A homeowner in Orlando told me last month she was about to sign a contract for a 10-kilowatt system, then her installer mentioned, almost as an aside, that the federal tax credit was gone. She had no idea. She’d been budgeting around a $9,000 credit that no longer exists, and her payback calculation was completely wrong. That scenario is playing out across the country right now, and it’s why the ROI framework most people are using is already obsolete.

Here’s the state of play: BloombergNEF’s June 2026 report projects U.S. residential solar additions will hit just 4.1 GW this year, down 15% from 2025 and the lowest level in five years. More sobering, BloombergNEF says the market “is not expected to recover to the record levels of 2023 anytime in the next decade.” This isn’t a blip. The expiration of the Section 25D residential tax credit has fundamentally reset the economics, and the homeowners who understand that earliest will make the best decisions.

The Tax Credit Is Gone. Your Spreadsheet Needs to Change.

ScenarioSystem CostFederal Tax CreditNet CostPayback PeriodKey Variable
With 30% Tax Credit (2023-2025)$28,000$8,400$19,6006-8 yearsStrong nationwide
Without Tax Credit (2026+)$28,000$0$28,0008-10 yearsLocal net metering rates
High-rate state (FL/CA, 14-16¢/kWh)$28,000$0$28,0008-10 yearsUtility export credits
Low-rate state (9¢/kWh, poor NEM)$28,000$0$28,00012-14 yearsDeteriorating net metering

The 30% federal investment tax credit did a lot of heavy lifting for solar ROI. On a typical $28,000 system, it knocked off $8,400 right away, compressing payback periods to the 6-to-8-year range that made solar a genuinely easy sell. Without it, that same system faces an 8-to-10-year payback period, according to current GreenWorld Energy analysis. That two-year difference sounds manageable until you factor in that most people move, refinance, or face a major home expense within a decade.

What this means practically: the variables that were always important, local net metering rates, your utility’s rate trajectory, your specific electricity consumption, have become the dominant ROI drivers. The tax credit was forgiving. It smoothed over a mediocre net metering policy or a house with too much shade. Now there’s no cushion. You need to run the actual numbers for your ZIP code, not the national average.

Why Florida and California Are Defying the National Trend

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The national headline obscures something important. Florida is projected to add 710 MW of residential solar in 2026, a 62% year-over-year jump, driven by pro-solar legislation passed in 2025. California is up 17%. These aren’t accidents. Both states have strong net metering frameworks, high utility rates, and in Florida’s case, a political environment that has recently made solar more accessible rather than less. When your utility charges 14 to 16 cents per kilowatt-hour and offers reasonable export credits, an 8-to-10-year payback is still competitive compared to alternatives. When your utility charges 9 cents and has gutted net metering, you might be looking at 12 to 14 years. Same system, radically different outcome.

I’ve seen homeowners in states with deteriorating net metering policies get genuinely surprised when I show them the updated numbers. If you’re in a state where the utility has recently changed its export rate structure, or where there’s an active regulatory docket on net metering, that uncertainty alone should factor into your decision. The federal credit was predictable. Net metering policy is not.

Sizing for Payback, Not Maximum Production

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Here’s what most people don’t realize: bigger isn’t always better anymore. When the 30% credit applied to every dollar of system cost, there was a financial argument for oversizing, since the government was effectively subsidizing 30 cents of every extra watt you installed. That logic is dead. Now, every additional kilowatt you install costs you full price, and if your utility doesn’t compensate you fairly for excess generation, that extra capacity just extends your payback period.

The right system size today is one that offsets roughly 90 to 100% of your annual consumption, with close attention to what your utility actually pays for grid exports. If your utility has a tiered rate structure, prioritize offsetting your highest-cost kilowatt-hours first. A smaller, well-targeted system will often beat a larger one on pure ROI. Your installer has an incentive to sell you more panels. Your electricity bill doesn’t lie.

The Battery Question Is More Complicated Than Your Installer Admits

The other big shift in 2026 is the storage conversation. As of Q1 2026, 40% of new residential solar systems are being installed with a battery, up from 35% in 2025, according to BloombergNEF. That’s a meaningful jump, and it reflects something real: homeowners are increasingly prioritizing resilience, the ability to run their home during a grid outage, over maximizing grid export credits. In Florida, where hurricane season is a genuine planning consideration, that calculus makes a lot of sense.

But here’s the tension. Overall home battery installations are actually down 26% in 2026. The attach rate is rising because total system installations are falling, not because batteries have suddenly become cheap. A quality battery system, think a 13.5 kWh Tesla Powerwall 3 or comparable unit, adds $10,000 to $15,000 to your project cost. Without a tax credit, that cost sits entirely on you. Batteries improve resilience, and in certain utility markets with time-of-use rates they can improve ROI. But if your primary goal is financial payback, adding storage strictly for the economics is a harder case to make in 2026 than it was two years ago. Be honest with yourself about whether you’re buying resilience or ROI. Both are valid. They’re just different purchases.

How to Actually Evaluate a Quote Right Now

The honest version of solar due diligence in mid-2026 looks like this. First, get your actual utility rate and understand your state’s current net metering policy before you talk to any installer. EnergySage’s marketplace is still a useful comparison tool for quotes. Second, model the payback at 8 years and at 12 years and decide whether both scenarios work for you. Third, if you’re in a high-resilience-need area like coastal Florida or wildfire-prone California, price out a battery separately and decide whether that value justifies the cost on its own terms, not bundled into a vague “system value” pitch.

The installers who are still leading with “but think about the long-term savings” without addressing the changed payback math are doing you a disservice. Good ones will walk you through utility rate escalation assumptions, realistic production estimates from tools like NREL’s PVWatts, and what happens to your ROI if your utility changes export policy mid-contract. Ask those questions out loud. If the salesperson can’t answer them, find someone who can.

The national slowdown is real. BloombergNEF isn’t wrong, and Canary Media’s recent coverage reinforces that rooftop solar faces a genuine multi-year headwind. But solar still pencils out in the right situations. A well-sized system in a high-rate utility territory with stable net metering can still pay back within a decade and generate 25 years of production. The job now is just to find out whether you’re actually in one of those situations, before you sign anything.

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