Is solar worth it without the tax credit?

For most of the last decade a residential solar purchase paid for itself in roughly five to eight years, and the 30% federal credit was doing a lot of that work. With Section 25D gone for owned systems, a 2026 cash or loan purchase in most markets lands closer to eight to twelve years.

That is a real change and nobody should pretend otherwise. It is also not the end of the argument, because the thing that actually makes solar work was never the credit.

What drives your payback, in order of how much it matters

1. Your electricity rate. The single biggest factor. Displacing power at 32 cents a kilowatt-hour is a completely different investment from displacing it at 11 cents. This is why solar can be excellent in Massachusetts and marginal in a cheap-power state with more sun.
2. Your usage. A big bill means more to displace. Households with electric heat, an EV, or a pool are the strongest candidates.
3. Your state and utility programs. These survived the federal change. Rebates, performance payments and SREC markets can be worth thousands and vary enormously by state.
4. Net metering rules. What your utility credits you for exported power, and whether that is at retail or a lower rate, changes the math significantly.
5. Roof and shade. Orientation, pitch and tree cover set your production ceiling before anything else is decided.
6. Structure. Owned versus third-party. The comparison is here.

The case that replaced the credit

Residential electricity rates have risen substantially over the past decade, and utilities across the country continue to file for increases driven by grid hardening, transmission investment and load growth. Solar equipment produces for twenty-five to thirty years.

So the honest 2026 argument is not “get a tax credit.” It is: you are fixing a portion of an input cost that has gone in one direction for a decade, for the next quarter century. That case does not depend on Congress and it does not expire.

When solar is not worth it — said plainly

• You are moving within about five years. Owned systems recover value on sale unevenly and leased systems complicate the transaction. Short horizons are the most common reason to skip it.
• Your roof needs replacing first. Do the roof, then the panels. Removing and reinstalling an array to reroof underneath is an expensive, avoidable mistake.
• Heavy shade. Optimizers and microinverters help. They do not make up for a roof under mature trees.
• Your bill is small. Under roughly $75 a month there is often not enough to displace to justify the project.
• Your rate is very low and your state offers nothing. In a handful of markets the arithmetic genuinely does not work. A good rep will tell you that. Very few do.

How to check the number you are given

Ask for the payback calculation with its assumptions written out: the annual utility rate increase they assumed, the production estimate in kilowatt-hours, the degradation rate, and every incentive counted with its source.

Two specific things to look for. If the assumed annual rate increase is above about 4%, ask them to justify it against your utility’s actual filed history. And if any line in that calculation is a federal tax credit on a system you would own, the proposal is built on a number that no longer exists — stop there.