Solar payback refers to the amount of time it takes for your solar panel system to pay for itself through monthly utility bill savings. In other words, solar payback estimates how long it will take your solar panel investment to break even. Due to increased utility rates and advancements in solar panel technology and materials, solar payback that once took 10 – 15 years is now taking half as long to show a full return on investment.
Average Solar Payback Period
Currently, solar payback time periods in the United States are between six and eight years. Your personal solar payback period depends on a few factors including:
- The total cost of your solar panels
- The number of solar panels installed
- Your average monthly utility bill
- Your home’s peak sunlight hours
Calculating Your Solar Payback
To calculate your solar panel payback period, you need to divide the combined costs of your solar panel investment by the annual savings you are projected to receive from going solar.
For example, if your solar installation cost was $15,000 and your system is expected to save you $2,500 a year on utility costs, your solar payback period will be six years. Solar payback illustrates the fact that the money you spend on a solar panel system will eventually be spent on six years’ worth of electric bills. Therefore, it makes more sense to invest that money in solar power now instead of continuing to pay for energy that you could be generating yourself.
Post Solar Payback Savings
It’s important to note that once your solar payback period has ended, you will start saving money each month. Because your solar panel system will significantly reduce if not completely eliminate your electric bill, any savings provided by your solar system should be considered a financial gain.
Solar Energy Professionals
A family owned and operated business, Professional Electrical Services provides highly rated residential and commercial solar installation services. At PES, we strive to offer affordable solar energy options that can help reduce your carbon footprint and eliminate your costly reliance on utility companies. If you’re ready to start saving money by switching to solar, schedule your estimate today.