Solar vs Utility Power: What Each Costs Over 25 Years

Last updated June 2026, and reviewed by the SolarFY Editor against the linked EIA, DOE / NREL, IRS, and SEIA sources.

Over 25 years, owned solar costs less than utility power for most well-sited homes, but the honest answer depends on your rate, your sun, and how you pay. Utility power looks cheap because you pay it in small monthly pieces, but those pieces never stop and they rise about 2 to 3 percent a year. Solar costs more up front and then runs at almost nothing. On the US average rate, staying on the grid runs roughly $67,000 over 25 years while owning a typical system costs about $23,000 all in, and solar passes the grid around year 10. This guide shows the year-by-year math, the crossover point, and when utility power is still the cheaper call.

Does solar cost less than utility power over 25 years?

For most homes with decent sun and a near-average or higher electricity rate, yes, over the full 25 years, though not in month one. A solar payment can look bigger than a single power bill, which is why the top of the search results is full of “solar costs more than my bill” stories. The difference is that the utility bill never ends and it climbs every year, while an owned system is a one-time cost you stop paying once it is done. On the US average residential rate of about 18.83 cents per kWh (EIA, as of March 2026), an average home spends far more on 25 years of rising grid power than on buying solar once.

Solar vs utility power cost: the 25-year numbers up front

• The average US home pays about $1,977 a year for utility power, at 18.83 cents per kWh on about 10,500 kWh of use (EIA rate, as of March 2026; EIA usage, as of 2026).
• Over 25 years that utility power totals roughly $67,000, because residential rates have risen about 2 to 3 percent a year for decades (EIA electricity data, as of 2026).
• A typical 7 kW owned system costs about $21,000 before incentives, then runs on near-zero fuel cost (DOE / NREL cost benchmark; EnergySage, as of 2026).
• Owned solar passes utility power around year 10 on these average inputs, then delivers near-zero-cost power for the rest of the 25-year warranty life.
• 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; SEIA, as of 2026).
• Utility power is sometimes still cheaper, where rates are very low, the roof is shaded, or you will move within a few years.

The 25-year cost comparison, year by year

Here is the running total for both sides, so you can see exactly where owning solar passes staying on the grid. The utility column is an average home’s bill compounding at 2.5 percent a year; the solar column is a one-time purchase you own outright. This is an illustration built from public averages, not a quote for your home.

By the end of…	Stay on utility power (cumulative)	Own a solar system (cumulative)
Year 1	about $1,977	about $21,000 (system, paid once)
Year 5	about $10,400	about $21,000
Year 10 (crossover year)	about $22,150	about $21,000
Year 15	about $35,450	about $23,000 (with a mid-life inverter)
Year 20	about $50,500	about $23,000
Year 25	about $67,500	about $23,000
What you own at the end	nothing; the bill resets every month	a paid-off system and years of low-cost power

Illustrative, not a quote. Based on an average US home using about 10,500 kWh a year at 18.83 cents per kWh (EIA, as of March 2026), utility rates escalating 2.5 percent a year (the long-run US residential trend, EIA, as of 2026), and a 7 kW owned system at about $3.00 per watt for roughly $21,000 before incentives (DOE / NREL benchmark; EnergySage, as of 2026), with a $1,500 to $2,500 inverter replacement around year 12 to 15 and no federal residential tax credit (Section 25D ended December 31, 2025). Your own numbers depend on your rate, roof, usage, and how you pay. Estimate your production with NREL’s free PVWatts calculator, and see how we build these figures on our data and methodology page.

The crossover year is the whole point. For the first several years the utility looks cheaper because you have not paid off the system yet. Around year 10 the cumulative bills catch up to the system’s cost, and from there every year of near-zero-cost power pulls further ahead. By year 25 the gap is roughly $44,000 in this illustration, and wider in high-rate states. For the shorter, month-by-month version of this comparison, see home solar vs traditional electricity cost; this page focuses on the full 25-year running total and the crossover year.

Why utility power keeps getting more expensive

The reason grid power costs so much over time is that the rate never holds still. The US residential average is about 18.83 cents per kWh in a spring 2026 month, up from roughly 8 cents in 1990, a long-run increase of about 2 percent a year (EIA historical prices, as of 2026). The 2.5 percent a year this page uses sits a little above that long-run trend but well below what has happened lately: residential prices rose about 9.5 percent in the year to January 2026 alone (EIA Electricity Monthly Update, as of June 2026). It is a middle-of-the-road assumption, not a worst case. An average home using about 10,500 kWh a year pays close to $1,977 today, and each year that same power costs more. Rates also run far higher in some regions: customers of utilities like Eversource in New England or Con Edison in New York often pay around 28 to 30 cents per kWh, well above the roughly 19-cent US average (EIA, as of 2026), which is exactly where solar pulls ahead fastest.

US residential electricity (average)	When	Yearly cost for a 10,500 kWh home
about 8 cents/kWh	1990	about $840
about 18.83 cents/kWh	spring 2026 (EIA)	about $1,977
about 24 cents/kWh	2036, projected at 2.5% a year	about $2,530

The 2036 row carries the historical 2.5 percent annual increase forward; it is an illustration, not a guarantee, and rates vary by utility and state (EIA, as of 2026). This is what a one-month comparison misses: with utility power you are signing up for 25 years of a rising bill with nothing to own at the end. See how solar changes your monthly electricity bill.

What owning solar actually costs in 2026

A typical home system costs about $18,000 to $26,000 before incentives, and that is close to your whole energy cost for 25 years. At roughly $2.75 to $3.25 per watt, a common 6 to 8 kW system lands in that range, with a 7 kW system around $21,000 (DOE / NREL cost benchmark; EnergySage, as of 2026). After that, ongoing cost is small: routine maintenance is low, and a string-inverter replacement around year 12 to 15 may add about $1,500 to $2,500, while many microinverter systems carry 25-year warranties and need none. For a full line-item view, see how much solar panels cost and whether solar panels are worth it as a financial decision.

One honest caveat the table simplifies: most grid-tied solar homes still pay a small fixed utility connection charge each month even when their panels cover all their usage, because net metering credits your energy but not the fixed service fee. That charge is usually a few dollars to around twenty dollars a month depending on your utility, and it is why solar takes your bill close to zero rather than exactly zero. See whether solar can eliminate your electric bill for how that works.

Does the federal tax credit still lower the cost of solar?

No, not for a homeowner buying in 2026, and any comparison that still subtracts it is overstating your savings. 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). The numbers on this page are calculated without it. A lot of older cost articles and calculators still subtract a 30 percent credit from the price, which makes solar look cheaper than it now is, so check any quote you are reading.

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 (PPA) system, and the business that owns the panels claims it, not the homeowner (SEIA, as of 2026). On a lease or PPA you avoid the up-front cost but you also do not own the system, so the 25-year ownership math on this page is strongest when you buy. State programs and net metering can still lower the net cost and vary by location, so confirm what applies at your address. SolarFY does not provide tax advice; consult a tax professional.

When is utility power still the cheaper choice?

Solar does not win everywhere, and an honest comparison says so. Staying on utility power 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 bill is small, so the 25-year gap shrinks and payback stretches well past 15 years. In low-cost states like Idaho, where the residential average is about 12.7 cents per kWh (EIA, as of April 2026), a shaded or small roof may never pay back within the warranty.
• 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 crossover is the point. If your rate is near or above the national average and your roof gets decent sun, replacing a rising bill with a fixed, one-time cost is hard to beat.

How to run these numbers for your own home

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 utility power for you and by how much. To do it yourself: (1) read the cents-per-kWh rate off your latest electricity bill, (2) compare it to the roughly 19-cent US average, where at or above that 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) estimate your roof’s output with PVWatts and check what is actually available at your address.

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 written workmanship and equipment warranties, a quote that shows your 25-year cost with and without incentives using today’s rate, and real experience with your utility’s interconnection and net metering. SolarFY matches you with licensed installers that serve your area so you can compare real local quotes against your current bill, with no obligation.

Frequently asked questions

Does solar cost less than utility power over 25 years? For most homes with decent sun and a near-average or higher electricity rate, yes, over the full 25 years. On the US average rate of 18.83 cents per kWh, an average home spends roughly $67,000 on utility power over 25 years as rates rise about 2.5 percent a year (EIA, as of March 2026), while owning a typical 7 kW system costs about $21,000 to $23,000 all in (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, so solar usually wins on the full timeline.

In what year does solar pass utility power? On average US inputs, owned solar passes utility power around year 10, then delivers near-zero-cost power for the rest of its 25-year warranty life. The exact crossover depends on your rate and how you pay: a higher electricity rate and good sun move it earlier, a low rate or shaded roof push it later. This is the number a one-month “solar costs more than my bill” comparison misses, because it only shows the years before the system is paid off.

How much does the average home pay for utility power over 25 years? About $58,000 to $70,000 in most cases, and roughly $67,000 on the US average rate. An average US home uses around 10,500 kWh a year, and at 18.83 cents per kWh that is close to $1,977 today (EIA, as of March 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, before any fixed monthly customer charges.

How much does home solar cost now that the federal tax credit has ended? A typical 6 to 8 kW system costs about $18,000 to $26,000 before incentives in 2026, at roughly $2.75 to $3.25 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 vary by location, so confirm what applies at your address.

Do solar panels lock in your electricity price? Largely, yes, if you own the system. Buying solar fixes most of your electricity cost at today’s price instead of a utility rate that trends up 2 to 3 percent a year (EIA, as of 2026), which is a form of return of its own when rates keep climbing. A lease or PPA is different: it can carry an annual price escalator, so read the contract terms before assuming the payment stays flat.

When is staying on utility power still cheaper than solar? Utility power can be the better deal when your 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.

What is the biggest downside of solar compared to utility power? The up-front cost. Utility power asks for nothing today and a bill every month, while solar asks for most of its 25-year cost at the start, which is why the payback takes years and why it does not fit every home. That gap got wider in 2026 because the 30% federal homeowner tax credit (Section 25D) ended after December 31, 2025, so a buyer now carries the full system cost (IRS, as of 2026). Financing spreads the cost out, and a lease or PPA can remove the up-front outlay entirely for those who qualify, but a lease trades ownership and the best long-run savings for a lower entry cost.

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Reviewed by the SolarFY Editor. Figures were verified against the linked EIA, IRS, DOE / NREL, SEIA, and EnergySage sources as of June 2026; electricity rates, solar costs, and incentive rules change, so confirm current terms with your utility and a licensed installer before you decide. SolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more on our data and methodology page and about how SolarFY works.

SolarFY 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.