Solar Panel Payback Years

How is the solar panel payback period calculated.

Solar panel payback years.

On the other hand plenty of americans pay 9 to 13 cents per kilowatt hour. The typical solar payback period in the u s. Those solar shoppers will continue to enjoy free electricity for the life of their solar panel systems which can last between 25 and 35 years. Years to payback investment cost solar panels annual savings provided you ve not already bought your panels all you need to do is two simple calculations.

A shorter payback period of 3 to 5 years is more common in parts of the country where utility electricity is higher like the north east and south west. In fact some solar panel systems installed decades ago are continuing to work after 30 and even 40 years. Does solar make financial sense for them. Is the segs system in california s mojave desert.

The average payback period for a residential solar system in 2020 is about seven years. Data from the energysage solar marketplace shows that in 2020 solar shoppers who compare their options in the marketplace can achieve payback on their solar investment in about 8 years. A grid tied system can pay for itself in around 3 to 6 years for diy projects and 5 to 9 years if you hire a contractor. If your cost of installing solar is 20 000 and your system is going to save you 2 500 a year on foregone energy bills your solar panel payback or break even point will be 8 years 20 000 2 500 8.

A payback period of seven years equates to a return on investment of approximately 14. Investment cost of your solar panels. The average solar system only takes around 7 5 years to pay back the initial investment according to energysage. However the average life of a solar system is around 30 years.

Is just above 8 years. The solar payback period refers to the amount of time it takes for the electric bill savings from your solar panels to equal the amount you paid for the system. Solar payback period is 9 000 1 296 6 9 years. The oldest solar panel system in the u s.

When considering that lifetime any payback period less than about half that time or 12 5 years can be considered decent more important than payback time is a concept called internal rate of return or irr for short. Solar panels are at their cheapest price since 2010 so even though they re still a large investment the solar panel payback time could be shorter than ever. Solar panels are designed to last at least 25 years and many modern brands will last much longer than that. However with the feed in tariff a government scheme that entitles those generating energy from solar panels to 20 years of payments having closed in march 2019 it could be easy to think that solar panels aren t worth the investment.

The chart goes out to the 25 year mark because that s the typical limit for solar equipment warranties but that doesn t mean your system will necessarily stop working then. Indeed many solar systems are still going strong after 30 years.