How We Rank Solar Viability
The best states for solar combine three factors: sun hours (how much energy the panels produce), electricity rates (the value of each kWh produced), and state incentives (tax credits, rebates, net metering quality). A sunny state with cheap electricity may rank lower than a cloudier state with high rates and strong incentives.
Top 5 States for Solar in 2024
1. California
Despite California's complex new NEM 3.0 net metering policy (which reduced export credits), the combination of 5.5–6.5 peak sun hours, some of the highest electricity rates nationally (30+ cents/kWh), property tax exclusions, and zero sales tax on solar keeps California near the top. EV-pairing with solar and battery storage creates the strongest economics.
2. Massachusetts
Massachusetts punches above its weight. With the SMART program (guaranteed fixed payments for solar generation for 10 years), 15-year net metering commitments, and among the highest electricity rates in the continental US (25+ cents/kWh), Massachusetts often achieves payback periods of 5–7 years — faster than sunnier states.
3. New Jersey
New Jersey's Solar Renewable Energy Credit (SREC) market has historically provided strong additional income from solar generation. Combined with above-average rates and strong net metering, NJ offers excellent solar economics.
4. Arizona
Arizona gets 300+ sunny days per year and 6–6.5 peak sun hours — among the best in the nation. Electricity rates are moderate (12–14 cents/kWh), but high production compensates. Some utilities (Salt River Project) have less favorable net metering, so the utility matters significantly here.
5. Texas
Texas's deregulated market allows homeowners to choose electricity plans that optimize solar economics. Excellent sun in most of the state, zero state income tax (no state ITC, but the federal one applies), and growing solar incentives from utilities make Texas a strong solar state.
States Where Solar Is Challenging
Alaska
Very limited sunlight (1.5–3 peak sun hours), short summer days, and harsh weather make solar impractical for most of Alaska. The exceptions are off-grid applications where solar-battery systems can be cost-effective compared to generator fuel.
Pacific Northwest (Oregon, Washington)
The Pacific Northwest has abundant, cheap hydroelectric power — electricity rates run 10–12 cents/kWh. The combination of relatively low sun hours and cheap electricity makes solar's payback period extend to 20+ years in many areas. Solar makes more sense in eastern Washington and Oregon, which get more sun than the coast.
Louisiana, Oklahoma, Arkansas
These states have some of the cheapest electricity in the nation (9–11 cents/kWh). Even with good sun hours, low rates make it difficult to justify solar on pure financial terms. Payback periods often exceed 15–18 years.
Net Metering Policy Matters
Net metering policies are rapidly changing across the country. States that have weakened net metering (California NEM 3.0, Arizona, Nevada in the past) have seen solar adoption slow. States with strong 1:1 retail net metering (Massachusetts, New Jersey, Maryland, New York) have the most favorable solar economics. Always check your state's current net metering policy before committing to solar — it significantly affects your ROI.
Using Our State Comparison Tool
Our solar comparison tool lets you enter your state, average monthly electricity bill, and roof characteristics to calculate a customized payback period, lifetime savings estimate, and optimal system size for your specific situation.