Are solar panels worth it?
Last edited
Author
Andrew Blok
Electrification and Solar Writer and Editor
Editor
Andrew Giermak
Solar and Electrification Writer and Editor
Seeing solar panels go up on roofs around your neighborhood? Hearing those neighbors brag about their low energy bills? (Or complain about their high ones?) Wondering if those solar panels are actually worth it?
Home solar panels can reduce electricity bills and deliver thousands of dollars in savings over their lifetimes. Here’s when solar panels are worth it, and how to determine if they will be for you.
How much do solar panels cost?
When you buy solar panels, your out-of-pocket costs for solar panel installation can vary greatly. On average, residential solar panels cost $2.36-$3.24 per watt based on state averages from Palmetto estimates as of mid-2026.
But the actual cost to you can vary depending on where you live, how big your system is, and what incentives you qualify for. When you are talking to a solar advisor about your options, make sure the estimate includes both materials and labor.
Factors that will influence your solar panel cost include:
- Hardware and equipment brand, make, and model
- Installation and labor
- Loan fees, if applicable
- Permitting
- Size of your system
- Installation complexity
- Additional features, such as a solar battery
State, local, or utility company incentives and programs might reduce your costs.
- State tax credits
- Tax exemptions or exclusions
- Net metering programs
- Solar renewable energy certificates
- Low-interest loan programs
Solar panels typically require little maintenance, but it can represent an addition cost. The good news: quality solar panels are durable and can last 25 or more years.
Leasing solar panels
When you lease solar panels, you swap the upfront cost for predictable monthly payments that cover purchase, installation, maintenance, and most repairs. This means you could save as soon as your first electric bill, savings can vary from month to month and year to year, just like when you purchase solar panels.
As you’re shopping, make sure the expected cost of your lease payment and remaining electric bill is smaller than your existing electric bill.
How much can solar panels save?
You should always look at your solar savings annually, or over multiple years, since savings vary with the season. Typically, they’re largest in the summer and smallest in the winter.
Using estimates from Palmetto installations in the second half of 2025, you can see that savings vary by location.
| State | Avg. est. monthly savings | Avg. est. 25-year savings | Avg. est. payback period |
|---|---|---|---|
| Arizona | $144 | $63,152 | 11.1 |
| California | $238 | $104,508 | 6.2 |
| Colorado | $131 | $57,602 | 10.7 |
| Connecticut | $289 | $126,542 | 7.3 |
| Florida | $192 | $84,120 | 10.6 |
| Georgia | $106 | $46,433 | 15.8 |
| Illinois | $136 | $59,764 | 14 |
| Indiana | $131 | $57,744 | 13.8 |
| Kansas | $126 | $55,540 | 12.9 |
| Kentucky | $109 | $48,012 | 16 |
| Maine | $223 | $97,675 | 9 |
| Maryland | $212 | $93,078 | 10 |
| Massachusetts | $289 | $126,679 | 6.6 |
| Michigan | $72 | $31,535 | 18.9 |
| New Hampshire | $170 | $74,732 | 11.9 |
| New Jersey | $190 | $83,522 | 9.9 |
| New Mexico | $131 | $57,611 | 9.7 |
| New York | $247 | $108,227 | 7.1 |
| North Carolina | $149 | $65,556 | 11.7 |
| Ohio | $133 | $58,434 | 12.5 |
| Oklahoma | $90 | $39,677 | 17.2 |
| Oregon | $102 | $44,913 | 15.1 |
| Pennsylvania | $189 | $83,109 | 10 |
| Rhode Island | $224 | $9,847 | 8 |
| South Carolina | $101 | $44,209 | 12.1 |
| Texas | $164 | $72,119 | 11 |
| Vermont | $185 | $81,302 | 10.5 |
| Virginia | $162 | $70,978 | 11.8 |
| Wisconsin | $212 | $92,972 | 11.4 |
(Average savings estimates and payback periods are based on real Palmetto installations purchased with cash and loans in the second half of 2025, but do not necessarily reflect the value you would see. Reach out for a personalized savings estimate. Visit individual state pages for methodology and assumptions.)
A solar panel payback period is the amount of time it takes for savings from solar panels to match the cost of installing them. The table above includes average estimates for real installations in the above states. When you lease, you won’t have a payback period, since you’ll have no upfront cost. You can calculate your payback period by dividing the upfront cost of your solar panels by your annual savings.
For example:
$11,200 (Cost of solar panel installation)
Assuming your solar panels decrease your energy bill by an average of $100 per month, it means you are saving $1,200 per year.
$11,200 investment / $1,200 savings per year = A payback period of 9 years, 4 months
Payback periods can change depending on how electricity rates change. If rates increase faster than expected, payback periods can be shorter than predicted.
Credit: US EIA
Are solar panels worth it?
Solar panels are worth it for many homeowners, especially if you live in an area with high electricity rates.
However, there are a few situations where investing in solar panel installation might not make sense. For example, if your home is heavily shaded or you already have low energy bills, then the costs might not justify the potential savings. Also, solar panels may not make sense if you plan to move to another home within the next few years.
Solar panels come with benefits beyond electric bill savings.
- Increased property value: Owned solar panels on your home can increase its value.
- Greater energy independence: Solar panels reduce your dependence on the grid. With a backup battery, solar panels can power emergency devices during a power outage.
- Low maintenance: Solar panels can be low maintenance systems. When you lease solar panels, many maintenance tasks are included in your monthly payments
Ready to learn more about the benefits of solar panels for your home? Learn more about Palmetto's offers, or get a free savings estimate tailored to your home.
See how much you can save by going solar with Palmetto
Frequently asked questions
Are solar panels worth it?
Yes, solar panels are worth it for many homeowners and can reduce their electricity bills, by thousands of dollars in some cases.
Are solar panels for homes getting less expensive?
The cost of solar panels has decreased significantly since they became commercially available, though, like many things, prices have fluctuated in recent years.
Are solar panels worth it in my state?
The savings potential from solar panels varies by state. States with higher electricity costs generally return better savings. Even within states, individual households will have different savings potential. Low energy use and high levels of shade can make solar not worth it, regardless of your state.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
