Solar & Savings

Solar vs. rising electric rates

Electricity prices are climbing again. Here is an honest look at how rooftop solar changes your exposure to future rate increases — and how to compare options for your specific home.

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Last updated June 6, 2026•Reviewed by the Energy Pros editorial team

Electricity prices are rising again after years of relative stability, and forecasts point to continued increases. For homeowners weighing solar, the real comparison is not "solar vs. nothing" — it is "lock in part of your power cost now vs. keep paying whatever the utility charges next year, and the year after." This page walks through how to think about that trade-off honestly.

What's driving rates higher

The EIA projects residential electricity prices to rise about 5% in 2026, with larger increases likely along the East Coast. The pressure comes from several directions at once: new demand from data centers and electrification, grid upgrades and storm hardening, fuel costs, and utility capital spending. In PJM territory — Pennsylvania, Ohio, Illinois and neighbors — capacity prices have jumped sharply, which flows through to customer bills over time.

How solar changes the equation

When you generate part of your own electricity, you shift a portion of your bill from "whatever the utility charges" to "a known cost you control." The larger your current bill, the more meaningful that hedge tends to be. Solar will not make sense for every home — shading, roof orientation, roof age, usage, and your utility's net-metering rules all matter — but for high-bill households, rising rates strengthen the case rather than weaken it.

Fixed cost vs. variable cost

Staying fully on the grid means your entire bill is variable and subject to future increases.
$0-down solar (loan, lease, or PPA) converts part of that variable cost into a more predictable monthly figure for the term of the agreement.
Solar + battery adds resilience during outages and can help with time-of-use pricing, at additional cost.

What to check before you decide

Pull 12 months of electric bills to see your real usage, confirm whether a quote is a loan, lease, or PPA, ask how the financing handles annual rate escalators, and make sure any savings estimate is built on your actual usage and utility — not a national average. Then compare at least two vetted installers.

Sources used in this guide

U.S. Energy Information Administration — Short-Term Energy Outlook
PJM Interconnection — 2026 Load Forecast Report
IEEFA — analysis of PJM capacity prices and data-center demand

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Frequently asked questions

Will solar save me money if rates keep rising?

For homeowners with higher bills, rising rates generally strengthen the case for solar because more of your cost shifts to a portion you control. The actual result depends on your usage, system size, financing terms, and your utility's net-metering rules.

Is now a better time than last year?

Many homeowners find the math has improved as utility rates climb. That said, timing should be driven by your bill, roof condition, and financing — not a deadline. There is no obligation to compare options.

What if my roof needs work?

Roof condition affects solar. If your roof is aging, it is often smarter to evaluate roof replacement and solar together so you are not paying to remove panels later.