Are Solar Panels Worth It in South Dakota? 2026 Cost & Payback
The average South Dakota residential electricity customer uses about 994 kWh a month and pays 14.15¢ per kWh — roughly $141 a month. Covering that takes a 7.7 kW system costing about $23,132, which pays for itself in about 17 yr 8 mo.
- Payback
- 17 yr 8 mo
- from switch-on
- System size
- 7.7 kW
- to cover annual use
- Up-front cost
- $23,132
- no federal credit available
- 25-yr net gain
- $12,190
- after paying it off
#46 of 51 states by payback period — worse than the national median of 13 yr 6 mo. Best is Maine at 7 yr 4 mo. See full rankings.
Price is the deciding factor here.
At the modelled installed price of $23,132, payback is 17 yr 8 mo. It reaches 10 years at about $12,086 installed — $11,046 below our baseline, or roughly 48% off.
Your 10-year target price: $12,086
Compare local solar quotes. We do not yet have a quote partner we are willing to send you to, so there is no button here. Take the target price above to two or three local installers and compare against it.
Worth doing only if the quotes come in under that number.
Solar payback calculator — South Dakota
Adjust any input to see how the payback period moves.
Pays for itself in
17 yr 8 mo
from switch-on
25-year net gain
$12,228
after paying it off
System size
7.7 kW
Up-front cost
$23,181
Year 1 savings
$1,107
Year 1 output
11,958 kWh
Federal residential clean-energy credit: 0% for new 2026 installations. The federal Residential Clean Energy Credit (IRC §25D) is not available for a system whose installation is completed after 31 December 2025. What counts is when installation is finished, not when you paid. Why.
The numbers behind it
| Average electricity rate | 14.15¢ / kWh |
|---|---|
| Peak sun hours per day | 5.24 hours |
| Annual yield per kW installed | 1,557 kWh |
| Average residential electricity use | 994 kWh / month |
| System size needed | 7.7 kW |
| Installed cost per watt | $3.02 |
| Gross system cost | $23,132 |
| Federal residential clean-energy credit | None (§25D unavailable for 2026 installations) |
| Net up-front cost | $23,132 |
| First-year output | 11,928 kWh |
| First-year savings | $1,105 |
| Solar export policy | No statewide policy |
| Value of exported power | 6¢ / kWh (~42% of retail) |
| Payback period | 17 yr 8 mo |
| 25-year net gain | $12,190 |
Price is the deciding factor here.
At the modelled installed price of $23,132, payback is 17 yr 8 mo. It reaches 10 years at about $12,086 installed — $11,046 below our baseline, or roughly 48% off.
Your 10-year target price: $12,086
Compare local solar quotes. We do not yet have a quote partner we are willing to send you to, so there is no button here. Take the target price above to two or three local installers and compare against it.
Worth doing only if the quotes come in under that number.
Net metering in South Dakota
South Dakota has no statewide export-compensation rule, so what you are paid for exports depends on your utility or retail plan. The figure here is a modelled baseline; your own plan is the number that counts.
Common questions
How much do solar panels cost in South Dakota?
At around $3.02 per watt installed, the 7.7 kW system a typical South Dakota home needs works out to roughly $23,132 before any incentives. The federal Residential Clean Energy Credit (IRC §25D) is not available for a system whose installation is completed after 31 December 2025. That makes it the net price too.
How long do solar panels take to pay for themselves in South Dakota?
About 17 yr 8 mo. That accounts for panel output falling roughly 0.5% a year and utility rates rising around 2.5% a year, which pull the answer in opposite directions.
Does South Dakota have net metering?
South Dakota has no statewide export-compensation rule, so what you are paid for exports depends on your utility or retail plan. The figure here is a modelled baseline; your own plan is the number that counts. Export compensation can vary by utility, tariff, installation date and customer class; this page uses the published 2026 baseline described in our methodology.
How much will I save over 25 years in South Dakota?
Roughly $12,190 after the system has paid for itself — about 53% return on the up-front cost. Savings are larger if electricity prices rise faster than 2.5% a year.
Is South Dakota sunny enough for solar?
South Dakota averages about 5.24 peak sun hours a day, and a well-oriented array there yields roughly 1,557 kWh per kW installed each year. Sunlight matters less than most people assume — electricity price is the bigger driver, which is why cloudy, expensive states often beat sunny, cheap ones.
How we calculate this
We model 25 years one year at a time rather than dividing cost by first-year savings. Panel output falls 0.5% each year and electricity prices rise 2.5% each year, so the payback figure reflects both.
Production uses the modelled AC yield for South Dakota rather than a flat efficiency factor. A peak-sun-hours approximation runs about 9% high, which is enough to make payback look a year faster than it is.
We assume 40% of generation is used in the home as it is produced, with the rest exported and credited according to the state's net metering rules.
Data vintage: Electricity: EIA Electric Power Monthly Table 5.6.B (residential, May 2026 YTD). Solar resource: PVGIS v5.3 (EU JRC), ERA5 2005-2023. Gasoline: AAA state averages. Natural gas: EIA residential by state. Heating degree days: NOAA CPC population-weighted normals. Residential consumption: EIA Electric Sales, Revenue, and Average Price Table 5.A, average monthly kWh per residential customer, 2024. Vehicle miles: FHWA Highway Statistics 2023. Retrieved 2026-08-03/04 and 2026-08-21. Install costs, net-metering status, time-of-use spreads and outage hours remain estimates.
How South Dakota compares
| # | State | Payback period |
|---|---|---|
| 1 | Maine | 7 yr 4 mo |
| 2 | Massachusetts | 7 yr 8 mo |
| 3 | New York | 7 yr 9 mo |
| 4 | Rhode Island | 7 yr 9 mo |
| 5 | New Hampshire | 8 yr 3 mo |
| 6 | New Jersey | 8 yr 11 mo |
| 7 | District of Columbia | 9 yr |
| 8 | Hawaii | 9 yr 4 mo |
| 9 | Pennsylvania | 9 yr 5 mo |
| 10 | Maryland | 9 yr 5 mo |
Computed from the same model as this page. Full national findings · how this is calculated · data sources