on electricity bills.
Residential solar systems offset electricity needs for 25 years or more, but the payback period, or amount of years to breakeven on your investment is far shorter than that.
Currently, payback periods range from about 4 years (in places like Illinois and Washington D.C.) to about 14 years (Tennessee and Washington), said solar marketplace operator EnergySage.
For many years, the federal government has offered a tax credit that covers 30% of a residential solar installation’s cost. This tax credit was designed to remain available into the mid 2030s, but the Senate’s latest budget proposal cuts the credit within 180 days of enactment.
This hurts the return-on-investment for residential solar. EnergySage said installing solar now, before the credit is gone, will save an average of about $9,000 on installed system costs. Without the tax credit, the average payback period will be about 2 to 8 years longer, or about 43% longer across the United States, said EnergySage.
“The current version of the bill being debated in the Senate is poised to eliminate the residential solar tax credit nearly a decade ahead of schedule, and with virtually no phase-down period and a cutoff date of Dec. 31, 2025,” said Casey McDevitt, contributing writer, EnergySage.
Here’s how EnergySage projects the payback period will change in your state without the solar Investment Tax Credit:
| State | Payback period with ITC (years) | Payback Period without ITC (years) | Difference (years) |
| Arkansas | 10.9 | 15.5 | 4.7 |
| Arizona | 11.0 | 15.7 | 4.7 |
| California | 5.1 | 7.3 | 2.2 |
| Colorado | 11.3 | 16.1 | 4.8 |
| Connecticut | 6.1 | 8.8 | 2.6 |
| Washington D.C. | 3.9 | 5.6 | 1.7 |
| Delaware | 8.5 | 12.2 | 3.6 |
| Florida | 10.9 | 15.5 | 4.7 |
| Georgia | 12.3 | 17.6 | 5.3 |
| Iowa | 13.3 | 18.9 | 5.7 |
| Idaho | 13.9 | 19.8 | 5.9 |
| Illinois | 4.1 | 5.8 | 1.7 |
| Indiana | 13.3 | 18.9 | 5.7 |
| Kansas | 12.5 | 17.8 | 5.4 |
| Kentucky | 12.7 | 18.2 | 5.4 |
| Louisiana | 13.6 | 19.4 | 5.8 |
| Maryland | 8.1 | 11.5 | 3.5 |
| Maine | 12.1 | 17.3 | 5.2 |
| Michigan | 12.5 | 17.9 | 5.4 |
| Minnesota | 10.7 | 15.3 | 4.6 |
| Missouri | 11.8 | 16.9 | 5.1 |
| North Carolina | 10.3 | 14.6 | 4.4 |
| New Hampshire | 8.0 | 11.4 | 3.4 |
| New Jersey | 6.2 | 8.8 | 2.6 |
| New Mexico | 10.2 | 14.6 | 4.4 |
| Nevada | 6.3 | 9.0 | 2.7 |
| New York | 8.1 | 11.6 | 3.5 |
| Ohio | 8.0 | 11.4 | 3.4 |
| Oklahoma | 10.0 | 14.2 | 4.3 |
| Oregon | 9.4 | 13.4 | 4.0 |
| Pennsylvania | 7.1 | 10.1 | 3.0 |
| Rhode Island | 6.8 | 9.7 | 2.9 |
| South Carolina | 8.8 | 12.6 | 3.8 |
| Tennessee | 14.5 | 20.8 | 6.2 |
| Texas | 6.2 | 8.9 | 2.7 |
| Utah | 19.7 | 28.1 | 8.4 |
| Virginia | 8.9 | 12.7 | 3.8 |
| Vermont | 10.5 | 15.1 | 4.5 |
| Washington | 14.1 | 20.2 | 6.1 |
| Wisconsin | 10.2 | 14.6 | 4.4 |
| West Virginia | 10.5 | 15.0 | 4.5 |
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