Break Even Time For Solar Panels

Take the following steps to calculate your payback period.

Break even time for solar panels.

To figure out payback period without the solar panel cost calculator we first calculate the true cost of installing solar after incentives have been claimed then we compare that against the cost of electricity from the utility company which tells us how long it takes to break even on the system. Each time the world s solar capacity doubled the energy required to make a pv module fell by about 12 the economist said while carbon dioxide emissions associated with the process dropped by 17 24. After your investment is paid off your solar panels will continue to generate clean electricity for free and will continue to do so for as long as your equipment lasts. Break even with a ppa lease is zero because you don t pay anything.

You just start saving right away similar to a third party electric company in a deregulated market he says. 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. If your break even point is reached within 5. Most solar panels are manufactured to withstand some pretty heavy beatings from the elements so its pretty unlikely that you would see a physically broken solar panel.

However if you live in a state with low electricity prices and few incentives you ll most likely break even faster with an outright purchase. To provide a general range hancock says most individuals who go solar will break even in 15 to 25 years. 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. Subtract the value of up front incentives and rebates from the gross cost of your solar panel system.

For people expecting to own their home for a long time calculating the lifetime savings after the break even point is where the gold is. The break even point when energy output equals manufacturing energy input has fallen from 20 years to just two years. Solar panels are designed to last at least 25 years and many modern brands will last much longer than that. Sum up your annual financial benefits including avoided electricity costs and any.

Given that many solar panels and inverters come with 25 year product warranties you can expect more than two decades of trouble free operation from your solar array.