How these solar estimates are calculated
Production
For every place, we run NREL's PVWatts® model (version 8, now maintained by the National Laboratory of the Rockies) for a 1 kW-DC system at the place's coordinates: standard modules, fixed roof mount, 20° tilt facing due south, 14% system losses, typical-meteorological-year weather from the National Solar Radiation Database. That gives kWh per kW per year and per month, which we scale to the system size.
System size
We size the system to cover 100% of the average home's annual electricity use in that state (EIA, 2024), rounded up to whole 400 W panels, between 3 and 15 kW.
Cost
Installed cost is the 2025 median price for homeowner-owned residential systems from Berkeley Lab's U.S. Distributed Solar and Storage Data, before incentives. State medians are used where Berkeley Lab reports one (WA $3.00, AZ $3.10, FL $3.10, CT $3.30, CA $3.30, MA $3.40, OR $3.40, RI $3.50, NH $3.70, NJ $3.70, WI $3.90, NY $3.90, MD $4.00, TX $4.00, NC $4.10, NM $4.10); elsewhere we use the US median of $3.60/W. Cash purchases ran cheaper (US median $3.00/W) and loan-financed systems higher ($4.50/W).
No federal tax credit is applied: the Section 25D Residential Clean Energy Credit ended for systems placed in service after December 31, 2025.
Savings and payback
Each solar kWh is valued at the state's average residential electricity price (EIA Electric Power Monthly, Table 5.6.B (residential, year-to-date through July 2026)) where the state offers net metering. Where utilities credit exported power below retail (net billing), we assume 40% of a no-battery system's output is used at home as it's produced and valued at retail, and the rest earns the export credit below; a flat solar fee, where one applies, is subtracted each year. Savings rise 2.5% a year with electricity prices, panel output falls 0.5% a year, and we count 25 years. Payback is the year cumulative savings first cover the upfront cost.
States that pay less than retail for exported power
As of October 2026. Rates vary by utility within a state; these are for the largest utilities or a typical value.
| State | Program | Export credit | Source |
|---|---|---|---|
| Alabama | Avoided-cost purchase plus capacity reservation charge | 3.0¢ + $5.41/kW/mo fee | link |
| Arizona | Resource Comparison Proxy export rate | 5.5¢ | link |
| Arkansas | Net billing (Act 278) | 5.0¢ | link |
| California | Net Billing Tariff ("NEM 3.0") | 7.0¢ | link |
| Georgia | Georgia Power solar buyback | 7.2¢ | link |
| Hawaii | Smart Export | 2.0¢ | link |
| Idaho | Idaho Power export credit rate | 5.0¢ | link |
| Illinois | Supply-only net metering | 8.3¢ | link |
| Indiana | Excess distributed generation (EDG) | 4.0¢ | link |
| Kentucky | Net metering service (NMS-2) | 7.3¢ | link |
| Louisiana | Avoided-cost net billing | 2.7¢ | link |
| Michigan | Distributed generation inflow/outflow | 50% of retail | link |
| Mississippi | Net renewable generation | 6.1¢ | link |
| North Dakota | Avoided-cost net metering | 3.0¢ | link |
| South Dakota | Avoided-cost purchase | 3.0¢ | link |
| Tennessee | TVA Dispersed Power Production | 2.6¢ | link |
| Texas | Retail provider solar buyback plans | 6.0¢ | link |
| Utah | Rocky Mountain Power export credit (Schedule 137) | 4.5¢ | link |
All other states offer net metering at or near retail; some (Nevada, Virginia, Oklahoma) pay less only for surplus left over after a month or year of netting, which matters little for a system sized to your use.
Limits
- Export credits change often and differ by utility; time-of-use rates and fixed charges can shift payback either way.
- Your roof's direction, pitch and shade can raise or lower output by 20% or more.
- Financing costs, maintenance, inverter replacement and batteries are not included.
- State averages hide differences between utilities within a state.