Does Solar Coupled With an EV Pay Back? Is It a Durable Way to Lower Your Utility Costs?

In the article on buying an old car, I stuck to combustion engines. This is the other half of the story: panels on the roof, an electric car in the driveway and a Tesla-style home battery on the garage wall. The question is simple. If the sun fuels both your house and your car, does the hardware pay for itself, and how long does it take?

I ran the solar and EV numbers for two very different places: sunny Arizona and cloudy Michigan. The answer surprised me a little in both directions.

Quick answer

Yes, solar paired with an electric car pays back, but slowly: about 12 years in Arizona and about 14 years in Michigan, with no federal tax credit. Charging the car from your own panels costs 2 to 4 cents a mile against 16 to 17 cents for gasoline. A Powerwall barely pays back on savings alone. Buy it for backup power, not for the return, and expect to replace it once. Even if you budget for a new car battery, driving on solar costs about half to two-thirds as much per mile as gasoline. If inflation pushes power prices up 50% over 10 years, solar pays back 3 to 4 years sooner than if prices stayed flat.

A word on hybrids

A regular hybrid, like a Prius or a hybrid RAV4, can’t plug in. It runs only on gasoline, so solar panels do nothing for it. A plug-in hybrid (PHEV) gets part of the benefit: every mile driven on its battery is a solar mile, and every mile on its engine is still a gasoline mile. The calculation below uses a full electric car, which shows the best case. For a plug-in hybrid, scale the fuel savings by the share of miles you drive on electricity.

The assumptions

I used published averages, so you can swap in your own numbers.

• Driving: 13,500 miles (21,700 km) a year, the US average per driver used by Edmunds and Energy Factbook.
• Gas car: 27 mpg, the real-world average for new cars cited by Energy Factbook. That is 500 gallons a year.
• Electric car: 3.3 miles per kWh, about 0.30 kWh per mile (Energy Factbook), plus about 10% charging loss. In Michigan I added another 10% for cold winters. That comes to 4,455 kWh a year in Arizona and 4,900 kWh in Michigan.
• Household use: Arizona homes average 1,075 kWh a month and Michigan homes 618 kWh, according to EIA data. Arizona’s number is high because of air conditioning.
• Electricity price: 15.38 cents per kWh in Arizona and 23.05 cents in Michigan, against a US average of 18.31 cents (EIA via Choose Energy).
• Gasoline: $4.58 a gallon in Arizona and $4.44 in Michigan (AAA, October 2026).
• Solar output: each kW of panels makes about 1,755 kWh a year in Phoenix (The Green Watt, from PVWatts data) and about 1,247 kWh in Detroit (Solar Cost Data).
• Solar price: $2.26 per watt in Arizona (EnergySage) and $2.91 per watt in Detroit (Solar Cost Data).
• Home battery: one Powerwall 3 with 13.5 kWh at about $15,000 installed, the typical figure reported by Solar.com.
• No federal tax credit: the 30% homeowner credit for solar ended after December 31, 2025 (Congressional Research Service). Leases and power-purchase agreements still get a business credit (Solar.com), but that benefit goes to the leasing company.
• Over time: electricity prices rise 3% a year and panels lose 0.5% of their output a year.

Selling power back is the catch

Net metering, where every kWh you sent to the grid offset one you bought, is gone for new customers in both states. Today a kWh you use yourself saves the full retail price. A kWh you export earns much less.

• Arizona (APS): new solar customers get 5.554 cents per kWh for exports, locked for 10 years, according to the APS tariff. That is about a third of the retail rate. SRP pays even less, about 3.45 cents (MySolarFY).
• Michigan (DTE): exports earn 8.709 cents per kWh off-peak and 14.407 cents on summer weekday afternoons, and DTE gives no credit for power a battery sends to the grid (EcoGen America).

So the more solar you use yourself, the faster it pays back. That is where the electric car helps: it is a big, flexible load that can soak up midday sunshine.

I assumed a household uses 40% of its own solar output directly when the car is charged in the evening, and 55% when the car is charged at midday. A Powerwall shifts another 3,600 kWh a year into the evening in Arizona and 3,000 kWh in Michigan, where winter sun is weak.

Solar and EV in a sunny state: Arizona

A 10 kW system (about 25 panels) makes about 17,550 kWh a year, enough to cover the house and the car on an annual basis. It costs about $22,600.

Setup	Yearly cost for power and fuel	Savings vs gas car + grid power
Gas car + grid power	$4,274	–
Electric car + grid power	$2,669	38%
Electric car + 10 kW solar	$1,005	76%
Electric car + solar, car charged at midday	$746	83%
Electric car + solar + Powerwall	$651	85%

• Switching to an electric car alone saves about $1,605 a year in fuel, even when charging from the grid.
• Solar saves another $1,665 a year. It pays back in 13.6 years at today’s prices, or about 12 years with 3% yearly price increases. Charge the car at midday and that drops to about 11 years.
• Solar plus Powerwall pays back in about 16 years. The battery adds only about $354 a year in savings on its own, which would take more than 40 years to cover its cost.
• Total: from a gas car on grid power to an electric car on solar with a battery, yearly costs fall by about $3,600.

Solar and EV in a northern state: Michigan

Michigan needs the same 10 kW system, because the panels make less power but the house uses less. It produces about 12,470 kWh a year and costs about $29,100.

Setup	Yearly cost for power and fuel	Savings vs gas car + grid power
Gas car + grid power	$3,929	–
Electric car + grid power	$2,839	28%
Electric car + 10 kW solar	$1,037	74%
Electric car + solar, car charged at midday	$769	80%
Electric car + solar + Powerwall	$607	85%

• Switching to an electric car alone saves about $1,091 a year. That’s less than in Arizona because Michigan electricity is expensive.
• Solar saves about $1,801 a year. It pays back in 16.2 years at today’s prices, or about 14 years with rising prices. Charging at midday brings it to about 13 years.
• Solar plus Powerwall pays back in about 17 years. The battery alone adds about $430 a year, a payback of about 35 years.
• Total: yearly costs fall by about $3,300 from gas car plus grid to electric car plus solar plus battery.

Here is the twist. Michigan gets 30% less sun, yet its payback is only about two years longer than Arizona’s. Expensive electricity and a better export credit make each solar kWh worth more there. Cheap power and a stingy export rate hold Arizona back.

What if the dollar loses value?

Many people expect the dollar to lose purchasing power over the coming years. If that happens, power and fuel get more expensive, but your solar system doesn’t. You pay for it once, in today’s dollars, and every kWh it makes after that is protected from inflation.

What prices did over the last 10 years

First, a reality check on how fast energy prices have actually moved:

Price	About 10 years ago	Now	Change
Electricity, Arizona	about 12.1¢ in 2016	15.3¢ in 2025	+26% (RateWatt, EIA data)
Electricity, Michigan	about 15.2¢ in 2016	20.0¢ in 2025	+32% (RateWatt, EIA data)
Electricity, US average	12.5¢ in 2014	16.5¢ in 2024	+32% (EnergySage, EIA data)
Gasoline, US average	$2.14 in 2016 (EIA)	$4.26 in October 2026 (AAA)	+99%
Diesel, US average	$2.30 in 2016	$5.07 in 2026 so far	+120% (World Oil Monitor, EIA data)

Electricity climbed slowly and steadily, roughly 3% a year, and closely tracked general inflation between 2013 and 2023 (EIA). Gasoline jumped around. 2016 was its cheapest year since 2004 (EIA), so the doubling partly reflects a low starting point: from the 2016 average to the 2025 average of $3.10, the rise was about 44% (EIA). Then the Hormuz crisis pushed the pump price up about $1.27 a gallon in a single year (EIA).

That difference matters for this article. Fuel from your own roof is priced once, when you buy the panels. Gasoline can double in a decade or jump 40% in a year. My calculations use today’s high gas prices, so if gasoline falls back toward $3, the electric car saves less. If the dollar keeps sliding, it saves more.

Solar payback at higher inflation

The table shows what happens if electricity prices rise steadily until they are 10% to 50% higher after 10 years, and then keep rising at the same pace. The base case above (3% a year) works out to about 34% over 10 years, so it sits between the +30% and +40% rows. The +75% and +100% rows cover a sharp fall in the dollar, or a decade like California’s last one, when home electricity prices rose 92% (World Power Monitor). “Gain after 25 years” is the total savings minus what you paid, in future dollars.

Price rise over 10 years	Arizona: solar payback	Arizona: gain after 25 years	Michigan: solar payback	Michigan: gain after 25 years
None (prices stay flat)	15 years	$16,600	17 years	$13,300
+10%	14 years	$21,400	16 years	$18,500
+20%	13 years	$26,400	15 years	$23,900
+30%	13 years	$31,700	15 years	$29,700
+40%	12 years	$37,400	14 years	$35,700
+50%	12 years	$43,300	13 years	$42,200
+75%	11 years	$59,400	13 years	$59,600
+100% (prices double)	10 years	$77,400	12 years	$79,100

With a Powerwall added:

Price rise over 10 years	Arizona: solar + Powerwall payback	Arizona: gain after 25 years	Michigan: solar + Powerwall payback	Michigan: gain after 25 years
None (prices stay flat)	20 years	$9,900	21 years	$8,500
+10%	18 years	$15,700	19 years	$14,800
+20%	17 years	$21,800	18 years	$21,600
+30%	16 years	$28,200	17 years	$28,700
+40%	16 years	$35,100	16 years	$36,300
+50%	15 years	$42,200	16 years	$44,200
+75%	14 years	$61,800	14 years	$65,800
+100% (prices double)	13 years	$83,700	14 years	$90,000

So yes, it pays back in every scenario, even if prices never rise at all. The more the dollar loses value, the faster it pays back and the bigger the gain. With 50% inflation, the gain after 25 years is roughly two and a half to three times what it is with flat prices. If prices double, solar pays back in 10 years in Arizona and 12 in Michigan.

Two caveats. First, the gains are in future dollars, which will buy less than today’s dollars. The point isn’t that you get rich. The point is that you’ve paid for 25 years of power in advance, at today’s prices. Second, the Powerwall rows don’t include a replacement battery yet. That changes the picture, as the section on batteries below shows.

The same logic applies to the car. A gas car’s fuel bill rises with every price spike, while an electric car charged from your own roof keeps costing the same few cents per mile.

The fuel bill, mile by mile

Spread the cost of the panels over 25 years of output, and solar power costs about 5.5 cents per kWh in Arizona and about 9.9 cents in Michigan. Here’s what that means per mile:

Cost per mile	Arizona	Michigan
Electric car on solar	1.8¢	3.6¢
Electric car on solar, plus a new car battery every 13 years (see below)	8.6¢	10.4¢
Electric car on grid power	5.1¢	8.4¢
Gas car at 27 mpg, fuel only	17.0¢	16.4¢

Driving on sunshine costs roughly a tenth of driving on gasoline in Arizona and about a fifth in Michigan. That cost is locked in when you buy the panels, so it doesn’t move with oil prices or a crisis in the Strait of Hormuz.

Is it durable?

The panels are the durable part. They have no moving parts, usually carry 25-year warranties and lose only a little output each year. After payback, you get another 10 to 13 years of nearly free power in this model, and more if the panels last 30 years.

The batteries are the weak link. There are two of them in this setup, the one on the garage wall and the one in the car, and neither lasts as long as the panels.

The Powerwall

Tesla’s Powerwall warranty runs 10 years and guarantees 70% of its 13.5 kWh capacity at the end. That is less than half the panels’ life, so over 25 years plan on buying a second one. And just like the modern cars in my old-car article, it depends on software: Tesla says the Powerwall 3 warranty may be cut to 4 years if it isn’t reliably connected to the internet for firmware updates.

Here is the solar-plus-Powerwall math again, now with a second Powerwall bought in year 13 at today’s price of $15,000:

Price rise over 10 years	Arizona: payback	Arizona: gain after 25 years	Michigan: payback	Michigan: gain after 25 years
None (prices stay flat)	never	−$5,100	never	−$6,500
+10%	25 years	$700	never	−$200
+20%	23 years	$6,800	23 years	$6,600
+30%	21 years	$13,200	22 years	$13,700
+40%	20 years	$20,100	20 years	$21,300
+50%	19 years	$27,200	19 years	$29,200
+75%	17 years	$46,800	18 years	$50,800
+100% (prices double)	16 years	$68,700	16 years	$75,000

With a replacement battery, solar plus Powerwall loses money over 25 years if prices stay flat. It only comes out clearly ahead if prices rise 20% or more over the next decade. Solar on its own, without the battery, pays back in every scenario.

The car battery

The car’s battery lasts longer than many people fear. Telematics company Geotab tracked 22,700 electric cars and found they lose about 2.3% of capacity a year, leaving about 81.6% after eight years (The Weekly Driver). Cars charged mostly at home on slower chargers wear about half as fast as cars that use fast chargers a lot, 1.5% a year against 3.0% (7Gen, citing Geotab). That is good news for a solar household, which charges slowly at home.

Replacements are rare. Recurrent, which follows more than 30,000 electric cars, found that about 8.5% of the earliest models, now more than 14 years old, have had a new battery, against 0.3% of cars built from 2022 on (Recurrent). Cars with more than 150,000 miles (240,000 km) that still have their original battery keep at least 83% of their range (NPR). Most carmakers warrant the battery for 8 years or 100,000 miles (160,000 km) (Recurrent).

Still, 25 years of driving at 13,500 miles a year is about 337,000 miles (543,000 km). Over that distance, you should expect at least one new battery or another car. A replacement out of warranty costs $5,000 to $20,000 or more, depending on the size of the battery (AAA).

So I took a cautious case: a $12,000 battery replacement every 13 years. That works out to about 6.8 cents a mile on top of the solar power, so driving on solar rises to 8.6 cents a mile in Arizona and 10.4 cents in Michigan, as shown in the cost-per-mile table above. Gasoline alone costs 17.0 and 16.4 cents.

Even if you budget for a new car battery, the solar car still costs about half as much per mile as gasoline in Arizona and about two-thirds as much in Michigan. Over 13 years, driving on solar instead of gasoline saves about $26,700 in Arizona and $22,500 in Michigan, roughly twice the price of a new battery. And the gas car has its own wear items, from oil changes to exhaust parts, that the electric car doesn’t have.

The same lesson applies as with old cars. Pick a model with a good battery record and a long warranty, and charge it gently at home.

Policy

The other risk is policy. Export rates are set by utilities and regulators, not by you. Arizona’s rate is locked for 10 years and then floats (APS). The more of your solar you use yourself, the less those rules can hurt you.

So why buy the battery?

On money alone, a Powerwall is a weak investment in both states, especially once you count the replacement. Its real value is that the lights, the fridge and the car charger keep working when the grid goes down. For a household planning to stay put through storms, heat waves and supply shocks, that is insurance, and insurance isn’t supposed to pay back. If you’re on a time-of-use plan with expensive evening rates, the battery earns more than my flat-rate model shows, so ask your installer to run your actual plan.

How to make it pay faster

1. Charge the car at midday. It’s the cheapest step: in this model it cut about a year off the payback in both states.
2. Size the system to your use, not your roof. Extra panels mostly earn the low export rate.
3. Get three quotes. Prices per watt vary widely between installers.
4. Check your exact utility. APS and SRP in Arizona pay very different export credits, and so do DTE and Consumers Energy in Michigan.
5. Run your own address through the free PVWatts calculator from the National Laboratory of the Rockies (formerly NREL) before you sign.

The bottom line

These are model numbers built on state averages. Your roof, your utility plan and how you drive will move them, but the pattern holds: solar pays back, an electric car makes it pay back faster, and a battery buys resilience rather than profit.

FAQ

Note: This article is a general cost model based on state averages and published prices as of October 2026. It is not financial, tax or engineering advice. Get quotes from licensed installers and check your own utility’s current rates and rules before you buy.