How long do solar panels take to pay for themselves?

Solar panels typically pay for themselves in 6 to 10 years in the US, and 10 to 20 years where electricity is cheap. Counter-intuitively, your electricity rate matters more than how sunny it is — expensive power means bigger savings per panel.

Rate beats sunshine

This surprises people. Compare two cities:

City	Sun hrs/yr	Rate	Payback
Phoenix	1,932	15.2¢	8.2 yrs
Boston	1,446	30.1¢	5.4 yrs
Las Vegas	1,992	15.3¢	7.7 yrs
San Diego	1,894	31.2¢	8.3 yrs
Houston	1,653	15.1¢	9.7 yrs
Seattle	1,262	11.3¢	16.9 yrs

Boston gets far less sun than Phoenix, yet pays back competitively, because Massachusetts electricity costs roughly double Arizona's. Every kWh your panels make is a kWh you don't buy at that higher rate.

How to calculate yours

Payback (years) = net system cost ÷ annual savings.

Net cost = gross price − tax credits − rebates
Annual savings = kWh produced (capped at kWh you use) × your rate

Watch the cap. If your system produces more than you consume, the excess is exported — often at a fraction of retail. Savings stop scaling with system size at that point, which is why oversized systems have terrible payback.

What shortens payback

Rising electricity rates — most utilities raise prices 2–4% a year, which quietly improves your return
State and utility rebates on top of the federal credit
Getting three quotes — the spread on identical systems is routinely 30–40%
Sizing correctly rather than maximally

Payback in every city we measured

See break-even periods for 209 US and Canadian cities, sorted fastest first →

What this looks like in real cities

Measured rooftop data, spanning the range from fastest to slowest payback we have found:

City	Sun hrs/yr	Rate	Payback
Boston, MA	1,446	30.1¢	5.4 yrs
Laredo, TX	1,838	15.1¢	8.7 yrs
Columbia, SC	1,624	14.2¢	10.3 yrs
St. Louis, MO	1,522	12.2¢	12.7 yrs
Montreal, QC	1,384	7.9¢	30.7 yrs

See all 209 cities →

Frequently asked

Do solar panels ever not pay for themselves?

Yes. In regions with cheap electricity, heavy shading, or a north-facing roof, payback can exceed the panels’ 25-year warranty period. Always model your own roof before buying.

How long do solar panels last?

Most carry a 25-year performance warranty and degrade about 0.5% a year, so they still produce roughly 85% of original output at year 25. Inverters typically need replacing once, around year 12-15.

Does solar increase home value?

Owned systems generally do. Leased systems can complicate a sale because the buyer must assume the contract.

Check your own roof free →

General information, updated 2026-08-22. Not financial, tax or engineering advice.