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
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 788 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 |
|---|---|---|---|
| Kahului, HI | 1,627 | 42.1¢ | 3.5 yrs |
| Fresno, CA | 1,827 | 31.2¢ | 8.8 yrs |
| Virginia Beach, VA | 1,513 | 14.2¢ | 10.9 yrs |
| Cardiff, Wales | 1,009 | 26.1¢ | 12.9 yrs |
| Trois-Rivières, QC | 1,347 | 7.9¢ | 31.9 yrs |
Frequently asked
Do solar panels ever not pay for themselves?
Yes. Where electricity is cheap, sunlight is poor and exports earn little, payback can stretch past the panels' useful life. That combination is uncommon but real. Check your own electricity rate first — it moves payback more than sunshine does, which is why cheap-power regions so often disappoint.
How long do solar panels last?
Panels typically carry a 25-year performance warranty and keep working well beyond it, losing roughly 0.5% of output a year. The inverter is the part most likely to need replacing first, usually somewhere between years ten and fifteen. Budget for one inverter replacement across the system's life.
Does solar increase home value?
Owned systems generally do; leased ones often do not, because the buyer inherits a contract rather than an asset. The size of the uplift varies widely by market and is hard to predict, so treat resale value as a bonus rather than part of your payback calculation.
Related guides
General information, updated 2026-08-22. Not financial, tax or engineering advice.