Where Solar Panels Pay Off the Most: A State-by-State Breakdown
Solar panels have become an increasingly attractive option for homeowners hoping to reduce energy bills and minimize their environmental footprint. But going solar isn’t just a feel-good decision — for many, it’s a smart financial one. With electricity prices rising and solar technology becoming more accessible, the potential for long-term savings has never been greater.
But here’s the catch: where you live makes all the difference.
From the amount of sunlight your roof receives to local electricity rates and state-level incentives, solar panel returns can vary wildly across the U.S. To help homeowners understand which states offer the best financial return on solar investments, Oregon Generators — a company specializing in generator installations, EV charging setups, and electrical upgrades — analyzed and ranked all 50 states.
“Location is absolutely everything when it comes to solar returns,” says Corey Gilgan, owner of Oregon Generators. “Two identical homes with the same solar setup can experience drastically different payback periods just based on their state.”
How They Measured Solar Profitability
To develop a Solar Earnings Score for each state (rated from 0 to 100), Oregon Generators looked at four essential factors:
- Solar Installation Costs (after 30% federal tax credit)
- Average Electricity Rates (cents per kilowatt-hour)
- Annual Sunlight Hours
- Projected 25-Year Savings
Each factor was weighted and normalized to identify the states where homeowners are most likely to benefit financially from switching to solar.
🔟 Top 10 States Where Solar Pays Off the Most
| Rank | State | Avg. Install Cost | Electricity Rate (¢/kWh) | Sunlight Hours | 25-Year Savings | Solar Score |
|---|---|---|---|---|---|---|
| 1 | Nevada | $18,976 | 14.88 | 3,646 | $82,838 | 70 |
| 2 | California | $14,206 | 30.55 | 3,055 | $119,087 | 65 |
| 3 | Arizona | $18,926 | 15.20 | 3,806 | $32,649 | 62 |
| 4 | Massachusetts | $22,786 | 31.22 | 2,634 | $178,505 | 57 |
| 5 | New Mexico | $18,667 | 14.26 | 3,415 | $31,838 | 57 |
| 6 | Texas | $20,492 | 15.32 | 2,850 | $85,512 | 56 |
| 7 | Florida | $21,594 | 14.20 | 2,927 | $66,310 | 53 |
| 8 | Rhode Island | $23,083 | 25.31 | 2,606 | $134,734 | 52 |
| 9 | Connecticut | $21,686 | 28.16 | 2,585 | $130,030 | 51 |
| 10 | Hawaii | $20,316 | 42.34 | 3,036 | $134,447 | 51 |
🥇 Why These States Shine
1. Nevada
With over 3,600 annual sunlight hours and relatively low installation costs, Nevada offers the fastest path to solar profitability. Homeowners here can expect to break even within 6–8 years, with more than $82,000 in projected savings over 25 years.
“Nevada’s dry, sunny climate and moderate electricity rates create a sweet spot for solar,” Gilgan says.
2. California
Despite the highest electricity rates in the nation, California’s solar potential remains strong. The combination of lower upfront costs and premium savings — nearly $119,000 over 25 years — gives it a high financial payoff, especially for those in sun-drenched areas like Southern California.
3. Arizona
With more sunshine than any other state in the top 10, Arizona ranks high due to its excellent solar potential and manageable electricity prices. Lower grid power rates, however, slightly diminish long-term savings compared to California or Massachusetts.
4. Massachusetts
A surprising entry in the top 5, Massachusetts proves that you don’t need endless sunshine to make solar worthwhile. High electricity rates and generous state incentives more than compensate for fewer sunny days.
5. New Mexico
New Mexico strikes a good balance — plenty of sun, affordable installation, and moderate electricity rates. While savings aren’t sky-high, the relatively low barrier to entry makes solar appealing for homeowners seeking energy independence.
💬 What the Experts Say
“When homeowners ask me about going solar, the first thing I emphasize is geography,” says Gilgan.
“People are often shocked that a sunny state doesn’t always guarantee big savings — it’s about how much grid electricity costs and how long it takes to pay off the system.”
Gilgan also points out that local industry maturity plays a role. “States with established solar markets tend to offer better prices on installation, which makes a big impact on your bottom line.”
📍The Bottom Line
Going solar can absolutely be a financially sound move — but it’s not one-size-fits-all. Before making the leap, run the numbers based on your location, energy usage, and local costs. What works in Nevada may not make sense in Vermont.
About Oregon Generators
Oregon Generators provides expert installation and maintenance of home generators, EV chargers, and upgraded electrical panels. Serving the greater Portland area, they work with top brands like Generac and Kohler to ensure dependable power when you need it most. Their team is licensed, certified, and known for delivering quality work and exceptional service.
Methodology
This analysis used national and state-specific data sources including:
- Federal solar tax credit info
- U.S. Energy Information Administration (EIA) data
- National Renewable Energy Laboratory (NREL) maps
- 25-year savings based on conservative utility rate inflation and solar output projections
