“If you thought your 2025 was rough, wait until you hear about the year Solar’s had.”
A lot of crazy changes have shaken up the solar industry, and the aftershocks are still to be felt. So with all the changes affecting residential solar we thought we’d ask if solar will still be worth it in 2026.
So is it worth it to go solar in 2026?
Well… it’s complicated. The thing is, solar will never go away. In fact, solar is the most positively perceived energy source. According to a 2025 national energy study from the Davies Group, Solar leads with 84% positive perception. So solar energy will still be around in one form or another.
But for residential solar, the math is going to change. The cost-benefit analysis is shifting in ways that aren’t exactly clear yet. You see, there are both expansionary and contractionary forces pushing on the residential solar market. So let’s explore these forces by figuring out what happened in 2025. And then try to forecast what will happen in 2026.
What changed the residential solar industry in 2025?
The most significant change is the accelerated phase out of the Solar Investment Tax Credit.
Back in 2022, the Biden administration passed the Inflation Reduction Act (IRA), a landmark piece of legislation. It did a lot of things but for the solar industry it introduced various tax credits.
And for years, homeowners benefited from the Solar Investment Tax Credit (ITC). This incentive said that if you invest in solar, you can reduce the amount of taxes you owe by 30% of your net investment.
Let’s say the net cost for your residential solar system is $30,000. Tax season rolls around, and you owe $15,000. You apply your solar tax credit of $9,000 (30,000 x 0.3), reducing the amount you owe to $6,000. If you owe less than your tax credit, you can roll it over for up to five years.
So the ITC essentially makes a $30,000 investment cost $21,000 instead, making solar much more affordable. Originally, the ITC was going to gradually phase out by 2035. However, the second Trump administration is killing it on December 31st, 2025.
If you buy solar before 2026, then you can get grandfathered in, meaning you can have the tax credit for as long as it lasts. But if you go solar on or or after January 1, 2026, you will not be eligible for the tax credit.
That buy-now-while-this-deal-lasts mentality has caused a surge in residential solar demand. EnergySage, an online marketplace connecting homeowners to solar installers like us, reported an increase of 205% back in August. That’s double the amount of homeowners seeking solar installers compared to last year.
Homeowners clearly want solar and that’s partially due to rising utility costs.
Secondly, utility prices are rising at a record rate.
Historically, national electricity prices rise by around 3% each year. In 2025, electricity prices increased by around 4%, with some states jumping as high as 6%. That may not sound like much because those are averages.
However, the U.S. Energy Information Administration has a helpful, interactive map that compares current prices to last year’s. Virginia experienced an increase of around 10-15%. For people on the high end, like those in Washington D.C. that’s about $21 more a month. For those in Virginia Beach, it’s about $8 to $18 more a month.
These numbers vary across the region but they are only going to get higher! This rising trend is expected to continue into 2026 and beyond.
Some good news: net metering isn’t going away.
Back in our article, net metering is about to change, we discussed how utility companies wanted to pay less for your excess energy.
A quick refresher on net metering: Solar home systems often produce a surplus of electricity during peak sunlight hours. That energy can be stored in a battery backup system or sold to the utility company. The word “sold” is misleading. You can’t actually sell power to the utility company for money. Instead you earn credits equal to the full retail rate of your energy. It’s basically like returning an item to earn store credit.
Back in the spring Appalachian Power Company (APCo) and Dominion Energy both proposed reducing the net metering rate by 70%. Instead of crediting you $0.16 per kWh, they would credit you $0.04. All while still charging you the full retail rate for the energy you consume. Instead of being an equal exchange, you’d have to give four kWhs of power just to pay for one kWh! That change would further kneecap the residential solar industry.
Thankfully, communities and solar advocates pushed back, saving net metering!
The utility companies have to present and defend their proposal to the Virginia State Corporation Commission (SCC). And this past fall Virginia’s SCC fully rejected the Appalachian Power Company proposal. Net metering is staying at a 1:1 exchange rate. Dominion Energy’s proposal still has their case pending, however, the SCC has set a precedent.
That’s all thanks to solar advocates like you! In fact, our good friends over at Solar United Neighbors (SUN) led the charge. We worked with them in the past to build out a solar co-op for a Hampton Roads neighborhood.
Unfortunately, the fight’s not over yet. The utility companies are going to revise their proposal and try again. Nonetheless, it’s a victory for solar. If you’re curious about how you can help your community, consider taking action with SUN.
So what’s going to happen to solar in 2026?
Remember, both expansionary and contractionary forces are pushing the residential solar market. So there’s two main arguments regarding solar prices.
- Contraction: Prices will rise because the industry will shrink. Supply chains are being disrupted. Installers will close shop. There’ll be less solar jobs.
- Expansion: Prices will drop due to reduced demand and increased market competition. Solar technology is also becoming cheaper to produce.
So which prediction is right? Well… they’re both right. The general census among industry experts is that the industry will shrink in 2026, but it will continue to thrive after those initial hurdles. Let’s explain why.
So what’s going to happen to residential solar without the 30% tax credit?
Without the ITC, that $30,000 residential solar setup is going to cost you the whole $30,000. Remember when we mentioned that EnergySage experienced a surge in demand? Well that high demand isn’t going to last forever. Industry experts are expecting a 25% decrease in residential installations starting in January 2026.
That is a pretty steep drop. We discussed the cost-benefit analysis of Solar before but it is worth revisiting.
Firstly, solar is an investment and a home renovation. In fact, real estate studies show that homes with residential solar systems sell faster and for more. Homes with solar sell for an average of 6.9% than homes without solar. According to a study from Zillow, solar can increase your sale price by around $25,000.
Secondly, investment comes with a payback period and a return on investment (ROI). Payback period is the time it takes to recoup the costs of your investment. According to EnergySage, the average payback period with the ITC in Virginia is 8.9 years. That means it takes about 9 years for your energy savings to add up to your initial investment.
However, without those savings from the ITC… EnergySage predicts residential solar in Virginia will now take 12.7 years to pay for itself. That’s an additional 4 years! And that shortens your time to earn your return on investment.
So without the ITC, it seems like solar will become less affordable, profitable, and accessible. But don’t lose your head just yet. It’s not all doom and gloom for the solar industry.
The ITC didn’t make people go solar, rising utility prices did.
The ITC was just an incentive, a little push people needed to make the change. But the root problem is still there.
People want control over their energy. They don’t want to pay a utility company; they want energy independence.
Just ask any of our past clients.
“When I first moved here ten years ago, my electric budget was around $129. It’s gone up to $256. That’s why I wanted to look into solar because I knew it was only going to increase… [solar] will keep my bills from going up in the future.”
That’s from Laura Kippes, a homeowner in the Hampton Roads area and a proud solar system owner. We installed a 16.6 kW system to offset 83% of her energy consumption in February of 2024. And her solar system has kept her rates low. “These past two months, my bill has been $9.33,” she says. Watch the Customer Testimonial: Laura Kippes’ Experience with Convert Solar.
And solar is only going to get cheaper. In the 1970s, when Jimmy Carter installed solar panels on the roof of the white house, solar cost over $100 per watt. By 2005, solar panels dropped to around $12 to $15 per watt. Today it is about $2.74 to $3.30 per watt.
And it is only going to get cheaper in the long-term. Some industry leaders are aiming for a target price of $2 per watt. Now that’s probably not going to happen in 2026, but $2 per watt is feasible for the near future (5 to 10 years).
Should you go solar in 2026?
There’s a lot to consider. As your local solar company in Virginia Beach, we believe you should go solar when you’re ready. We recommend scheduling a free site assessment. This site assessment will analyze your home and energy consumption to provide you with a realistic plan for going solar.
We’ve been installing solar long before the solar tax credit, and we’re going to stick around long after it disappears! Because at the end of the day we believe in solar, not in some subsidy. We’ve been consistently recognized by EnergySage as one of the best solar companies in Virginia.
