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NuWatt designs, installs, and manages solar, battery, heat pump, and EV charger systems across 9 states. One company, one warranty, one point of contact.
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In high-rate states (MA, CT, RI), solar delivers 8-12% IRR even without the federal tax credit — comparable to long-term stock market returns with zero market risk. Rhode Island leads with 14-18% IRR thanks to the REG program.
The federal tax credit is gone. Is solar still a better investment than the S&P 500? We ran the numbers for every NuWatt state. The answer depends on where you live — and what you pay for electricity.
For over a decade, the solar pitch was simple: the federal government hands you 30% of the cost back on your taxes (Section 25D), and you get free electricity for 25 years. The math was so favorable that financial advisors routinely recommended solar over additional stock market investment for homeowners.
That 30% guarantee ended on December 31, 2025. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, killed Section 25D for homeowners buying with cash or loans. The old “30% guaranteed return from the IRS” argument is gone.
Now the question is pure economics: does the electricity savings stream from solar beat what you would earn investing the same money in the stock market?
In the Northeast, where utility rates range from $0.26 to $0.33 per kWh, the answer is often yes — and it is not even close in the strongest markets. Here is the state-by-state breakdown.
The residential solar tax credit ended December 31, 2025. Cash and loan purchases receive $0 in federal tax credits.
Third-party owned systems (lease, PPA, Propel) can still access the 30% commercial ITC through July 4, 2026.
Internal rate of return (IRR) on an 8 kW cash purchase. These figures assume 1,200 kWh/kW annual production, 0.5% annual degradation, and 4% annual utility rate increases.
REG $3,060/yr (Small I, 15 yr) OR REF $5,000 upfront (pick one)
Strongest return. REG guarantees $0.27/kWh for 15-20 years on top of net metering credits.
SMART $288/yr
Highest utility rate in NuWatt territory. SMART 3.0 adds steady income.
None (state rebate ended)
High rates alone drive strong returns even without active state incentives.
ADI ~$860/yr
ADI payments add $860/yr for 15 years. Sales tax exempt on equipment.
None (state rebate repealed)
No state incentive, but NEM 2.0 credits locked through 2041.
None
1:1 net metering for rooftop solar. Strong for oil-heated homes adding heat pumps.
None
Lower utility rates limit returns. Best for high-usage households (>1,500 kWh/mo).
Note: S&P 500 10% is the nominal historical average. After taxes on dividends and capital gains (15-20%), the effective return drops to ~7-8%. Solar savings are not taxed.
Comparing solar to the stock market is not apples to apples. Solar has structural advantages that financial advisors rarely discuss.
Your electricity bill is certain. You will pay it every month for the life of your home. Solar eliminates that cost with no uncertainty about future returns.
Stock returns average 10% historically but individual years range from -37% to +53%.
Solar savings are not taxable income. A $3,200 annual electricity savings is equivalent to earning $4,300 pre-tax for someone in the 25% bracket.
Stock dividends and capital gains are taxed at 15-20%, reducing your effective return.
Utility rates have increased 3-5% annually in the Northeast for 20 years. Your savings grow every year without doing anything.
Stocks do not specifically protect against utility cost inflation.
No drawdowns, crashes, or bad years. The sun rises every day. Your system produces energy rain or shine, with output predictable to within 5%.
The S&P 500 has had 11 negative years since 2000, including a 38% crash in 2008.
Solar adds approximately 4% to home value according to Zillow research. On a $400,000 home, that is $16,000 in equity on top of energy savings.
Stocks in a brokerage account add nothing to your property value.
Solar is not the right investment for everyone. Here are the scenarios where putting $25,000 into the stock market is probably the better financial decision.
If you pay less than $0.15/kWh, the savings stream is too small to generate competitive returns.
States like TX without net metering guarantees or production incentives reduce the total return.
Solar payback typically takes 7-12 years for cash purchases. You will recover some through home value increase, but the full ROI needs time.
If your roof has less than 15 years of life remaining, you will need to remove and reinstall panels — adding $3,000-$5,000 to your total cost.
Trees, buildings, or other obstructions that reduce production below 80% of ideal make the investment math unfavorable.
If you have room in a 401(k) or IRA, the employer match and tax deferral may beat solar returns.
$25,600 invested in solar (Massachusetts example) vs $25,600 in the S&P 500. Solar wins in high-rate states because utility rates compound, savings are tax-free, and the system still produces at 87%+ after 25 years.
| Year | Solar Cumulative Net | S&P 500 After-Tax Gain | Winner |
|---|---|---|---|
| Year 1 | $-22,112 | +$1,920 | Stocks |
| Year 5 | $-7,022 | +$11,722 | Stocks |
| Year 10 | +$14,708 | +$30,600 | Stocks |
| Year 15 | +$40,168 | +$61,003 | Stocks |
| Year 20 | +$70,035 | +$109,968 | Stocks |
| Year 25 | +$105,101 | +$188,826 | Stocks |
Year 10
Stocks Lead
Solar: +$14,708 vs Stocks: +$30,600
Year 15
Stocks Lead
Solar: +$40,168 vs Stocks: +$61,003
Year 25
Stocks Lead
Solar: +$105,101 vs Stocks: +$188,826
If you do not have $25,000 to invest — or prefer to keep your capital in the market — a solar lease or PPA offers a different value proposition. It is not an investment comparison. It is a savings decision.
In high-rate states like Massachusetts ($0.33/kWh), Connecticut ($0.30/kWh), and Rhode Island ($0.29/kWh), solar delivers 8-18% IRR — comparable to or better than the S&P 500 historical average of 10% nominal. The key advantage is that solar returns are guaranteed and tax-free, while stock returns are variable and taxable.
Without the 25D tax credit (which expired December 31, 2025), solar IRR for an 8 kW cash purchase ranges from 5-7% in lower-rate states like Texas to 14-18% in Rhode Island, which has the REG program and REF rebate. The Northeast average is 8-12% depending on utility rate and state incentives.
As of 2026, high-yield savings accounts and CDs offer 4-5% returns. In every NuWatt state except Texas, solar returns exceed this benchmark. Unlike CDs, solar returns grow over time as utility rates increase 3-5% annually.
Yes. Zillow research shows solar-equipped homes sell for approximately 4% more than comparable homes. On a $400,000 home, that represents $16,000 in additional equity. This value increase is separate from the energy savings return.
You recover value two ways: the home value premium (approximately 4%) and the ability to market lower energy costs to buyers. Most solar systems transfer with the home at closing. If you move within 5 years of installation, you likely will not recover your full investment but will still gain from the home value premium.
Texas solar returns (5-7% IRR) are below the S&P 500 historical average. If you have a low utility rate and no state incentives, investing the $22,000 in a diversified index fund may produce higher total returns. However, solar still provides guaranteed, tax-free savings and energy independence.
Yes, in the right markets. Section 25D provided a 30% upfront discount, but it did not change the underlying economics of solar. In states where electricity costs $0.25/kWh or more, the savings stream alone produces strong returns. The tax credit made good investments great — its absence does not make them bad.
A solar lease or PPA is not an investment — it is a savings decision. You pay $0 upfront and save 10-30% on electricity from day one. Through July 4, 2026, the financing company can still claim the Section 48 commercial ITC, passing some of that savings to you through lower rates.
See your personalized IRR based on your state, utility rate, roof size, and available incentives. Free instant estimate — no phone call required.