Is Solar Power Worth It? A Practical ROI Calculator

“Is solar worth it?” sounds like a simple question, but most homeowners are really asking something more specific:

Will it reliably lower my electric bill—and how long until I break even—given my roof, my utility rules, and the quote I’m looking at?

Solar can absolutely be worth it. But it isn’t a universal win, and the difference usually comes down to a handful of variables you can check before you sign anything: your real $/kWh rate, sun exposure and shading, export compensation (net metering vs net billing), the incentive stack you actually qualify for, and the true all-in cost (especially if financed).

Quick answer: when solar tends to be worth it

Solar tends to make financial sense when your electricity is expensive enough that offsetting kWh has real value, your roof gets strong sun with minimal shade, and your utility program doesn’t severely devalue exported energy. In those conditions, payback is often measured in single-digit to low double-digit years, and the long-term savings can be meaningful.

Solar often struggles financially when your electricity is very cheap, your roof is heavily shaded, you expect to move soon, or the deal structure introduces friction (for example, a lease/PPA that a buyer must assume later).

Is solar worth it by location? A tiered view

Many people search “is solar worth it in my state” because they want a quick yes/no. The problem is that solar economics rarely break down cleanly by state lines. Utility rate plans, export compensation rules, and sunlight/shading can vary more within a state than between two states.

Instead of pretending one state always equals one payback number, use the tier approach below. It keeps the “location-based” logic people want, but it stays accurate as programs change.

How to place yourself in the right tier: pull your last electric bill (true $/kWh), run a conservative production estimate, then check whether your utility credits exports near retail or closer to avoided cost. That three-step check is more reliable than any static “50-state payback chart.”

The 5 drivers that decide payback

1) Your true electricity price

Two homes can both pay $180/month, but one is paying a high per-kWh price with lower usage, while the other has cheaper power but uses more energy. Solar ROI tracks cents per kWh more than it tracks the bill total.

If you don’t know your true rate, do this from your bill:

Total charges (excluding late fees) ÷ kWh used = $/kWh

2) Sun exposure and shading

Solar doesn’t need desert weather to work, but it does need consistent daylight on the array. A roof that looks “mostly sunny” can still lose a surprising amount of production to morning or late-afternoon shade from trees, chimneys, dormers, or neighboring buildings.

3) Export compensation

Some programs credit exported kWh close to retail value; others compensate exports at a lower rate and push homeowners toward self-consumption. When export credits are lower, the best ROI often comes from using solar as it is produced (or shifting flexible loads into solar hours) rather than exporting power.

If you want a starting point to confirm policy and incentive snapshots in your area, DSIRE is a common reference: DSIRE.

4) Incentives

Incentives can materially change payback, but they’re also the most misunderstood part of the conversation. Treat incentives as inputs you verify during quoting, not as marketing promises. For the U.S. federal residential credit, start with the IRS program page and confirm eligibility for your situation: Residential Clean Energy Credit (IRS).

5) Installed cost

Installed cost varies with roof complexity, equipment selection, labor conditions, and installer overhead. Financing can also flip the outcome: a great cash deal can become a mediocre deal if the loan APR and fees push total paid much higher than the sticker price.

A quick ROI calculator you can use in any state

You don’t need a fancy spreadsheet to sanity-check an offer. You need three numbers: net system cost, annual savings, and one conservative performance assumption.

Step 1: Estimate annual solar production

If you want a neutral baseline, PVWatts is a straightforward tool that forces you to specify location and system size: NREL PVWatts. If your roof has partial shade, apply a conservative haircut rather than using the rosiest estimate.

Step 2: Estimate annual savings under your export rules

A good starting point is:

Annual savings ≈ (self-consumed kWh × your $/kWh) + (exported kWh × export credit)

If your program credits exports near retail, savings can track closely with production. If exports are credited lower, your self-consumption share matters more. In those markets, the same system can be “worth it” for a household that can shift loads into solar hours—and only “okay” for a household that exports most of its production.

Step 3: Payback

Payback (years) = Net system cost ÷ Annual savings

Important: If you are financing, calculate net cost using total paid over time (principal + interest + fees), not just the advertised “system price.”

A worked example (swap in your numbers)

Use this table as a simple template. You can fill it out from your last bill and your quote in a few minutes.

Three real-world scenarios

Instead of promising one outcome for an entire state, these scenarios show how solar ROI behaves under different conditions. Treat them as templates—replace the placeholders with your own bill, your own quote, and your utility’s export rules.

Scenario 1: Higher-rate market + strong self-consumption

A household with a higher $/kWh rate, minimal shading, and daytime loads (or an EV that can charge mid-day) often sees faster payback. The reason is simple: a large share of solar production offsets high-value kWh, so each kWh produced is “worth more.”

Scenario 2: Moderate-rate market + net billing

In markets where exported kWh are credited lower, system design matters more than marketing claims. Right-sizing the array and shifting flexible loads into solar hours can make the difference between “solid ROI” and “meh.” Storage may help in some rate structures, but it should be justified by your actual usage pattern—not assumed.

Scenario 3: Low-rate market or heavy shade + short move timeline

When electricity is cheap, the roof is shaded, or you expect to move soon, the pure financial payback can stretch out. Solar may still be attractive for resilience, but financially it’s often the toughest scenario. If you’re here, avoid structures that complicate resale, and be realistic about how a buyer will value the system.

Owned vs leased: why the deal structure matters

For homeowners, an owned system is usually the cleanest path: you capture the upside, and you avoid introducing a contract that a future buyer must assume. Leases and PPAs can reduce upfront cost, but they can also introduce transfer friction and limit who benefits from the system’s performance.

If you don’t own a suitable roof (or you’re renting), you can still start with solar in a way that avoids permanent installation. For example, a foldable panel charging a power station can cover part of your daily device loads without touching building wiring. Here are portable options that deploy quickly: portable solar panels.

How to improve ROI after you install

Most people focus on panels and ignore behavior. But under modern programs that credit exports lower, self-consumption can move the needle. Even small shifts help: running laundry and dishwashing in solar hours, charging an EV mid-day when possible, and timing HVAC use so your home “coasts” through the evening peak.

Batteries can improve self-consumption and backup resilience, but they don’t automatically improve ROI. Treat storage as a reliability upgrade first and a bill-optimization tool second—then validate with your rate plan.

When solar is not worth it

Here are the situations that most often turn a promising quote into a disappointing result:

Roof near end-of-life: If you’ll reroof soon, you may pay to remove and reinstall panels later. Often it’s cleaner to reroof first.

Heavy shade in peak sun hours: Shade can cut production enough to blow up the payback math.

Very low electricity prices: If offset kWh aren’t worth much, savings stay small.

Short home tenure: If you plan to move before break-even, the economics depend on resale value and ownership structure.

A 7-step checklist before you sign a solar contract

1. Calculate your true $/kWh from your bill (don’t guess).
2. Get a shade-aware assessment (not just a roof photo).
3. Cross-check production assumptions using a neutral model.
4. Confirm whether your utility credits exports near retail or lower (net billing).
5. Compare quotes with the same assumptions (size, equipment class, warranty terms).
6. Confirm roof age, repair plans, and permitting path.
7. Decide on ownership structure (cash/loan/lease) with total cost and resale in mind.

FAQ: Is solar power worth it?

Is solar still worth it with higher interest rates?

Often yes, but financing changes the math. Always calculate payback using the total cost you will pay over time, not just a low monthly payment.

Is solar worth it in cloudy regions?

It can be. Lower sun reduces production, but ROI can still work if electricity rates are high, system cost is reasonable, and export rules don’t heavily penalize you.

Is solar worth it without strong net metering?

Solar can still work under net billing, but the strategy shifts. Self-consumption matters more, and system sizing and load timing become more important than chasing maximum panel count.

Do plug-in solar panels make sense in the U.S.?

“Plug into any outlet” is not universally safe or code-compliant in the U.S. If you’re considering plug-in approaches, read this NEC-focused overview first: Plug-In Solar Panels in the US: What NEC Allows.

Bottom line

Solar is worth it when the fundamentals line up: reasonable installed cost, solid sun exposure, an electricity rate that makes offsetting valuable, and rules that don’t devalue your exports too severely.

If you’re still deciding what “shape” of solar fits you—renter-friendly balcony setups vs permanent rooftop PV—this comparison can help you choose the right starting point: Balcony Solar Kits vs Rooftop PV.

Need help picking a realistic setup? Tell us your use case (roof, rental, off-grid load, or a device power budget) and we’ll point you to a practical path: Contact LinkSolar.

Note: This article is for general information only and is not financial, tax, or legal advice. Incentives and utility policies can change—verify your local rules and consult qualified professionals when needed.