Solar in Alaska: the 2026 numbers
A household here spending $200 a month on electricity needs roughly a 9.2 kW array, which generates about 8,473 kWh in its first year. Bought outright, it returns its cost in year 20 and is worth -$6,919 over 25 years — after discounting, after upkeep, and with no federal credit.
Our answer for Alaska: ppa
Of the four options, a ppa has the highest net present value at $2,233 , turning cash-positive in year 1 . Solar stops making sense in Alaska above roughly $2.25/W installed — if a quote comes in above that, the answer flips.
What Alaska gives you to work with
| Sunlight (specific yield) | 921 kWh per installed kW per year — NREL PVWatts v8, Anchorage |
| Average residential rate | $0.282/kWh — EIA, May 2026 |
| Export credit | 35% of retail — Exports are credited at the utility’s non-firm avoided cost, far below retail. |
| Federal credit on a purchase | None — §25D expired after December 31, 2025 |
| State incentives | Checked, and there is no cash incentive — reviewed 2026-08-15 |
The four options, run side by side
A household spending $200 a month on electricity, with the array sized to cover its usage, at the default $3.00/W installed cost. This is the same case the calculator below opens on. Net present value discounts future dollars at 5%, so these are not the inflated “lifetime savings” totals a sales quote shows.
| Option | Net present value | Payback | Cost per kWh |
|---|---|---|---|
| Cash purchase You pay for it. No fee, no interest, no escalator. | -$6,919 | Year 20 | $0.280 |
| Solar loan Includes the 20% dealer fee that a low-APR solar loan hides in the financed price. | -$17,690 | Never | $0.374 |
| Lease You rent the system. The owner keeps the §48E credit. | -$13,556 | Never | $0.338 |
| PPA You buy the output per kWh, not the hardware. | $2,233 | Year 1 | $0.200 |
A cash purchase delivers electricity at $0.280/kWh against a retail rate of $0.282 — it undercuts the utility, which is the whole case in Alaska.
Best option: PPA — $2,233 net present value over 25 years, paying back in year 1.
| Option | Owns it | 30% credit | Upfront | 25-yr NPV | Payback | Cost/kWh |
|---|---|---|---|---|---|---|
| Cash purchase | You | None | $27,600 | -$6,919 | Year 20 | $0.280 |
| Solar loan | You | None | $0 | -$17,690 | Never | $0.374 |
| Lease | Provider | Indirect (§48E) | $0 | -$13,556 | Never | $0.338 |
| PPA | Provider | Indirect (§48E) | $0 | $2,233 | Year 1 | $0.200 |
What this calculation assumes, and where it can be wrong
Federal credit. The 30% federal residential credit (IRC §25D) expired for systems placed in service after December 31, 2025. A 2026 cash or loan purchase receives no federal credit. Leases and PPAs remain eligible indirectly: the third-party owner claims the commercial credit (IRC §48E) and reflects part of it in the price offered, provided the system is placed in service by December 31, 2027.
Estimated §48E value in a lease or PPA quote: about $4,140 for this system, assuming the provider passes through half the credit. That share is our estimate, not a published figure.
Export credit. Exports are credited at the utility’s non-firm avoided cost, far below retail.
State incentives. Alaska has no state solar tax credit and no net metering at retail; exports earn the utility's non-firm avoided cost. Alaska is the most extreme case we model: the second-highest electricity price of any state, and by a wide margin the least sunlight — 921 kWh per installed kW per year against 1,777 in New Mexico. Expensive power normally makes solar work; here there is not enough sun to collect it.
- Cash purchase: No federal tax credit is applied: IRC §25D expired for systems placed in service after 2025-12-31.
- Cash purchase: Exported power is credited at 35% of retail, so savings depend heavily on using power as it is generated.
- Solar loan: Financed amount includes a 20% dealer fee, which is why a $0-down loan quote costs more than the same system bought outright.
- Solar loan: No federal tax credit is applied: IRC §25D expired for systems placed in service after 2025-12-31.
- Solar loan: Exported power is credited at 35% of retail, so savings depend heavily on using power as it is generated.
- Lease: Pricing assumes the system owner claims the §48E credit and reflects part of it in your quote. The system must be placed in service by 2027-12-31 to qualify.
- Lease: Exported power is credited at 35% of retail, so savings depend heavily on using power as it is generated.
- PPA: Pricing assumes the system owner claims the §48E credit and reflects part of it in your quote. The system must be placed in service by 2027-12-31 to qualify.
- PPA: Exported power is credited at 35% of retail, so savings depend heavily on using power as it is generated.
Sunlight data: 921 kWh per installed kW per year (verified — NREL PVWatts v8). Retail rate: $0.282/kWh.
Why Alaska lands where it does
Across the 50 states we model, Alaska ranks #39 on the value of a cash purchase, at -$6,919 — behind Washington at -$5,218 and ahead ofGeorgia at -$8,175 . The ordering is not the one people expect, and the reason is worth stating plainly: sunshine matters less than the price of the electricity you stop buying.
Alaska gets 921 kWh per installed kW per year and pays $0.282 per kWh. That is modest sun and expensive power — and expensive power wins. A Alaska panel produces less than an Arizona one but each kWh it makes is worth roughly twice as much, which is why the northern, cloudier states dominate the top of the table.
The export rule is the main event here
Alaska credits exported electricity at 35% of retail. Exports are credited at the utility’s non-firm avoided cost, far below retail. On the reference system, about 5,508 kWh a year leaves the house rather than being used in it, and the gap between what that power is worth on your bill and what the utility pays for it costs $1,011 a year.
That single number is the difference between the answer on this page and the answer on a calculator that values every kWh at retail — which is what almost all of them do. It is also why self-consumption is the lever that matters most in Alaska: shifting load into daylight hours, or adding a battery, an EV or a heat pump, converts exported kWh worth $0.099 into avoided kWh worth $0.282.
What the state actually pays you
Alaska has no state solar tax credit and no net metering at retail; exports earn the utility's non-firm avoided cost. Alaska is the most extreme case we model: the second-highest electricity price of any state, and by a wide margin the least sunlight — 921 kWh per installed kW per year against 1,777 in New Mexico. Expensive power normally makes solar work; here there is not enough sun to collect it.
So there is no cash incentive to model. That matters more than it used to: while the 30% federal credit existed, a state with no programme of its own was still fine. Now, Alaska buyers are on their own entirely, and the whole case has to come from the bill savings.
The financing trap
A solar loan is worth -$17,690 here against -$6,919 for the same system bought outright — a gap of $10,771. The interest rate is not what causes that. A 20% dealer fee is embedded in the financed price, which is how a "1.99% APR" offer ends up costing more than a bank loan at 8%. It is rarely on the quote. Ask for it by name.
Lease and PPA look different from a purchase for a structural reason: the third-party owner still claims the 30% §48E credit, which a homeowner buying outright can no longer get. How much of that credit reaches you in the price is a negotiation, and we assume half. The owner also carries the upkeep and the inverter replacement that a buyer pays for. That is why a third-party option is competitive in Alaska in a way it would not have been in 2025. Both are tied to systems placed in service by December 31, 2027 — see the 2027 deadline.
Before you accept a Alaska quote
- Confirm it does not apply the expired 30% federal credit.
- Ask what export rate it assumed. Alaska credits exports at 35% of retail; if the quote valued every kWh at $0.282, its savings figure is overstated.
- Check the price per watt. Above about $2.25/W the purchase stops paying for itself in Alaska.
- Ask for the dealer fee on any financed offer, as a dollar amount.
- If it is a lease or PPA, ask for a placed-in-service commitment — §48E requires the system running by December 31, 2027.
More: the 2026 credit change, when solar is not worth it, our assumptions and sources.