Cheapest vs. Priciest Electricity States and Solar Payback

By SolarCostData Data Desk · Reviewed September 2026 · Corrections log

Ask most people what makes solar worth it and they’ll say sunshine. The data says otherwise. The thing that actually decides whether a 2026 solar system pays off — now that the 30% federal credit has ended — is what you pay for grid electricity, and that number varies enormously depending on which state you live in.

So here’s what that spread looks like state by state, and what it does to solar. We pulled the average residential rate for every state from the U.S. Energy Information Administration (EIA ) and paired it with the estimated 2026 solar payback for a typical 8 kW system (federal credit set to $0). The full ranked table — all 50 states, with rank, percent versus the US average and a downloadable CSV — lives at electricity rates by state ; that page is the canonical data source, and what follows here is the top-and-bottom-10 view plus the analysis of why the gap is so stark.

The 10 priciest states for electricity in 2026

The 10 cheapest states for electricity in 2026

What the highest-to-lowest ranking tells you

Look at the two tables side by side and the pattern jumps out: the priciest-electricity states are almost exactly the fastest-payback states, and the cheapest-electricity states are the slowest. Hawaii sits alone at the top on both — the most expensive power in the country and, not coincidentally, the quickest solar payback. The high-rate Northeast and California follow. At the bottom, the cheap-power states across the Plains, Mountain West, and parts of the South offer the slowest returns, because there’s simply less expensive electricity to offset.

This is the whole 2026 solar story in two tables. Sunshine barely moves it: sunny states like Nevada and Arizona sit in the slow half because their electricity is cheap, while cloudier New England pays back fast on the strength of high rates. If an installer’s pitch leads with how sunny your roof is instead of what you pay per kilowatt-hour, they’re selling you the wrong number.

The states where rates are moving fastest

A ranking is a snapshot; the sharper question is which direction your state is heading. EIA’s Electric Power Monthly publishes each state’s average residential rate next to the same month a year earlier (Table 5.6.A ), and the June 2025 → June 2026 comparison shows anything but a uniform market. The U.S. average rose 5.0% over that year, from 17.47¢ to 18.34¢/kWh — but individual states span from a 28.7% jump to an outright decline.

The five fastest risers:

The five flattest:

Average residential price of electricity, cents per kWh, from EIA Electric Power Monthly Table 5.6.A (June 2026 edition; June 2026 figures preliminary).

Two things in that data matter for solar shoppers. First, the “cheap electricity, slow payback” label can go stale fast: Idaho and Washington sat comfortably in cheap-power territory a year ago and both just posted double-digit increases. A payback estimate built on last year’s rate understates what panels offset in a state climbing 15–19% a year. Maryland tells the same story on the East Coast — a 13.2% jump in one year means a Baltimore homeowner’s solar math looks materially better than the bill they remember. Second, movement cuts both ways — a handful of states actually got cheaper, with Connecticut the standout decline (27.19¢ down to 24.32¢, −10.6%), a reminder that high-rate states don’t only ratchet upward. Your payback math should use your current rate, not the one from the bill you remember.

What a 2¢ move in your rate does to solar payback

Those swings aren’t trivia — a couple of cents on the rate moves a solar decision by years. Use the napkin arithmetic behind our full-price cash-buyer breakeven : a typical 8 kW system at the 2026 national average price costs about $20,640 and offsets roughly 9,560 kWh a year. Divide the price by the first-year savings and your rate per kilowatt-hour is the only lever left:

• At 15¢/kWh, the system saves about $1,434 a year — a simple payback around 14.4 years.
• At the 17¢ national average (2025 full-year), savings run about $1,626 — around 12.7 years.
• At 19¢/kWh, savings reach roughly $1,816 — around 11.4 years.

So on the same panels and the same roof, two cents up cuts roughly 1.3 years off the wait, and two cents down adds about 1.7. That’s the practical meaning of the mover table above: a climb like Idaho’s 2.3¢ in a single year shortens the simple payback in that national example by more than a year without anything changing on the roof. (These are deliberately the napkin figures — straight division, no rate inflation or running costs. The full model behind every payback we publish is worked through, line by line, in the cash-buyer breakeven.)

Why is electricity so expensive in California, Massachusetts, and New York?

The expensive states aren’t expensive by accident, and the causes are structural — which is why their rates rarely fall back.

California (34.7¢/kWh) keeps climbing on wildfire-hardening costs, transmission investment, and utility rate structures that pass both through to households. Massachusetts and New York (29.6¢ and 29.5¢) sit at the end of constrained gas pipelines and pay for winter fuel premiums and an aging grid — costs that also make winter heating its own budget line, and tilt the heat pump vs. gas furnace math differently than in cheap-power states. And Hawaii, in a league of its own above 50¢, still generates much of its power from imported oil.

None of those causes involves sunshine, which is the point of this whole ranking. What those rates mean for solar in each high-rate state — and why one of them still pays back slowly despite expensive power — is worked through in our high-rate states analysis .

Which U.S. state has the cheapest electricity in 2026?

On the June 2026 EIA data behind our ranking, Nevada, at about 13.1¢/kWh, with Nebraska (13.3¢) and Utah (13.4¢) close behind. Cheap power is good news for your bill and bad news for solar payback: at those rates a full-price system takes 20-plus years to break even, which is why the cheapest-10 table above doubles as the slowest-payback list.

Which states have the highest electricity rates?

Hawaii by a wide margin — 52.7¢/kWh on the June 2026 EIA data — then California at 34.7¢, followed by the New England–New York cluster: Massachusetts and Maine near 29.6¢, New York at 29.5¢, Rhode Island at 29.2¢. Every one of them lands in the fastest-payback half of the country.

What it means for your decision

• If you’re in a priciest-10 state: solar likely still pays off well even without the federal credit — the high rate does the work. Put your real bill into the 2026 savings calculator to see your payback.
• If you’re in a cheapest-10 state: run the numbers carefully. A cash purchase may take 18+ years, so check whether a state incentive or a lease/PPA changes the math before deciding.
• Everywhere: your rate is the lever. See exactly where your state lands in the full 50-state payback ranking and the interactive solar map . If you’d rather start with a two-minute gut check than a spreadsheet, the should-I-go-solar screener asks the four questions that matter.

One more thing your rate decides, beyond solar: it sets what every electric thing in your house costs to run, from charging an EV instead of buying gas to running the heat. A ranking like this one is really a ranking of how much money efficiency is worth in your state.

Rates shift over time and utilities differ within a state, so treat these as current averages, not a locked-in quote. We refresh this ranking — and the full data page linked above — whenever the EIA numbers move.

Frequently asked questions

Sources: U.S. Energy Information Administration (EIA) electricity rates · DSIRE incentive records · public IRS/OBBBA guidance. Figures are modeled estimates, not quotes or tax advice. See our methodology.

Related blog