As of July 2026, MySolarFY’s model estimates that a representative owned 8 kW home solar system saves roughly $8,000 to $55,000 in net electricity over 20 years, with an average-rate home landing near $24,000 after the system pays for itself. How much you actually save depends mostly on four things: your electricity rate, how much power you use, your system size, and your local net-metering or export rules. The range is wide, so treat any single figure as an estimate and a starting point, not a quote or a guarantee.
The 20-year answer, in six lines (MySolarFY estimate, as of July 2026)
- The average U.S. home pays about 18.83 cents per kWh for electricity (EIA, as of March 2026), and that price is what solar replaces.
- A representative owned system is about 8 kW (U.S. DOE, as of 2026), costing near $3.50 per watt in cash, about $28,000 before incentives (LBNL 2025 data update, as of 2025).
- The 30% federal homeowner credit is gone. Section 25D ended for systems placed in service after December 31, 2025 (IRS, as of 2026), so our math carries no federal credit.
- 20-year net savings in our scenarios: about $8,000 at a low rate, $24,000 at the national-average rate, and $55,000 at a high rate, after the system pays for itself.
- Your electricity rate is the biggest lever, which is why the same system saves roughly seven times more in a 30-cent state than the cash it takes to reach break-even in a 13-cent state.
- Leases, PPAs, and export-rate states change the picture: if you do not own the system, or your utility credits exports below retail, your homeowner savings are lower.
How much can solar save over 20 years?
Over 20 years, a paid-off, owned home solar system usually saves a homeowner somewhere in the tens of thousands of dollars, but the honest range runs from a few thousand to well over fifty thousand. The single number that moves it most is your electricity rate. Solar does not pay you cash; it cancels a bill you would otherwise keep paying, so a household that buys expensive power saves far more than one that already buys cheap power.
Two other things stretch the gap over two decades. Electricity prices tend to climb, so the bill you avoid in year 20 is larger than the one you avoid in year 1. Working against that, panels lose a little output each year. NREL’s analysis of the operating U.S. solar fleet puts whole-system losses at a median of about 0.75% per year (U.S. DOE / NREL PV Fleet, as of 2026), so a system still makes around 85% of its original output after 20 years. The table below runs both effects year by year.
For the shorter question of when the system breaks even, see our solar payback period guide; for the full buy-or-not decision, see are solar panels worth it and our updated take on whether solar is worth it in 2026 now that the federal credit has ended. This page is about the 20-year cumulative dollars.
Our 20-year cumulative solar savings estimate
We built the table below from the cited figures above, run year by year for 20 years. It is an illustration, not a quote: it assumes you own the system, that it offsets power at close to retail value (near 1:1 net metering), and the rate and degradation assumptions listed under the table. Your real number depends on your roof, your utility, and your usage. To estimate your own production first, use NREL’s free PVWatts calculator.
| Rate scenario (year 1) | Year-1 bill savings | 20-year gross savings | Less system cost | 20-year net savings | Rough payback |
|---|---|---|---|---|---|
| Low, about 13 cents/kWh (EIA state-range low, e.g. WA, ID, LA) | ~$1,460 | ~$36,200 | −$28,000 | ~$8,200 | ~17 years |
| Average, 18.83 cents/kWh (U.S. average, EIA) | ~$2,110 | ~$52,400 | −$28,000 | ~$24,400 | ~12 years |
| High, about 30 cents/kWh (EIA state-range high, e.g. CA, MA, CT) | ~$3,360 | ~$83,500 | −$28,000 | ~$55,500 | ~8 years |
Illustrative estimate for a representative owned 8 kW system, not a quote or a guarantee. The national-average rate is the EIA figure; the low and high rows bracket it with real state extremes (residential rates run near 11 to 13 cents in states like Washington, Idaho, and Louisiana, and near 28 to 34 cents in California, Massachusetts, and Connecticut, per EIA state retail data). Look up your own state’s residential rate on the EIA and read the row closest to it. Savings are figured as the retail value of the power the system offsets, so export-rate states (see below) come in lower.
Notice what the table is really showing: the system cost is the same $28,000 in every row, yet the 20-year net result swings from about $8,000 to about $55,000. That entire swing is the electricity rate. It is also why a homeowner in a high-rate state reaches break-even in roughly 8 years while a low-rate home may need around 17. For a state-by-state view of that rate effect over the long run, see solar vs utility power over 25 years.
This is where the Northeast stands out. Residential rates in states like Massachusetts and Connecticut sit near the high end of the EIA range, which is exactly the condition that pushes a 20-year result toward the top of our scale rather than the bottom. The same panels that save a modest amount in a cheap-power state can save several times more in a high-rate Northeast one, because every kWh they make cancels a more expensive kWh. The honest caveat is net metering: a few high-rate states have moved to lower export rates, so confirm your utility still credits exported power close to retail before you count on the high end of the range.
The assumptions behind the table
| Input | Value used | Source |
|---|---|---|
| System size | 8 kW (representative owned system) | U.S. DOE representative residential system, 2026 |
| Installed cost (cash, before incentives) | $3.50 per watt, about $28,000 | LBNL 2024 median, 2025 data update |
| Federal tax credit applied | None (Section 25D ended 12/31/2025) | IRS, 2026 |
| Year-1 production | ~1,400 kWh per kW, about 11,200 kWh | NREL PVWatts / EIA small-scale PV |
| System degradation | 0.75% per year | NREL PV Fleet median, 2026 |
| Electricity-rate escalation | 3% per year | EIA long-run history (2% to 3% nominal; faster since 2021) |
| Bill offset value | Near full retail (1:1 net metering assumed) | Assumption; lower in export-rate states |
Change any input and the result moves. If your rates stay flat instead of rising 3% a year, the average-rate 20-year net drops from about $24,000 to around $12,000. If you buy expensive power, it goes the other way. That is the point of showing the math: you can slot in your own numbers. See how we source and check our figures in our data and methodology.
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A worked example: the average-rate home, year by year
Numbers in a range are easy to wave off, so here is the average-rate row walked out year by year. We take the same 8 kW system making about 11,200 kWh in year one, value that power at the U.S. average 18.83 cents per kWh, then apply our stated 3% yearly rate rise and 0.75% yearly production loss and subtract the $28,000 cash cost. This is the same MySolarFY model that produced the table above, just shown as a running total so you can see exactly when the system flips from a cost to a gain.
| Year | Cumulative bill savings | Net position (after $28,000 cost) | Where you stand |
|---|---|---|---|
| 1 | ~$2,100 | −$25,900 | Just installed; paying the system back |
| 5 | ~$11,000 | −$17,000 | Well into payback |
| 10 | ~$23,300 | −$4,700 | Almost even |
| 12 | ~$28,700 | ~$700 | Break-even |
| 15 | ~$37,100 | +$9,100 | Now banking savings |
| 20 | ~$52,400 | +$24,400 | Two decades of net savings |
MySolarFY estimate, as of July 2026, for the average-rate scenario in the table above. Figures are rounded and assume ownership and near-retail net metering. The pattern is the real takeaway: for most of the first decade you are still paying the system off, and the bulk of the net savings lands in the back half. It is why the honest measure of solar is the 20-year total, not year-one savings. If you would finance rather than pay cash, interest shifts these lines; see solar financing options and how solar loans work.
What decides how much you actually save?
Five variables drive almost all of the spread you saw in the table.
- Your electricity rate. This is the biggest one. Every kWh your roof makes cancels a kWh you would have bought, so the more your utility charges, the more each solar kWh is worth. At 30 cents it is worth more than twice what it is worth at 13 cents.
- How much power you use. Solar saves you money only on the power it offsets. A high-usage home with room on the roof captures more of the benefit than a small, low-usage home.
- Your system size and production. A bigger, well-sited array in a sunny place makes more kWh, but it also costs more up front, so the goal is to size close to your annual usage rather than as large as possible.
- Net metering versus an export rate. If your utility credits the power you send back at close to the retail rate (net metering), your savings look like the table. If it pays a lower export rate for what you send back, as several states now do, you save less unless you use or store more of your own power.
- Whether you own the system. A cash or loan purchase keeps the savings and any state incentives with you. A lease or power purchase agreement (PPA) can mean no up-front cost, but the company that owns the panels keeps the incentives, and you get a lower or fixed power price instead.
Do you actually save money with solar?
For most owner-occupied homes with decent sun and an average-or-higher electricity rate, yes, over the full life of the system. The savings are not instant, though. You are trading a large up-front cost (or a long financing term) for two decades of smaller electric bills, so the early years are about paying the system back and the later years are where the net savings pile up. In our average-rate scenario the system is still in the red for roughly the first 12 years and does most of its saving after that.
Solar is a weaker deal in three situations: where electricity is cheap, where the utility credits exports well below retail, and where the roof is shaded, small, or wrong-facing. Solar is not free either: an ad promising “free solar” is really describing a lease or PPA, a long-term contract with monthly payments rather than a giveaway. To see whether your own bill even supports it, read can solar eliminate your electric bill.
Why is my electric bill not zero after solar?
Plenty of solar owners are surprised their bill does not hit zero, and there are a few normal reasons. Most utilities charge a fixed monthly connection or service fee that solar cannot offset, so you keep paying that even in a sunny month. Your panels also do not produce at night or evenly across the seasons, so you draw grid power on winter evenings and bank credits in summer. And if your system was sized smaller than your usage, it was never going to cover 100% of the bill. In export-rate states the credit for the power you send back is worth less than the power you buy, which widens the gap further. None of these mean solar failed; they are why the honest measure is 20-year net savings, not a zero bill.
What the ended federal tax credit means for your 20-year math
The federal residential solar tax credit, the 30% Residential Clean Energy Credit under Section 25D, ended for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act, so a homeowner who has solar installed in 2026 cannot claim it (IRS, as of 2026). That is why our table starts from the full $28,000 cash cost with no federal credit subtracted. You will still find pages and search results implying the 30% credit is available; for a 2026 homeowner-buyer it is not.
Because the homeowner credit (Section 25D) ended after December 31, 2025, there is no federal credit for an owned system in 2026. A separate commercial credit, Section 48E, can apply to leased and PPA systems, but the business that owns the system claims it, not the homeowner, so it does not lower your out-of-pocket cost on an owned system. State and utility incentives (net metering, state rebates, SRECs where they exist) were not affected by the federal change and still improve the math in many states. MySolarFY does not provide tax advice; confirm your situation with a tax professional. For the wider ownership question, see how much do solar panels cost and our Solar Cost and Savings Guide.
Owning versus leasing over 20 years
| Path | Up-front cost | Who keeps incentives | 20-year savings profile |
|---|---|---|---|
| Cash purchase | Full system cost | You, the owner | Highest lifetime savings; you carry the up-front cost |
| Solar loan | Little to none, financed | You, the owner | Ownership savings, minus loan interest over the term |
| Lease or PPA | $0-up-front where eligible | The third-party owner | A lower or fixed power bill, not the full savings; a 20 to 25 year contract |
The table on this page assumes a cash purchase, which is why it shows the largest 20-year net. A loan spreads the cost and keeps ownership with you, so the lifetime savings are similar but reduced by interest. A lease or PPA can remove the up-front cost, but you are buying cheaper power rather than banking the full savings, and the system owner keeps the incentives. None of these is free solar, and solar is not free, each is just a different way to pay. To weigh the routes, compare solar financing options and read our solar lease vs PPA breakdown.
Frequently asked questions
How much can solar save over 20 years?
For a representative owned 8 kW system, our year-by-year model puts 20-year net savings at roughly $8,000 at a low electricity rate, about $24,000 at the U.S. average rate of 18.83 cents per kWh (EIA, as of March 2026), and about $55,000 at a high rate, all after the system pays for itself. The number is driven mostly by your local rate, plus your usage, system size, and net-metering rules. It is an illustration, not a quote, and assumes ownership and near-retail net metering.
Do solar panels really save money?
For most owner-occupied homes with decent sun and an average-or-higher rate, yes, measured over the life of the system. Solar cancels a bill you would otherwise keep paying, and electricity prices have historically risen about 2% to 3% a year (EIA, as of 2026), so the avoided bill grows over time. The savings come later, though: the early years pay the system back, and most of the net savings land in the second half of the 20 years.
Why is my electric bill still not zero with solar?
Because most utilities charge a fixed monthly service fee solar cannot offset, panels do not produce at night or evenly year-round, and a system sized smaller than your usage never covers the whole bill. In states that credit exported power below the retail rate, the power you send back is worth less than the power you buy, which also keeps the bill above zero. The right measure is long-run net savings, not a zero bill.
How long do solar panels last, and how much do they degrade?
Most residential panels carry 25-year performance warranties and keep producing well beyond that. NREL’s analysis of the operating U.S. fleet finds whole systems lose a median of about 0.75% of output per year (U.S. DOE / NREL, as of 2026), slower in cool climates and faster in hot ones, so a system still makes roughly 85% of its original output after 20 years. Our table already builds that decline in each year.
Does the federal tax credit still help my savings?
Not for a 2026 homeowner-buyer. The 30% Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025 (IRS, as of 2026), so our math includes no federal credit. A separate commercial credit (Section 48E) can apply to leased or PPA systems, but the company that owns the system claims it, not the homeowner. State and utility incentives were not affected. This is general information, not tax advice.
Is a bigger system always more savings?
No. A larger array makes more power, but it also costs more up front and can overshoot what your home actually uses, and many utilities pay less for surplus power sent to the grid than the retail price you avoid. The sweet spot is usually to size the system close to your annual usage so most of what it makes offsets your own full-price power. An installer can model this against your utility’s specific net-metering or export rules.
Will solar still save money if I lease instead of buy?
Usually less. A lease or PPA can mean $0-up-front where you qualify, but you are buying cheaper power under a 20 to 25 year contract rather than banking the full savings, and the company that owns the panels keeps the incentives. If your goal is the largest 20-year net, a cash purchase or a solar loan keeps the savings and incentives with you. Check what you qualify for before deciding.
Written by the SolarFY Editor and reviewed by the MySolarFY research team. Reviewed July 2026. Figures were verified against EIA, IRS, U.S. DOE, NREL, and LBNL sources as of July 2026; electricity rates, degradation research, and installed costs change, and the 20-year table is an illustration built from stated assumptions, not a quote or a guarantee. See how we source and check our numbers in our data and methodology. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation.
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” and “$0-up-front” refer 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 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 is not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
