The 2026 federal-credit change matters
The old rule of simply taking 30% off a residential solar quote is no longer valid for a new 2026 installation. The IRS says the Section 25D Residential Clean Energy Credit applied to qualified property through December 31, 2025 and is not available for expenditures made after that date.
That makes local economics more important: your utility rate, state and utility incentives, export compensation, roof production and installed price now carry even more weight in the decision.
Five numbers that decide the economics
A useful solar decision can be reduced to a small set of inputs, but they must be local and transparent.
- Annual household electricity use in kWh, preferably from 12 months of bills.
- Real all-in electricity price and tariff structure, not only a state average.
- Expected annual solar production for the actual location and roof.
- Installed solar price before optional battery and financing costs.
- Value of exported solar under the utility's current net-metering or net-billing rules.
When solar tends to look stronger
Solar generally becomes easier to justify when a home combines strong solar production with expensive grid electricity and a competitive installed price.
- The roof has useful unshaded area and a reasonable remaining service life.
- The household uses substantial electricity or expects future loads such as an EV or heat pump.
- Local incentives or utility programs reduce project cost or reward flexible energy use.
- The homeowner expects to remain in the home long enough to capture the economic benefit.
When to be more cautious
A technically productive roof can still be a poor financial project if the contract is expensive or the utility rules are unfavorable.
- High financing dealer fees or aggressive loan terms inflate the true system price.
- Low export compensation makes oversized systems less valuable unless daytime self-consumption or storage is high.
- Major roof, service-panel or structural work is required.
- The sales proposal assumes incentives for which the homeowner has not confirmed eligibility.
Use a personalized calculation
Home Solar Atlas uses ZIP-specific PVWatts production where available, current state electricity data and editable assumptions so you can see which variable changes the result. Treat the output as a planning model and compare it with actual utility rules and installer quotes before signing a contract.