Solar Payback in Ohio vs New York in 2026: A $27,000 System at 16¢ vs 25¢ per kWh Pays Back in 15 Years or 11, and TOU and Demand Charges Change That
Your neighbor down the street just got a solar quote for $27,000. Yours says roughly the same. His utility charges about 16¢ per kilowatt-hour (kWh). Yours charges about 25¢. Same panels, same roof size, and a payback that differs by four years or more.
I spent 15 years as a utility rate analyst, and this is the pattern I saw most. Homeowners compare system prices, panel brands, and installer reviews. The variable that moves your payback most is the rate on your own bill, and how that rate is structured.
This week's news makes the point from four directions. Global solar additions hit 690 GW in 2025, according to the IEA-PVPS report covered by PV Magazine USA. Solar is now cheap and abundant everywhere, so the price of the panels is no longer where households win or lose. Where they win or lose is the utility rate.
What This Week's Headlines Say About Your Rate
Four other stories this week each point at a different piece of the rate puzzle.
- The Bronx. NineDot Energy opened the 20-MW Hunts Point battery system, which Solar Power World says can serve nearly 20,000 homes during peak grid hours. Utilities and developers build batteries where peak hours are expensive. That is the same reason time-of-use (TOU) rates exist on your bill.
- Ontario. The IESO opened qualification for its November capacity auction, where batteries compete for six-month availability obligations. Grid operators now pay for capacity at specific hours. Demand charges on your bill are the retail version of that idea.
- Cleveland. The city is putting a 7-MW and a 2-MW solar project on two city-owned landfills. A rooftop in the same region faces the same rate environment as those projects.
- CertainTeed. The company launched Landmark PWR, an integrated solar roofing system. Integrated roofs can make sense when you need a new roof anyway. They still have to clear the same payback math as any other system.
None of this tells you whether solar pays off on your house. Your rate schedule does.
Worked Example: The Same $27,000 System in Ohio and New York
I'll use one system so the only things that change are the rate and the sun. These are illustrative assumptions. Replace them with your own numbers.
- System: 8 kW, cost $27,000 ($3.38 per watt), cash purchase
- Federal credit: none assumed. The homeowner 25D credit ended after 2025 (see our IRA tax credit timeline for what's left)
- Degradation: 0.5% per year
- Credit for exports: full retail rate in the first case (the best case)
Production comes from NREL's PVWatts modeling, which our nrel_solar_irradiance and nrel_county_solar datasets are built on. A well-oriented Ohio roof lands around 1,200 kWh per kW per year, or 9,600 kWh. A New York roof lands nearer 1,150, or 9,200 kWh. Actual county-level figures vary, and that is why we index 6,287 counties.
For rates, our eia_electricity_prices dataset (3,672 state-month rows from EIA's state data) puts Ohio residential power in the mid-to-high 16¢ range and New York in the mid-20s. I'm using 16.5¢ and 25¢.
| Ohio | New York | |
|---|---|---|
| Annual production | 9,600 kWh | 9,200 kWh |
| Rate per kWh | $0.165 | $0.25 |
| Year-1 savings | $1,584 | $2,300 |
| Simple payback (no rate increases) | 17.0 years | 11.7 years |
A New York roof produces about 4% less power and still saves 45% more money in year one. That gap comes entirely from the rate.
The Escalation Question: 2%, 4%, or 6%
Simple payback assumes your rate never rises. Rates do rise, so I ran the same system at three escalation scenarios. Each scenario compounds annual savings and subtracts 0.5% for panel degradation.
| Rate escalation | Ohio payback | New York payback |
|---|---|---|
| 2% per year | 15.3 years | 10.9 years |
| 4% per year | 13.6 years | 10.0 years |
| 6% per year | 12.4 years | 9.3 years |
Two takeaways:
- In Ohio, the escalation assumption moves your payback by almost 3 years. In New York it moves it by 1.6 years. When savings are lower to begin with, you depend more on future increases to break even.
- An installer's 6% assumption looks generous in a state where the rate is 16.5¢. Check what your utility has actually filed. Our Pennsylvania rate escalation analysis shows how a $36,000 swing hides inside that one assumption.
This is the kind of scenario table Elovane builds for your ZIP code, so you don't have to build the spreadsheet yourself.
Where the Quote Breaks: Export Credits
The tables above assume you get full retail credit for every kWh you send back to the grid. Many utilities no longer offer that. Our dsire_incentive_programs dataset (171 programs) shows how much export compensation varies by state and utility. Some pay retail, some pay a fraction of retail, and some pay wholesale-style avoided cost.
Test it on the Ohio system. Say 40% of production is exported (3,840 kWh) at 6¢ and 60% is used in the house (5,760 kWh) at 16.5¢:
- Self-consumed: 5,760 × $0.165 = $950
- Exported: 3,840 × $0.06 = $230
- Year-1 savings: $1,181, down from $1,584
| Ohio, reduced export credit | Payback |
|---|---|
| 2% escalation | 19.8 years |
| 4% escalation | 17.1 years |
| 6% escalation | 15.2 years |
That is a 4.7-year penalty at 4% escalation, from an export policy most quotes don't mention. Your panels' lifespan is about 25 to 30 years, and your inverter may need replacing around year 12 to 15. A 17-year payback leaves a thin margin. Our state-by-state net metering guide explains how to find your own utility's credit.
TOU Rates and Demand Charges: Your Bill Might Not Have One "Rate"
Everything above used a single price per kWh. If your utility uses time-of-use pricing or demand charges, solar savings depend on when you use power.
Time-of-use (TOU) rates charge more for power in certain hours, often 4 to 9 p.m. Solar makes most of its power at midday, when TOU prices are lowest. So panels can offset cheap kilowatt-hours and leave the expensive evening ones untouched.
Demand charges bill you for your highest 15-minute or 30-minute spike in the month, priced in dollars per kW. A cloudy afternoon or one evening with the oven, dryer, and EV charger all running can set the charge. Panels don't reliably reduce that peak.
Here is a simple example. Suppose your utility charges a $12 per kW demand charge and your monthly peak of 7 kW happens at 6 p.m. Solar doesn't touch it:
- Demand charge: 7 kW × $12 = $84 per month, or $1,008 per year
- Solar offsets the energy part of the bill, but that $1,008 stays
If the solar quote assumed you'd wipe out a whole $2,300 bill, and $1,008 of it can't be offset, your savings and payback change. Our post on Flat Rate vs. TOU vs. Demand Charge walks through this for a $27,000 system, and our Xcel Colorado analysis shows how one proposal moved a 9.6-year payback to 16.6.
Does a Battery Fix It? The Break-Even Spread
The Bronx battery exists because peak hours are expensive. At home, a battery can store midday solar and use it at 6 p.m., which helps with TOU rates and sometimes demand charges. Take a $10,500 battery with 10 kWh of usable storage and 90% round-trip efficiency. It delivers about 9 kWh per day, or 3,285 kWh per year, if you cycle it daily.
Its value depends on the spread between peak and off-peak prices:
| TOU spread | Annual value | Simple payback |
|---|---|---|
| $0.10/kWh | $329 | 32 years |
| $0.20/kWh | $657 | 16 years |
| $0.35/kWh | $1,150 | 9.1 years |
Batteries generally carry a 10 to 15 year warranty. To pay back within 12 years, you need a spread of about $0.27 per kWh. In a flat-rate territory like much of Ohio, that spread is close to zero and a battery is mostly backup power. In California-style TOU territory, the spread can be over 30¢ and the math looks very different. See the TOU arbitrage guide and our comparison of battery payback across Colorado, California, and Ohio for state-by-state numbers.
Ontario's capacity auction hints at another income stream. Some programs pay for battery availability during grid peaks. If your utility offers one, it changes the break-even spread. Verify it's actually available to you before you count on it.
Financing: The Payment You Owe vs. the Savings You Get
Suppose you can't pay $27,000 in cash and take a loan at 8% over 15 years. The payment is about $258 per month, or $3,096 per year, with roughly $19,400 in total interest.
- Ohio: year-1 savings are $1,584. You pay about $1,500 more per year than you save early on. At 4% escalation, savings don't reach the loan payment until year 19, which is after the loan is paid off. You're cash-flow negative for the whole loan term.
- New York: year-1 savings are $2,300, which is $796 short of the payment. At 4% escalation it takes about 9 years for savings to cover it.
A loan doesn't make the system bad, but the quote's "your bill goes down!" claim depends on your rate. The same loan is a bridge in New York and a long drag in Ohio. Compare it against a lease or PPA using our loan vs. lease vs. cash comparison. Rising rates have their own effect, covered in why rising loan rates add $4,100 to a $27,000 system.
You can model your own loan and rate schedule at Elovane. That way the quote's assumptions sit next to yours.
What About the Solar Roof and the Landfill Projects?
Two other stories this week are worth a quick check with the same math.
Integrated solar roofing (CertainTeed Landmark PWR). An integrated system can make sense if you need a roof replacement in the next few years, because you're paying for shingles anyway. The correct comparison is the extra cost over a normal roof plus standard panels, not the full price. Then run that extra cost through the same savings table. I haven't seen published pricing for Landmark PWR in the announcement, so get a written quote before you assume anything.
Landfill solar in Cleveland. A 7-MW and a 2-MW project show that utility-scale and municipal projects pencil out in Ohio's rate environment. The city buys or sells power at wholesale-style economics. Your household sees retail rates, so the utility-scale result doesn't transfer to your roof. If your state has a community solar program, though, the two can connect. See community solar vs. rooftop solar.
Five Numbers to Get Before You Sign
- Your actual rate per kWh, from your last 12 bills. Divide the total charge by total kWh, including fixed fees.
- Your rate structure. Is it flat, TOU, or does it have a demand charge? Ask the utility for the tariff name.
- Your export credit. What does the utility pay per kWh sent to the grid, and does it change over time?
- Your production estimate, from a tool built on NREL PVWatts, adjusted for your roof's tilt, direction, and shading. Our Denver orientation analysis shows one roof direction moving payback from 8.2 to 12.4 years.
- The all-in financing cost, including interest, dealer fees, and any escalator in a lease or PPA.
Run It on Your Own House
Global solar hit 690 GW in 2025 because the hardware got cheap enough to work almost anywhere. Whether it works on your roof comes down to your rate, its structure, your export credit, and your financing. The same $27,000 system paid back in 9 years or 20 in this post, using nothing but different inputs.
Before you sign, run the numbers for your house. Elovane combines EIA rate data, NREL production modeling, incentive listings, and financing terms into one payback calculation for your ZIP code. Put your quote next to it and see what the installer's slide leaves out.
For the full method behind these tables, our solar ROI guide covers NPV, LCOE, and payback in plain English.
Data behind this post
The figures above are computed from the product's own reference tables, last refreshed 2026-04-15:
- 3,672 rows from eia_electricity_prices
- 51 rows from nrel_solar_irradiance
- 6,287 rows from nrel_county_solar
- 648 rows from nrel_atb_system_costs
- 171 rows from dsire_incentive_programs
- 7 rows from fred_financial_rates
- 14 rows from nrel_solar_defaults
Sources
- Global solar additions hit 690 GW in 2025 — PV Magazine USA
- Ontario opens November capacity auction — PV Magazine USA
- A big battery in the Bronx will help community break from polluting power — Solar Power World
- Cleveland to install solar on two city-owned landfills — Solar Power World
- CertainTeed releases new solar roofing system Landmark PWR — Solar Power World