How Many Years To Break Even On Solar Panels

For example if you spend 16 000 on a solar panel system then get a tax break of 4 000 the cost after incentives is 12 000.

How many years to break even on solar panels.

Increased utility electricity rates and lower equipment costs are making it easier and less expensive to for homeowners to own rather than lease their solar panel systems. Then if the solar energy your panels make reduces your electric bill by 1 500 per year your payback period would be eight years assuming electricity rates don t increase. If your break even point is reached within 5 years and you expect to save at least 2 000 a year for electricity assuming you purchased the system with cash then you benefit from around. The solar panel payback period is a calculation that estimates how long it will take for you to break even on your solar energy investment.

This year most homeowners are paying between 2 87 and 3 85 per watt to install solar and the average gross cost of solar panels before tax credits is 16 800 says energysage s data. Solar panels are typically under warranty for 25 years so that s the standard figure used for the lifetime of a system although it s often much longer. Interpreting the solar nerd payback graph. 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.