Average Residential Electricity Prices by State (2026): What Solar Has to Beat

If you are considering rooftop solar, there is one number that matters more than panel wattage, brand, or even system cost: the price you currently pay for each kilowatt-hour (kWh) of grid electricity. That price is the benchmark solar has to beat. Every kWh your panels produce is worth exactly what you would otherwise have paid your utility for it — no more, no less.

According to the U.S. Energy Information Administration (EIA), the average U.S. residential electricity price was 18.31 cents per kWh in July 2026, up 4.9% from 17.45 cents a year earlier. But the national average hides an enormous spread. In the same month, a homeowner in Hawaii paid 48.00 cents per kWh while one in Louisiana paid 12.72 cents — nearly a fourfold difference for the identical unit of energy.

This article lays out the July 2026 residential prices for eight states we re-checked against EIA data in October 2026 — New York, Massachusetts, Connecticut, New Jersey, Pennsylvania, Illinois, Ohio, and Michigan — and explains how those prices translate into solar payback.

What This Number Actually Measures

The EIA figures in this article come from Table 5.6.A of the Electric Power Monthly, which reports the average price of electricity to ultimate customers. A few things to understand about that number:

• It is an average revenue per kWh, not a posted tariff. The EIA divides total residential retail revenue by total residential retail sales. It blends together every residential rate plan, tier, and customer in the state.
• It is all-in. Unlike a "supply-only" rate you might see advertised by a competitive supplier, the EIA average includes delivery charges, because it is based on what customers actually paid in total.
• It is a monthly snapshot, and it is preliminary. The figures below are for July 2026, the most recent month published when we checked. Monthly prices move with seasons, fuel costs, and rate cases, so a single month is not a full-year average. Use it as a current benchmark, not a permanent figure.
• Your bill may differ. Your own effective rate depends on your utility, your rate plan, and your usage. The most accurate number for your solar math is your own: take your total electric bill for a recent month and divide it by the kWh used. If your result is well above your state's average, solar is likely to look better for you than the state average suggests — and vice versa.

Residential Electricity Prices: Eight States, July 2026

Source: EIA, Electric Power Monthly, Table 5.6.A, July 2026 data (preliminary). All figures are residential-sector average prices in cents per kWh. Year-over-year percentages are calculated from the EIA figures.

Three things stand out in this table:

1. The Northeast is expensive. Massachusetts (30.49¢) and New York (29.90¢) sit roughly 65% above the national average. In these states, every kWh a solar panel displaces is worth a lot, which is the single most favorable condition for solar economics.
2. Most of these states got more expensive fast. New York, Pennsylvania, Illinois, Michigan, and Ohio all saw residential prices rise roughly 11–14% in a single year — more than double the national rate of increase. Rising prices shorten solar payback periods, because the savings from each panel grow while the system cost is fixed.
3. Connecticut is the exception. It is the only state in this group where the average fell, dropping 12.5% year over year. That decline followed a regulator-approved interim residential rate cut that took effect in May 2026. Connecticut remains well above the national average, but the drop is a reminder that prices can move in both directions — and that a single month's figure is a snapshot, not a trend.

For context on the national range: the same EIA table puts California at 33.61 cents and Hawaii at 48.00 cents per kWh in July 2026, while the lowest states were Louisiana (12.72¢) and Nevada (12.77¢). The eight states in our table span the upper-middle of that range — none of them is a cheap-electricity state.

Why Prices Differ So Much From State to State

The gap is not random. It reflects real differences in how electricity is generated, delivered, and regulated:

• Generation mix. States that rely heavily on natural gas, or that import power from neighbors, are exposed to fuel and transmission costs. States with abundant local hydropower or wind tend to pay less.
• Delivery costs. Getting electricity to homes in a dense metro area is cheaper per customer than serving a spread-out rural grid. Urban states with older infrastructure can also carry higher maintenance and upgrade costs, which show up in delivery charges.
• Market structure. In deregulated states, customers can choose a competitive electricity supplier, but the delivery portion of the bill is still set by the regulated utility. In regulated states, one utility handles both, with rates approved by a state commission. Neither structure guarantees low prices — New York and Massachusetts are both high-price states with different market designs.
• Policy and fees. State-level charges, energy-efficiency programs, and grid-modernization investments are recovered through electricity bills, and they vary widely by state.

None of this is something a homeowner can change. But it is something a homeowner can respond to — and that is where solar comes in.

How Your Electricity Price Drives Solar Payback

The payback math for rooftop solar is straightforward in principle:

Annual savings ≈ kWh your panels produce each year × the price per kWh you would otherwise pay

(Under net metering, exported kWh may be credited at the full retail rate or a lower rate depending on your state's rules — see our net-metering guide. For simplicity, the examples below assume each kWh produced offsets a kWh bought at the residential price.)

Two consequences follow:

• A higher electricity price means more savings per panel. A panel in Massachusetts displaces electricity worth about 30 cents per kWh. The same panel in Ohio displaces electricity worth about 19 cents. Same hardware, same sunlight assumptions — very different financial return.
• Rising prices make solar more valuable over time. If your electricity price rises after you install solar, your annual savings rise with it, because you are avoiding purchases at the new, higher price. That is why the 11–14% single-year increases in five of the eight states above matter: they directly improve the economics of systems installed today.

Incentives can change the picture too, but they vary by state and change over time. For current incentive policy, check IRS guidance and the DSIRE database — this article does not quote incentive amounts, because they may already be out of date by the time you read it.

Worked Examples: Same Panels, Different Prices

To make the price effect concrete, compare two identical hypothetical systems. Both are 8 kW rooftop systems. Both are assumed to generate 1,200 kWh per kW per year — a mid-range planning figure; actual output depends on roof orientation, shading, and local sun conditions. Both are assumed to cost $24,000 gross (before any incentives) — an illustrative round number, not a quote; real installed costs vary by installer, roof, and equipment.

Example 1: Massachusetts (30.49¢/kWh)

• Annual generation: 8 kW × 1,200 kWh/kW = 9,600 kWh
• Annual savings: 9,600 kWh × $0.3049 = $2,927 per year
• Simple payback: $24,000 ÷ $2,927 ≈ 8.2 years

Example 2: Ohio (19.45¢/kWh)

• Annual generation: 8 kW × 1,200 kWh/kW = 9,600 kWh
• Annual savings: 9,600 kWh × $0.1945 = $1,867 per year
• Simple payback: $24,000 ÷ $1,867 ≈ 12.9 years

Same panels. Same assumed cost. Same assumed generation. The payback differs by roughly 4.7 years — purely because of the electricity price.

This is a simplified, before-incentives illustration. Real payback depends on your actual generation, your net-metering rules, your real installed cost, and any incentives you qualify for. But the directional lesson is robust: in high-price states, solar has a much lower bar to clear, because the electricity it replaces is expensive.

What to Do With Your Number

1. Find your own rate. Divide a recent total electric bill by the kWh used. That is your real benchmark — more useful than any state average.
2. Compare it to the table above. If you are paying well above your state's average, your payback will likely beat the state-level estimates. If you are below it, be more conservative.
3. Run the calculator. Plug your actual bill and rate into a solar calculator to get a payback estimate for your roof, rather than relying on state averages.
4. Check the fine print. Net-metering rules determine how exported electricity is credited, and that can matter as much as the price itself. If your state credits exports below the retail rate, your effective savings per kWh will be lower than the headline price suggests.

Electricity prices will keep moving — in July 2026, five of the eight states we tracked rose more than 11% in a year. The price you pay today is the hurdle solar has to beat, and in most of these states, that hurdle is getting higher.

Sources

• U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, "Average Price of Electricity to Ultimate Customers by End-Use Sector, by State, July 2026 and 2025 (Cents per Kilowatthour)." All state and U.S.-average figures in this article are from this table. Source URL: eia.gov — queried October 13, 2026.
• Connecticut's year-over-year decline is consistent with reporting that the state regulator approved an interim residential rate cut effective May 1, 2026. See coverage summarized at: theenergycollective.com — accessed October 13, 2026.
• For current incentive policy, see IRS guidance ( irs.gov) and the DSIRE database ( dsireusa.org). No incentive amounts are quoted in this article.

Related Guides

• Solar Panel Payback Period by State — see our state-by-state payback breakdown. This article covers the price input; that article covers the payback output.
• How Net Metering Works — how net metering affects what your solar electricity is worth.
• Is Solar Worth It? — the broader decision guide for readers who want the full picture beyond price.