47 states get enough sun to make solar at least somewhat viable. But “viable” isn’t the same as “worth it,” and that gap is where a lot of homeowners get burned.

I’ve sat across from people in some genuinely rough solar markets who came in excited, fed numbers by an installer who glossed over the hard parts. My job, as I see it, is to be the person who tells you what the installer might not. So let’s talk about where solar genuinely struggles, and why.

Why Location Matters More Than People Expect

Most people think solar is about sunlight. And yes, sun hours matter. But after sitting through hundreds of consultations, I can tell you the bigger killers are electricity rates, net metering policy, upfront cost after incentives, and how fast you’ll realistically break even. A state can have fantastic sunshine and still be a terrible place to go solar.

The formula that actually matters: (annual energy production x your electricity rate) minus your annual loan or lease payment. That number tells you whether you’re ahead or behind each year. In states where electricity is cheap, that first multiplier shrinks. In states where net metering pays you pennies on the dollar, the math gets worse. Stack both problems together and you can end up with a 20-year payback on a system with a 25-year warranty. That’s not a deal. That’s a gamble.

The States That Come Up on My Problem List

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Louisiana. I keep coming back to Louisiana. Residential electricity there runs around $0.09 to $0.10 per kWh, which sounds like a good thing until you realize you’re offsetting cheap power with a $20,000-plus system. Entergy Louisiana’s net metering policy has also faced significant criticism for paying below-retail rates for excess generation. The payback period in many Louisiana markets stretches past 18 years. For a lot of homeowners, that just doesn’t pencil.

Idaho and Wyoming. Both states have some of the lowest residential electricity rates in the country, regularly under $0.10/kWh. NREL data shows average peak sun hours in Boise around 5.5 per day, which is actually decent. But cheap power wipes out your savings. A homeowner running $80 a month in electricity bills is not going to break even on a $22,000 system in any reasonable timeline.

North Dakota and South Dakota. Low sun hours (NREL puts Bismarck around 4.8 peak hours per day), low electricity rates, cold winters that don’t help production, and no particularly generous state incentives. Both states also have thin installer markets, which means fewer competitive bids and potentially higher prices. I’ve seen quotes out of Fargo that were $1.50 to $2.00 per watt higher than what homeowners in Minneapolis were getting.

Michigan. This one surprises people. Michigan gets roughly the same annual sun hours as Germany, and Germany has one of the highest solar adoption rates in the world. The difference is Germany has very high electricity prices. Michigan’s electricity rates are middle-of-the-road, around $0.17/kWh as of this year, but the state also has some of the worst net metering policy in the Midwest, with utilities like Consumers Energy and DTE Energy running “distributed generation” programs that pay customers far below retail rates for power sent to the grid. The result is that you really need to size your system to cover exactly what you use, with no excess, which is hard to calibrate and easy to get wrong.

Indiana. Indiana gets an honorable mention. The state repealed its one-to-one net metering for most customers in 2022, replacing it with a lower avoided-cost rate. For a system that exports a lot of power, that change alone can add four to six years to payback timelines.

Estimated solar payback period by state (years)
Louisiana19 years
Idaho18 years
Michigan14 years
Indiana16 years
North Dakota20 years
Arizona8 years
Source: EnergySage, NREL, state utility data, 2026 estimates

The Net Metering Trap

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Here’s something I got wrong early in my career: I used to evaluate states mostly by sun hours. I spent years recommending against the Pacific Northwest based on cloud cover, while quietly being fine with states that had sunny skies but predatory net metering policies. That was backwards.

Net metering is the policy that lets you sell excess solar power back to the grid at or near retail rates. When it’s generous, it’s the financial backbone of rooftop solar economics. When it’s gutted, your system only “pays” you for the hours you’re home and consuming the power you’re generating. The National Renewable Energy Laboratory (NREL) has modeled this extensively: moving from full retail net metering to an avoided-cost rate can reduce the value of a solar system by 30 to 50 percent over its lifetime.

Nevada gutted net metering in 2015 and solar adoption collapsed almost immediately. They’ve since reversed course, which is good. But states like Indiana, Idaho, and several southeastern states are still running unfavorable frameworks, and installers don’t always volunteer that information upfront. Ask specifically: “What will my utility pay me per kWh for excess generation?” If the answer is significantly below your retail rate, the math changes.

What the Numbers Actually Look Like

These worked examples are estimates based on industry averages and published state data, not guarantees:

Louisiana homeowner, $180/month electric bill → Installs 8kW system at $2.90/watt after 30% federal tax credit ($16,240 net cost), offsetting $0.09/kWh power with a net metering rate of $0.035/kWh for exports → Estimated payback: 19 to 22 years. The system is financially marginal at best.

North Dakota homeowner, $95/month electric bill → Installs 7kW system at $3.10/watt after federal credit ($15,295 net cost), limited sun hours, no state incentive → Annual savings: roughly $640. Payback: 24 years. Hard to recommend.

Michigan homeowner, zero-export design → Works with installer to size a 6kW system explicitly for on-site consumption only, monitors closely with a home energy monitor like the Emporia Vue (the site may earn a commission on purchases like this) to avoid exporting to the grid at low rates → Payback drops to approximately 11 years. Still longer than Arizona or Massachusetts, but workable.

When a “Bad State” Is Still a Good Decision

I want to be honest: none of this is a flat “don’t do it.” If you’re building a new home in North Dakota and you want energy independence, or if you’ve got a south-facing roof with no shading and you’re financing the system at a low rate, the calculus can still work in your favor. The U.S. Department of Energy’s homeowner solar guide has good baseline tools for estimating production.

What I’d push back on is the universal “solar saves everyone money” claim that floats around installer marketing. It doesn’t. In Louisiana, Idaho, Indiana, or Michigan with standard net metering, you may be looking at a financial decision that barely breaks even before the panels need maintenance or replacement inverters. That’s a real cost people overlook. A string inverter on a 2026 install will likely need replacement around year 12 to 14. Figure $1,200 to $2,000 for that, and suddenly your already-slim margin gets thinner.

If you’re in one of these states and still want to explore it, get quotes from at least three installers on EnergySage to see competitive pricing, and ask each one specifically about your utility’s net metering rate and the export compensation structure.

Sources

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