Are solar panels worth it? In 2025, they usually are

Your neighbor just got solar panels and won't stop bragging about their $12 electric bill. Meanwhile, you're still paying $150+ every month and wondering if solar panels are actually worth it—or if they're just another expensive home improvement that sounds better than it delivers.

Here's the truth: For most homeowners, solar panels are absolutely worth it. The average solar shopper saves between $34,000 and $120,000 over 25 years, turning what feels like a big upfront cost into serious long-term savings. 

If you've been on the fence about going solar, now's the time to get serious about it. With electricity rates climbing about 2.8% yearly and the biggest solar incentive disappearing after this year, the financial case for solar panels has never been clearer—or more urgent.

Solar doesn't pay off for everyone, though. Let's explore when it makes sense to go solar, when it doesn't, and the factors that determine your solar savings, including how the upcoming tax credit expiration affects your decision.

Solar panels make financial sense for most homeowners, but certain conditions maximize your return on investment. Here's when solar is typically worth it:

While solar works for most homeowners, certain situations make it less attractive or financially unviable. Here's when solar panels typically aren't worth the investment:

Solar is a long-term investment that requires some patience before you see a return. Before you commit, it's important to understand your estimated savings. The average homeowner will save between $34,000 and $120,000 over 25 years, but it varies based on the following factors:

1. Your solar installation cost

As of 2025, solar costs have hit all-time lows. As solar deployment continues to grow, the cost of installing solar panels will likely decrease further.

Some of the most significant factors that will impact your solar cost and savings include system size, equipment quality, roof characteristics, labor costs, and location. The amount of electricity you use determines how much energy your system needs to produce—generally speaking, a bigger system with more panels will have a higher average cost than a system with fewer panels. 

While cheaper solar panels may seem like the easiest way to save money on a solar panel system, investing in high-quality equipment usually means greater long-term savings. Installer prices vary substantially, even if they're installing the same equipment—you'll probably pay more for an installer with a strong labor warranty and high skill level, but it could be worth it. Solar prices also differ from state to state, with generally lower prices per watt in warm states and higher prices in cold states, though this isn't always true.

2. How much you pay for electricity now

Like we explained earlier, it's important to know how much electricity you use and how much you pay for it. When you go solar, you reduce or eliminate your monthly electricity bill, so your current electricity costs impact how much you can save.

3. The rebates and incentives available to you

Solar rebates and incentives—including the federal solar tax credit, net metering, and state and local incentives like SRECs—significantly reduce your total solar cost. They can even put money back into your pocket each month.

But not everyone will be eligible for all solar rebates and incentives, so always confirm eligibility requirements before proceeding with an installation.

Check out theDatabase of State Incentives for Renewables and Efficiency (DSIRE) to see which incentives are available near you.

4. If you're planning on selling your home soon

It takes about seven years to break even on your solar costs. If you think you might move before you reach your payback period, purchasing a solar panel system may not be worth it. Instead, consider community solar, which doesn't lock you into a long-term investment.

However, adding a solar panel system can still benefit you financially if you move. According to new research from SolarInsure, which looked at thousands of California homes, solar panels can increase your home's value by about 5-10%. Just be wary of leasing solar panels if you think you might move. Leases are typically long-term and can be difficult to cancel, making it more challenging to sell your home.

5. How you pay for your solar power system

Think of solar financing like buying a car: You can pay cash, finance it, or lease it—each choice changes what you'll pay over time.

The average EnergySage shopper breaks even on solar in seven years. However, this payback period will be longer for systems installed after December 31, 2025, when the 30% federal tax credit expires.

You can calculate your specific payback period with this formula: 

Payback period = (Gross solar energy system cost - upfront incentives) ÷ (Annual savings + additional state and/or utility incentives).

For example, if your system costs $30,000 and you receive the 30% federal tax credit ($9,000), your net cost is $21,000. If you save $3,000 annually on electricity, your payback period is seven years ($21,000 ÷ $3,000 = 7 years).

Without the federal tax credit, that same solar energy system would have a payback period of 10 years ($30,000 ÷ $3,000 = 10 years), significantly impacting your return on investment.

But tax credit or not, solar panels are worth it for the vast majority of homeowners. If you own your home, pay decent electricity rates, and have a suitable roof, the investment will still likely pay off handsomely over time.

The key is doing your homework: Get multiple quotes, understand your financing options, and don't rush into any decisions. Solar is a long-term investment that can transform your relationship with energy costs—but only if you approach it thoughtfully.