Which states are worth going solar in 2026? Our ranking and verdicts, post tax credit.

Bruno de Madrazo

Updated July 26, 2026·How we calculate this

With the 30 % federal credit gone, our recommendation is blunt: if your retail rate is above $0.18/kWh and your state keeps full-retail net metering, go solar — payback lands under ~12 years. Where power is cheap, or your utility credits exported power at a fraction of retail (net-billing or no statewide mandate), the math slows down fast — sometimes past 20 years. This ranking tells you which side of that line your state falls on: the 10 states we'd greenlight today, the 5 we'd walk away from, and the verdict logic in between — from 5.6 years (Hawaii) down to 29.0 years (Idaho).

The model in one paragraph

For every state we run an 8 kW grid-tied system at $2.58 / W installed (EnergySage 2026 national median) — the same input our data study uses. We assume no federal credit (Section 25D expired December 31, 2025). Annual production is the NREL PVWatts state average. Annual savings = production × retail rate × a net-metering value factor that reflects how your utility credits exported power: full-retail net metering = 1.00, net-billing / avoided-cost ≈ 0.58, no statewide mandate ≈ 0.46. Payback is net system cost ÷ annual savings — simple payback, with no rate inflation or discounting, and system size cancels (both cost and output scale with kW).

net_cost       = 8 × 1000 × 2.58          # no federal credit, no rebate in baseline
annual_savings = (8 × prod) × rate × value_factor   # vf: 1.00 full / 0.58 net-billing / 0.46 none
payback        = net_cost ÷ annual_savings

2026 ranking — all 50 states

Rate source: EIA residential electricity prices (2026). Production source: NREL PVWatts v8, default tilt/orientation. Payback applies a net-metering value factor (full retail 1.00, net-billing 0.58, no statewide mandate 0.46) — which is why rate alone doesn't set the order: high-rate states without full-retail net metering (e.g. Michigan, Indiana, Alaska) still pay back slowly. State rebates (DSIRE, listed below) are not applied in the baseline — they shorten payback further where you qualify. These are the same inputs and value factor as the Post-Credit Solar Payback Index data study, so the two tables agree.

State rebates still standing in 2026

These are the programs that survived the federal cut. They are not baked into the baseline ranking above — that keeps every state comparable on the same footing — but if you live in one of these states, they shrink your payback further by 1-3 years.

• Massachusetts SMART: performance-based incentive paid over 10 years; effective ~$0.06/kWh credit on top of net metering. It stacks on the full-retail net metering that already puts MA at #3 — pushing real payback below 6 years for many households.
• New York NY-Sun: $200-400/kW block-grant declining incentive. Up to $1,600 on an 8 kW system depending on region.
• Maine Efficiency Maine PV: $0.50/W for low-income households (Q1 2026 reset).
• California SGIP (battery only): $1,000/kWh for medical-baseline and high-fire-risk customers — affects payback only if a battery is included.
• Illinois Solar for All: covers up to 100 % of system cost for qualifying low-income; not in the ranking baseline.
• Connecticut Solar Investment Program: $0.46/W performance incentive over 5 years.
• New Jersey TREC / SREC-II: tradeable certificate market; effective ~$0.085/kWh in 2026.
• Oregon Solar + Storage Rebate: $300/kW + $300/kWh battery, cumulative cap.

To check your own state and utility, the canonical source is DSIRE. The numbers change monthly — what's on the ranking is the May 12, 2026 snapshot.

The three numbers that decide everything

If you only remember three things from this article:

1. Your retail electricity rate ($/kWh). The primary lever. Doubling your rate cuts payback nearly in half.
2. Your state's net-metering rule. Full-retail net metering credits every exported kWh at your full rate (value factor 1.00); net-billing drops that to ~0.58 and states with no mandate to ~0.46 — that alone can double payback, which is why high-rate Michigan and Indiana rank so low. Annual production per kW (NREL PVWatts, ±25 % by roof) matters, but far less than these two.
3. Your installed cost ($/W). The 2026 national median is $2.58/W. Below $2.40 is excellent (DIY-territory); above $3.20 you're paying a national-brand premium.

Why the bottom 5 are bad: no net metering (and cheap power)

Idaho (29.0 yr), South Dakota (27.2), Tennessee (26.7), Alaska (22.2) and Mississippi (21.8) share one feature above all: no statewide net-metering mandate. Exported power is credited at roughly avoided-cost — our 0.46× value factor — so a big chunk of what your panels make on a sunny afternoon is worth less than half its retail value. In Idaho, South Dakota and Tennessee that stacks on cheap-ish retail rates ($0.13-0.15/kWh); Alaska is the telling exception — a high $0.27/kWh rate can't rescue it because there's no net metering and its winter sun (926 kWh/kW) is the weakest in the country.

What does work in these states: community solar subscription (no upfront cost, ~10 % savings on the utility bill) or pairing solar with a heat pump to offset oil/propane heating where the BTU economics matter more than the kWh.

Why the top 5 win: rates and net metering over insolation

Hawaii's payback (5.6 years) isn't driven by sun — its 1,699 kWh/kW is respectable but not exceptional. It's driven by $0.4662/kWh retail electricity, the highest in the country, which makes every panel-generated kWh worth 3× what it is in the Midwest — enough to win even though Hawaii runs net-billing, not full-retail net metering (its 0.58 value factor). The next four — Connecticut (6.0), Massachusetts (6.4), Rhode Island (6.6) and New York (6.7) — pair high Northeast rates with full-retail net metering (value factor 1.00), so exported power is worth every cent of retail. Massachusetts also stacks the SMART incentive on top. In all five, modest New England sunshine is beside the point.

Should you go solar in your state?

Forget the 50-row table for a second. With the federal credit gone, the decision collapses to two things — your retail rate and how your state credits exported power — plus whether a state program still tops it up.

Frequently asked questions

Sources: EIA Form EIA-861 (Feb 2026 release), NREL PVWatts v8, DSIRE state-incentive database (May 12, 2026), EnergySage Solar Marketplace pricing (Q1 2026), LBNL Tracking the Sun 2025 edition. Last reviewed July 26, 2026.