Going Solar in 2026: The Complete Homeowner's Decision Guide

Solar energy has never been more affordable. Panel prices have dropped 70% over the past decade, the federal tax credit covers 30% of installation costs, and most homeowners who go solar save $20,000-$40,000 over 25 years. But solar isn't right for every home, and the industry's aggressive sales tactics make it hard to get straight answers. This guide cuts through the noise.

Step 1: Determine If Your Home Is a Good Candidate

Roof condition: If your roof needs replacement within 5-10 years, do it before installing solar. Removing and reinstalling panels for a roof replacement costs $2,000-$5,000. Ideal candidates have roofs with 15+ years of remaining life. Asphalt shingle, metal, and tile roofs all work well for solar. Flat roofs work too with tilted mounting systems.

Roof orientation and shading: South-facing roofs produce the most energy. West-facing roofs produce about 80-85% as much. East-facing roofs produce about 75-80%. North-facing roofs are generally not suitable. Shading from trees, buildings, or other obstructions significantly reduces production. If more than 20-30% of your roof is shaded during peak sun hours (10am-2pm), production will be notably reduced. Modern microinverters (like Enphase IQ8) minimize shading losses compared to older string inverter technology.

Electricity usage and rates: Solar makes the most financial sense when your electricity rate is high ($0.15+/kWh) and your usage is significant (800+ kWh/month). The higher your electric bill, the faster solar pays for itself. Check your electric bill for your average monthly kWh usage and your per-kWh rate. If you're paying $150+/month, solar is almost certainly a good investment.

Net metering policy: Net metering allows you to sell excess solar energy back to the grid at retail rates, effectively spinning your meter backward. States with strong net metering (California, New York, Massachusetts, New Jersey) make solar more valuable. Some utilities have reduced net metering credits - check your utility's current policy, as this significantly affects solar ROI.

Step 2: Understand the True Cost

The average residential solar installation costs $2.50-$3.50 per watt before incentives. A typical 8 kW system costs $20,000-$28,000 before the tax credit. After the 30% federal tax credit, that drops to $14,000-$19,600. State and local incentives can reduce this further. The effective cost after all incentives typically ranges from $12,000-$18,000 for a system that eliminates 80-100% of your electric bill for 25+ years.

Step 3: Compare Financing Options

Cash purchase: Highest total savings (you keep all tax credits and energy savings), fastest payback period (6-10 years typically), and full ownership from day one. Best for homeowners with available capital. Solar loan: $0 down with monthly payments that are often less than your current electric bill. You still own the system and claim the tax credit. Payback period is slightly longer (8-12 years) due to interest. Best for most homeowners. Lease/PPA: $0 down with monthly lease payments or per-kWh charges. Simplest option but lowest savings (the leasing company keeps the tax credit and much of the financial benefit). Best for homeowners who prioritize convenience over maximum savings.

Step 4: Get Multiple Quotes

Solar pricing varies by 25-40% between installers for the same system size and equipment. Always get at least 3 quotes. Each quote should include specific panel and inverter models, total system size in kW, estimated annual production in kWh, total installed cost before and after incentives, warranty terms, and projected savings over 25 years (based on your actual utility rate). Compare quotes on cost per watt (total price divided by system size) for an apples-to-apples comparison.

Step 5: Evaluate the Savings Projection Carefully