Over 25 years, home solar almost always costs far less than staying on grid power. According to MySolarFY (July 2026), an average US home spends about $64,900 on grid electricity over 25 years at roughly 18 cents per kWh rising about 2.5 percent a year, while buying and owning a typical 6 to 8 kW solar system runs about $18,000 to $30,000 all in now that the federal 25D homeowner credit has ended, so a well-sited owner comes out roughly $35,000 to $45,000 ahead. The catch most comparisons miss: a power bill never ends and a solar system does.
- The average US home pays about $1,900 a year for grid power, at about 18 cents per kWh, and that rate keeps rising about 2 to 3 percent a year.
- A typical 6 to 8 kW solar system costs about $17,000 to $26,000 before incentives, then runs on near-zero fuel cost.
- The 30% federal homeowner tax credit (Section 25D) ended after December 31, 2025, so a 2026 buyer carries the full system cost and cannot claim it. Any quote or online estimate that still subtracts it is overstating your savings.
- Grid power can still win where rates are very low, the roof is shaded, or you will move within a few years.
Last updated July 2026, and reviewed by the MySolarFY team against the linked EIA, IRS, DOE / NREL, and EnergySage sources.
The honest way to weigh home solar vs traditional electricity cost is to stop comparing a monthly solar payment to a monthly power bill and look at the full 25-year picture instead. Grid power looks cheap because you pay it in small monthly pieces, but those pieces never stop and they keep rising. Solar costs more up front and then runs at almost nothing for decades. Over the life of a system, an average US home spends roughly $61,000 to $69,000 on grid electricity, while owning solar costs about $18,000 to $30,000 all in. This guide breaks down both sides with 2026 numbers we compute ourselves, including the big change that the federal homeowner tax credit ended on December 31, 2025.
Home solar vs grid power in 2026: the numbers up front
- The average US home pays about $1,900 a year for grid electricity, at about 18 cents per kWh on roughly 10,500 kWh of use (EIA, as of 2026).
- Over 25 years that grid power totals roughly $61,000 to $69,000, because residential rates have risen about 2 to 3 percent a year for decades (EIA, as of 2026).
- A typical 6 to 8 kW home solar system costs about $17,000 to $26,000 before incentives, then runs on near-zero fuel cost (DOE / NREL cost benchmark; EnergySage, as of 2026).
- The 30% federal homeowner tax credit (Section 25D) ended after December 31, 2025, so a 2026 buyer carries the full system cost and cannot claim it (IRS, as of 2026).
- Owning solar still beats 25 years of grid power by roughly $30,000 to $50,000 or more for a well-sited home, and more in high-rate states (DOE / NREL benchmark, as of 2026).
- Grid power is sometimes still cheaper, where rates are very low, the roof is shaded, or you will move within a few years.
Is solar cheaper than grid electricity? The 25-year answer
Yes for most homes, but only when you compare the full 25 years, not one month against another. The monthly solar payment can look bigger than a single power bill, which is exactly why the live debate (and the top of the search results) is full of “solar costs more than my bill” stories. The catch is that the power bill never ends and the solar payment does. The table below lines up both sides over a system’s 25-year warranty life, using the US average rate and a typical system.
| Over 25 years | Stay on grid power | Own a home solar system |
|---|---|---|
| Up-front cost | $0 | about $17,000 to $26,000 (6 to 8 kW, before incentives) |
| Ongoing cost | about $1,900 a year, rising about 2.5% a year | low, often near zero, plus occasional maintenance |
| 25-year total | about $61,000 to $69,000 | about $18,000 to $30,000 all in |
| Year solar passes the grid | the bill never stops | about 9 to 15 years, then near-free power (EnergySage) |
| What you own at the end | nothing; the bill resets every month | a paid-off system and years of low-cost power |
| 25-year difference | the baseline | about $30,000 to $50,000 saved, more in high-rate states |
Our own calculation, based on an average US home using about 10,500 kWh a year at about 18 cents per kWh (EIA, as of 2026), grid rates escalating about 2 to 3 percent a year, and a 6 to 8 kW system at roughly $2.75 to $3.25 per watt on the DOE / NREL cost benchmark (DOE / NREL benchmark, as of 2026), before incentives and with no federal residential tax credit (Section 25D ended December 31, 2025). At a 2.5 percent yearly rate increase the 25-year grid total lands near $64,700. Solar’s all-in figure is mostly the system itself; maintenance is low, and a string-inverter replacement around year 10 to 15 may add about $1,500 to $2,500, while microinverter systems often need none. See our data sources and how we research each page. Your own numbers depend on your rate, roof, and usage; estimate your production with NREL’s free PVWatts calculator.
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How do solar and grid costs compare year by year?
Grid power is cheaper for the first several years, then owned solar pulls ahead for good. Because you pay for solar up front and the grid bill trickles out monthly, the two only cross once your running grid bill has added up past the price of the system. The table below is our own year-by-year running total for an average US home, so you can see the exact point where owning solar becomes the cheaper way to keep the lights on.
| After this many years | Cumulative grid cost (running total) | Cumulative owned-solar cost | Who is ahead |
|---|---|---|---|
| 5 years | about $10,000 | about $24,000 | grid is cheaper so far |
| 10 years | about $21,300 | about $24,000 | roughly even |
| about 11 to 12 years (payback) | about $24,000 to $26,000 | about $24,000 | solar pulls ahead |
| 15 years | about $34,100 | about $26,000 | solar |
| 20 years | about $48,500 | about $26,000 | solar |
| 25 years | about $64,900 | about $26,000 | solar, by about $39,000 |
Our own calculation for an average US home using about 10,500 kWh a year, starting at about $1,900 a year and escalating 2.5 percent annually (EIA, as of 2026), against an all-in owned system near $24,000 (6 to 8 kW at roughly $2.75 to $3.25 per watt on the DOE / NREL benchmark, as of 2026), with no federal residential tax credit (Section 25D ended December 31, 2025). The solar total ticks up near year 12 to 15 for a likely string-inverter replacement of about $1,500 to $2,500. This is a labeled estimate; your crossover point moves earlier at a higher rate and later where power is cheap. For a deeper look at the long-run savings, see how much solar can save over 20 years.
What you actually pay the utility, and why it keeps climbing
The reason grid power is expensive over time is that the rate never holds still. The US residential average is about 18 cents per kWh in 2026, up from about 7.83 cents in 1990, which works out to roughly 2 to 3 percent a year over the long run (EIA, as of 2026). That long-run pace has picked up lately: the residential average rose about 6 to 7 percent year over year through early 2026, faster than general inflation, and the EIA expects retail power prices to keep climbing (EIA Electric Power Monthly, as of 2026). An average home using about 10,500 kWh a year pays close to $1,900 today, and at a 2.5 percent yearly increase that same power costs more every year you stay on it. Grid rates are also higher in some regions than others: customers of utilities like Eversource in New England or Con Edison in New York pay well above the national average, about 30 cents per kWh in Massachusetts and about 28 cents in New York versus the roughly 18-cent US average (EIA, as of 2026), which is exactly where solar pulls ahead fastest; for the regional picture, see Northeast electricity rates in 2026. For the long view on that rising bill, see how solar stacks up against 25 years of utility power.
| US residential electricity (average) | When | Yearly cost for a 10,500 kWh home |
|---|---|---|
| 7.83 cents/kWh | 1990 | about $822 |
| about 18 cents/kWh | 2026 (EIA) | about $1,900 |
| about 23 cents/kWh | 2036, projected at 2.5% a year | about $2,430 |
The 2036 row is an illustration that carries the historical 2.5% annual increase forward; it is not a guarantee. Rates vary by utility and state (EIA, as of 2026).
This is the piece a one-month comparison misses. When you stay on the grid, you are signing up for 25 years of a bill that trends up, with nothing to own at the end. When you buy solar, you fix most of that cost at today’s price. For a closer look at the bill side, see how solar lowers your electricity bill.
How the grid-vs-solar math changes by state
The national average hides a wide spread, and your state’s rate is what decides how fast solar wins. The same 25-year method, run at three different electricity rates, shows why owned solar pays back in about 7 years in a high-rate state and closer to 14 in a cheap-power one. A higher rate means a bigger, faster-rising bill to replace, so the gap opens sooner. This is our own computation, not an installer estimate.
| Electricity market | 2026 residential rate | 25-year grid cost | 25-year net saving with owned solar | Cash payback |
|---|---|---|---|---|
| High-rate (Massachusetts) | about 30 cents/kWh | about $108,000 | about $84,000 | about 7 years |
| US average | about 18 cents/kWh | about $65,000 | about $41,000 | about 11 years |
| Low-rate (Idaho) | about 13 cents/kWh | about $46,000 | about $22,000 | about 14 years |
Our own calculation for a 10,500 kWh home, using each state’s 2026 residential rate (EIA, as of 2026) escalated about 2.5 percent a year, against a $17,000 to $26,000 owned system with no federal residential tax credit (Section 25D ended December 31, 2025). The net saving assumes an all-in solar cost near $24,000, and payback is the year cumulative grid savings pass the system cost. The low-rate row is anchored to a service area like Idaho Power’s, where residential rates run near 11 to 13 cents per kWh (EIA, as of 2026); real outcomes vary with sun, net-metering rules, and your own usage. For a high-rate worked example, see solar in Massachusetts.
What home solar actually costs in 2026
A typical home system costs about $17,000 to $26,000 before incentives, and that is the whole fuel bill for 25 years. At roughly $2.75 to $3.25 per watt on the DOE / NREL cost benchmark, a common 6 to 8 kW system lands in that range (DOE / NREL cost benchmark, as of 2026). Marketplace quotes are often lower: EnergySage puts the 2026 national average nearer $2.50 to $2.60 per watt, so shopping several bids can pull your price toward the bottom of that range (EnergySage, as of 2026). After the install, ongoing cost is small: routine maintenance is low and often near zero, and a string-inverter replacement around year 10 to 15 may add about $1,500 to $2,500, while many microinverter systems carry 25-year warranties and need none.
| System size | Typical 2026 cost before incentives | Covers about |
|---|---|---|
| 6 kW | $17,000 to $19,500 | three-quarters of an average home’s use |
| 7 kW | $19,500 to $23,000 | most of an average home’s use |
| 8 kW | $22,000 to $26,000 | nearly all of an average home’s use |
Costs at roughly $2.75 to $3.25 per watt on the DOE / NREL benchmark, before incentives (DOE / NREL, as of 2026); the EnergySage marketplace average runs lower, nearer $2.50 to $2.60 per watt (EnergySage, as of 2026). Production assumes about 1,350 kWh per kW each year; estimate yours with PVWatts. No federal residential tax credit applies to a 2026 purchase; the 30% credit (Section 25D) ended December 31, 2025.
Square footage is a weak guide to cost; your electricity use sets the system size. People often search for the price of solar for a 2,000 square foot house, but the roof area matters far less than what you actually use. A typical 2,000 square foot home uses somewhere around 10,000 to 11,000 kWh a year, which usually points to a 6 to 8 kW system in the $17,000 to $26,000 range before incentives. A smaller 1,500 square foot home with the same appliances can use just as much, and an all-electric home with a heat pump and an EV can use far more, so size the system to your last 12 months of usage, not your floor plan. For more cost scenarios by system size and location, see how much solar panels cost in 2026 and our full solar cost and savings guide, browse all our solar resources, or, for a line-item view of an installed system, a full breakdown of what going solar costs.
Net metering is what makes a system sized to your usage pay off. When your panels make more than you use, your utility credits the excess, which is how a 7 to 8 kW system offsets most of an average home’s bill rather than just the daytime slice. The exact credit depends on your state and utility; see how net metering credits your solar exports and the solar incentives that still apply in 2026.
Does the federal tax credit still cut the cost of solar?
No, not for a homeowner buying in 2026, and any cost comparison that still applies it is wrong. The 30% federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025 under the One Big Beautiful Bill Act, so a homeowner who buys solar with cash or a loan in 2026 cannot claim it (IRS Residential Clean Energy Credit; SEIA, as of 2026). A lot of older cost articles, calculators, and even AI-generated answers still subtract a 30% credit from the price, which makes solar look cheaper than it now is. The numbers on this page are calculated without it. For the full picture, see what the federal solar tax credit change means in 2026.
Note: If you are reading a solar quote in 2026, check whether it subtracts a 30% federal tax credit. That homeowner credit (Section 25D) ended after December 31, 2025, so a 2026 quote that still subtracts a 30 percent credit is overstating your savings. State programs and net metering can still help, and they vary by location, so ask your installer to show the cost with and without any incentive.
One federal credit still exists, but a homeowner does not claim it. The 30% homeowner credit (Section 25D) ended after December 31, 2025, but a separate commercial credit, Section 48E, can apply to a leased or power-purchase-agreement system, and the business that owns the panels claims it, not the homeowner (SEIA, as of 2026). That commercial credit is itself being phased down for solar, so it is not permanent either. On a lease or PPA you avoid the up-front cost but you also do not own the system, so the long-run grid-versus-solar math in this guide is strongest when you own.
When traditional electricity is still the cheaper choice
Solar does not win everywhere, and an honest comparison says so. Staying on the grid can be the better deal in these cases (DOE: Will I Save Money with Solar Energy?, as of 2026):
- Your rate is very low. Below roughly 13 to 14 cents per kWh, your yearly grid bill is small, so the 25-year gap shrinks and payback stretches well past 15 years.
- Your roof is shaded or faces north. Low production means low savings; estimate yours with PVWatts before assuming solar will cover your use.
- You are moving within a few years. If you sell before the system pays back, you are betting on resale value rather than your own bill savings.
- You rent or cannot use the roof. A renter cannot install on a roof they do not own, and community solar is usually the better path.
For everyone else, the 25-year gap is the whole point. If your rate is near or above the national average and your roof gets decent sun, the math in the table above is hard to beat, because you are replacing a rising bill with a fixed, one-time cost. To weigh it for your situation, see the full financial case for whether solar panels are worth it, and for high-rate examples see solar in Massachusetts or New York, where the comparison favors solar most.
Beyond the bill: ownership, price certainty, and home value
The cost comparison undersells two things a bill cannot give you: a fixed price and an asset. Grid power is a cost with no end and no equity. A paid-off solar system is the opposite: you have locked in most of your electricity cost at today’s price, which is its own kind of return when rates keep climbing. Owned systems can also add to a home’s value, though that depends on your market and is separate from the bill savings, so treat resale value as a bonus rather than the core case. The dependable part of the math is the one in the table: a fixed cost now against a rising bill for 25 years.
How to compare your own solar and grid costs
A national average is a starting point; your address is the real answer. Your rate, your roof, your usage, and your state’s net-metering rules decide whether solar beats the grid for you and by how much. Rather than chasing a “best installer” list, get a written quote and screen any company against objective criteria:
- A valid state contractor or electrical license, and ideally NABCEP certification, the industry’s professional standard.
- A clear production estimate and a workmanship and equipment warranty in writing.
- A quote that shows your 25-year cost with and without incentives and uses today’s rate and program values, not last year’s.
- Experience with your utility’s interconnection and net metering, so your savings start on time.
For a full checklist, see the right questions to ask a solar installer. MySolarFY matches you with licensed installers that serve your area so you can compare real local quotes against your current bill, with no obligation.
Find your own number first. It takes a minute and tells you which side of the comparison you are on: (1) read the cents-per-kWh rate off your latest electricity bill, (2) compare it to the roughly 18-cent US average, where at or above 18 cents you are squarely in the win zone, around 14 to 18 cents usually still pays back over 25 years, and below about 13 to 14 cents is worth a careful second look, then (3) check what is actually available at your address.
Compare solar to your current power bill at your address →
Frequently asked questions
Is solar cheaper than grid electricity in 2026? Over 25 years, yes for most homes with decent sun and a near-average or higher electricity rate. An average US home spends roughly $61,000 to $69,000 on grid power over 25 years, because rates near 18 cents per kWh keep rising about 2 to 3 percent a year (EIA, as of 2026). Owning a typical 6 to 8 kW system costs about $18,000 to $30,000 all in over the same period (DOE / NREL, as of 2026). The monthly solar payment can look bigger than one power bill, but the bill never ends and the system does, which is why solar usually wins on the full timeline.
How much does the average home pay for electricity over 25 years? About $61,000 to $69,000 in most cases. An average US home uses around 10,500 kWh a year, and at about 18 cents per kWh that is close to $1,900 today (EIA, as of 2026). Residential rates have risen roughly 2 to 3 percent a year for decades, so the yearly cost climbs each year you stay on the grid. Carry that forward over 25 years and the total lands around $61,000 at a 2 percent increase and near $69,000 at 3 percent, before any fixed monthly customer charges.
How much do solar panels cost for a 2,000 square foot house? House size does not set the cost; your electricity use does. A 2,000 square foot home typically uses about 10,000 to 11,000 kWh a year, which usually points to a 6 to 8 kW system costing about $17,000 to $26,000 before incentives at roughly $2.75 to $3.25 per watt on the DOE / NREL benchmark (DOE / NREL, as of 2026); marketplace quotes often run lower, nearer $2.50 to $2.60 per watt (EnergySage, as of 2026). A smaller home with the same appliances can need just as much, and an all-electric home with a heat pump and an EV can need more, so size the system to your last 12 months of usage, not your square footage. No federal residential tax credit applies to a 2026 purchase; Section 25D ended December 31, 2025.
How much does home solar cost now that the federal tax credit has ended? A typical 6 to 8 kW system costs about $17,000 to $26,000 before incentives in 2026, at roughly $2.75 to $3.25 per watt on the DOE / NREL benchmark, with EnergySage marketplace quotes often lower near $2.50 to $2.60 per watt (DOE / NREL; EnergySage, as of 2026). The 30% federal Residential Clean Energy Credit (Section 25D) ended after December 31, 2025, so a 2026 buyer pays the full cost and cannot claim it (IRS, as of 2026). State programs and net metering can still lower the net cost, and they vary by location, so confirm what applies at your address before you budget.
Is the 30% solar tax credit gone in 2026? Yes, for homeowners. The 30% federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025 under the One Big Beautiful Bill Act, so a homeowner who buys solar in 2026 cannot claim it (IRS; SEIA, as of 2026). Many older articles, online calculators, and AI answers still subtract a 30% credit, which makes solar look cheaper than it is in 2026, so treat any estimate that still applies it as out of date. The numbers on this page are calculated without it.
Do solar panels actually lower your electric bill? Yes, for a system sized to your usage in a net-metering state, though how much depends on your rate, roof, and utility rules. Panels offset the power you would have bought from the utility, and net metering credits the excess your system sends back, so a well-sized system can cut most of an average home’s bill. You usually still pay a small fixed monthly connection charge to stay grid-tied. The savings are largest where rates are high, about 30 cents per kWh in Massachusetts versus the roughly 18-cent US average (EIA, as of 2026).
Why is my electric bill still high even though I have solar? A few normal reasons. You still pay a fixed monthly customer or connection charge to stay grid-tied, even in a month when your panels cover all your usage. Your system may be sized to offset part, not all, of your use. At night and on cloudy days you draw grid power and lean on net-metering credits, which true up over a month or a year, so a single bill can look high before the credits settle. Rising usage from a new EV, air conditioner, or heat pump can also outpace a fixed-size array. See how net metering credits your solar exports for how the credits work.
How long until solar is cheaper than paying the utility? For a cash purchase in 2026, a typical payback is about 9 to 15 years, shorter in high-rate states and longer where power is cheap (EnergySage, as of 2026); see how the solar payback period works for the full method. Payback is the year your cumulative grid savings pass the system’s cost; after that, the power is nearly free for the rest of the 25-year warranty. It is longer than a couple of years ago because the federal homeowner credit ended after December 31, 2025, so you now carry the full system cost. A higher electricity rate and good sun both shorten it.
When is staying on the grid still cheaper than solar? Grid power can be the better deal when your electricity rate is very low (below roughly 13 to 14 cents per kWh), when your roof is heavily shaded or faces north, when you plan to move within a few years, or when you rent and cannot use the roof (DOE, as of 2026). In those cases the 25-year savings shrink or the system may not pay back before you sell. A reputable installer will give you a straight production estimate and tell you honestly when a roof is not a strong candidate, rather than pushing a system that will not pay off.
How do I compare solar and grid costs for my own home? Pull your last 12 months of electricity use and your current rate from your utility bill, then get a written solar quote that shows the 25-year cost with and without incentives and uses your real usage. Estimate your roof’s output first with NREL’s free PVWatts calculator so you can sanity-check the installer’s production number. MySolarFY is a free service that matches you with licensed installers who serve your area, so you can compare real local quotes against your current power bill, with no obligation and no credit pull to check.
How much can solar save over 20 years? For an average US home, owned solar saves roughly $30,000 to $45,000 over 20 years, and more in high-rate states. The saving is the rising grid bill you avoid, less the one-time system cost. At about $1,900 a year rising 2.5 percent annually, 20 years of grid power runs near $48,500, while an owned system costs about $24,000 to $26,000 all in (EIA; DOE / NREL, as of 2026). See the full 20-year savings breakdown for how the number shifts with your rate and usage.
Does going solar still make sense in 2026 now that the tax credit ended? For most homes with a near-average or higher electricity rate and decent sun, yes, because the core math has not changed: you are still replacing a rising 25-year bill with a mostly fixed, one-time cost. What changed is that the 30% federal Residential Clean Energy Credit (Section 25D) ended after December 31, 2025, so a 2026 buyer carries the full system cost and payback stretches to about 9 to 15 years instead of the shorter window buyers saw a couple of years ago (IRS, as of 2026). State programs and net metering still help and vary by location, so confirm what applies at your address.
Reviewed by the MySolarFY team. Figures were verified against the linked EIA, IRS, DOE / NREL, and EnergySage sources as of July 2026; electricity rates, solar costs, and incentive rules change, so confirm current terms with your utility and a licensed installer before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY editorial team and how we work, or read our data sources and how we research each page.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase; on a lease or PPA the incentives and any tax benefits go to the company that owns the system, not the homeowner. Homeowners do not get the federal residential credit that ended after December 31, 2025. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
