Is solar worth it without the federal tax credit?

Key takeaways

• The federal residential credit (Section 25D) is not available for solar installed after December 31, 2025, so a 2026 install carries the full cost.
• The credit was 30%, so for the same system and the same savings, simple payback is about 1.4 times as long as it was with the credit.
• Florida still exempts residential solar equipment from sales tax and from property-tax assessment. California’s property-tax exclusion for new solar is scheduled to end on January 1, 2027.
• Whether it still pays depends mostly on your bill, your roof and how long you stay. Your utility’s rules matter as much as the price.

The short answer

For some homes solar still pays back, and for others it does not. Without the federal credit you pay the full installed cost, so earning it back takes longer than it did when part of the cost came back as a credit. The only way to know is to run your own numbers with your utility’s rates, using one of our calculators below.

What ended, and when

The IRS says the Residential Clean Energy Credit was available for property installed from 2022 through December 31, 2025, at 30%, and that it is not available for property placed in service after December 31, 2025. The change comes from Public Law 119-21, the budget law signed on July 4, 2025.

The timing rule matters for anyone who signed a contract late in 2025. In its FAQs on the law, the IRS says an expenditure is treated as made when the original installation is completed, and it answers “No” to whether paying in 2025 for an installation finished in 2026 qualifies. If a salesperson tells you a 2026 install can still claim the federal credit, ask them to show you the IRS source.

RayValue applies no federal credit to any 2026 or later install, in any calculator or page.

What still exists

We list only incentives we have checked against a primary source, with the date we checked it (October 2026). Programs change, so confirm with your installer, utility and county before you sign.

Florida

• Sales tax. The Florida Department of Revenue lists an exemption from sales and use tax for solar energy systems, including photovoltaic power conditioning equipment and energy storage units, as long as the Florida Solar Energy Center has certified the component. The buyer certifies to the seller that the purchase qualifies.
• Property tax. Under section 193.624 of the Florida Statutes, the value attributable to a renewable energy source device, such as solar modules and inverters, is not counted in the assessed value of residential property. The statute applies to devices installed on or after January 1, 2013. The 2017 amendments to that section are written to expire on December 31, 2037, after which the older language, which says an increase in just value from installing a device may not be considered for residential property, applies.

See Florida solar without the federal tax credit for how net metering shapes payback.

California

• Property tax. California’s Board of Equalization (BOE) explains that new construction of an active solar energy system is excluded from property-tax reassessment under Revenue and Taxation Code section 73. Its August 2024 letter to county assessors says the exclusion applies to new construction in progress or completed before January 1, 2027, unless that date is extended. It also says that a system excluded before the sunset stays excluded until the property changes ownership, and cautions that not every project still under construction in 2026 automatically qualifies.
• What we could not confirm. We did not find a primary source showing the sunset has been extended. We could not open the current statute text on the Legislature’s site to confirm there has been no change, and a 2025 bill (SB 710) proposed changes whose final status we did not confirm. Treat January 1, 2027 as the working date. Ask your county assessor whether your project qualifies and when it must be finished.

We have not added other state, local or utility incentives because we have not yet verified them against a primary source. California’s export rules, which affect savings more than any one-time incentive, are covered in California NEM 3.0 and batteries.

How payback changed

There are two moving parts, the cost you pay and the savings you earn.

Cost. The IRS credit was 30% of eligible cost. Illustrative arithmetic, not a forecast: if a hypothetical system had a 10-year simple payback after the credit, its cost net of the credit was 70% of the full price. The same system without the credit costs the full price, which is 1 / 0.7, or about 1.43 times as much. With identical yearly savings, 10 years becomes about 14 years. Real results vary with your savings, financing, rate changes and any loan.

Prices themselves have been moving too. Berkeley Lab’s Tracking the Sun reports installed prices before any incentives. Its 2024 edition (2023 data) found state-level residential median prices ranging from $3.2 to $5.2 per watt. Its August 2026 data update (2025 installs) found that host-owned residential systems fell by $0.5 per watt year over year in inflation-adjusted terms, and that the median price across the top-100 residential installers ranged from $2.4 to $6.3 per watt. Roughly 60% of those installers had medians below $4 per watt. Prices that spread out mean getting several quotes can matter as much as the credit once did. See residential solar prices in 2026 and how to compare solar quotes.

Savings. What you save each year does not depend on the credit. It depends on your electric rate, how much of your usage the panels cover, and how your utility credits power you send to the grid. EIA’s 2024 average monthly bill table (Table 5A), which pairs price with usage and bill, shows how different the two states are:

2024 residential average (EIA)	Price per kWh	Use per month	Average bill per month
Florida	14.14 cents	1,104 kWh	$156.09
California	31.97 cents	503 kWh	$160.86
U.S.	16.48 cents	863 kWh	$142.26

The average bills are close, but the paths to them differ. Florida homes use more electricity per month at a lower price per kilowatt-hour, and under net metering, FPL’s FAQ says extra kilowatt-hours your system makes go into a bank that carries forward month to month. California homes pay a much higher price per kilowatt-hour, and the CPUC’s net billing tariff, the successor to NEM 2, changes how power you send to the grid is valued. This is why the same system can pay back faster in one utility’s territory than another’s.

Nationally, EIA reports a U.S. residential average of 18.16 cents per kWh in August 2026, up 3.4% from August 2025. That is one national datapoint, not a Florida or California trend. Higher future rates raise savings, but nobody can promise how fast rates will rise, so our results use a range.

Who it can still make sense for

• Homes with high electric bills, where each kilowatt-hour solar replaces is worth more.
• Roofs with good sun and little shade.
• Owners who plan to stay long enough to earn the cost back. See how long solar panels last and how fast they fade for what a 25-year payback assumes.
• Buyers who have compared several quotes and found a price toward the lower end of the range.
• Homeowners who also want backup power from a battery, understanding that a battery adds cost and mostly buys resilience. Berkeley Lab found the median cash-purchase residential price was $2.1 per watt higher for paired solar-plus-storage than for stand-alone solar in 2025 installs, with most of that data from California. See home battery costs and backup.

Who it may not make sense for

• Homes with small bills, where the fixed cost of an installation is hard to earn back.
• Heavily shaded roofs.
• Renters, and owners who expect to move soon. Read whether solar increases home value before counting on a sale price boost.
• Anyone relying on a quote that assumes the federal credit for a 2026 install.

If you are weighing a lease or power purchase agreement instead of buying, read solar lease vs buy. Check what the contract assumes about tax benefits and who receives them, and do not rely on a salesperson’s description of the federal credit.

See the numbers for your utility

Each page below uses that utility’s published rates and export rules, with worked examples from our calculator engine:

• Florida: FPL, Duke Energy Florida, TECO
• California: PG&E, SCE, SDG&E

Next steps

1. Run your own numbers in the Florida calculator or the California calculator. Results are shown as low, likely and high ranges, with no federal credit.
2. Read the methodology to see every assumption.
3. If you are in California, ask your installer about the property-tax exclusion deadline.
4. When you are ready, request quotes and compare them line by line.