There's a plethora of considerations. In terms of overall solar irradiation, the answer is clear: Arizona. It gets more sun than any other state. Regarding capacity already installed on residences, California has the most and New Jersey has the second most. Regarding the cost of electricity, solar makes the most sense in Hawaii, which has the nation's highest energy costs. But different states have very different incentives skewing the answer for which states truly offer homeowners the best return on their solar investment. But it's a rapidly-changing target since programs change, get fully subscribed, or new legislation or regulations are enacted. And as a state’s solar incentive program gets filled for a year or even multiple years-like California's, other state's incentive programs rise up on the list.
Luckily there are a number of organizations, such as SEIA, Nerd Wallet and Solar Power Rocks, that rank the best states for solar. These sites compiled the large quantities of data related to energy prices, solar incentives, solar policies (like renewable energy portfolios and carve-outs for solar), net-metering policies, solar renewable energy credits (SRECs), payback rates, state and local rebates, tax credits and other factors. Solar Power Rock's site offers a much more in-depth explanation of the reasoning behind their evaluations. But it made its rankings based on a host of factors. The most important factor for the homeowner though, is payback time or return on investment. The shorter the payback, the better for the homeowner. Therefore, in this particular ranking, the states with the shortest payback period and the highest energy prices top the list.
An important factor in going solar in any of these states is third-party ownership (TPO). In states that allow TPO arrangements, the impact of going solar is often nullified since a power-purchase agreement (PPA) or solar lease can allow a homeowner to go solar without having to fork out the $25,000 or more up-front for a 5 kilowatt array. In such states, TPO options are designed to be equal to or less than the amount homeowners are paying for electricity from their utility when their system starts producing solar power. They are also often designed to save homeowners more as electricity prices creep up in subsequent years. To find out whether TPOs are available in your area, contact local solar companies.
SEIA's Top 10 solar states 2017
|State||Installed MW of solar capacity||Power # of homes|