According to the SEIA, the USA will only reach 39% of the target set by President-elect Biden by 2032. With this in mind, it’s clear that we all need to do more when it comes to making the USA energy-independent as soon as we can.
Opting for solar installation is an expensive choice, but it’s vital to remember that you will get your money back in the long run. How long it takes to achieve this depends on several factors.
Keep reading to discover how you can calculate your solar panel payback period with our three-step solar payback calculator.
1. Calculating Solar Panel Costs
The average cost nationwide for solar panel installation is around $20,000. So, you’ll pay less in some places.
For instance, solar panel installation in Fort Collins costs around $17,000. Wherever you live, make sure you shop around to compare what’s on offer from every top solar installation company in your area.
You should also evaluate whether net metering or a PPA might work better for you.
Remember, the more electricity you use, the more solar panels you’ll need. A cloudy climate and a shady location can also impact your costs.
If your roof requires replacement soon, you’ll need to do this before you install solar panels, as this technology lasts for 20 years or more. A roof replacement will increase the payback period for your solar panels.
Are you taking a solar loan? Be sure to include interest charges in your final figure.
When you’ve arrived at a total for your installation, deduct the federal tax incentive for installing solar from this. Through the solar ITC, you can take 26% of the cost of your solar installation off your taxes.
2. Add Up Your Solar Savings
Both off-grid and grid-tied systems can save you money when you make the switch to solar power. With an off-grid system, you can kiss your electricity goodbye.
Solar PPAs and leases mean you’ll pay less per kilowatt-hour for electricity, and net-metering ensures a credit on your electricity bill for any grid power you use.
So, work out how much you spend on electricity per year or calculate the difference in charges per kilowatt-hour according to how much electricity you use annually.
Remember to include potential performance-based incentives (PBIs) and solar renewable energy credits (SRECs) on offer in your area.
3. Arriving At Your Solar Panel Payback Period
Finally, divide your total costs by your annual savings. That will give you an average payback time for your solar panels in years.
Usually, this is between 10 and 15 years. Remember, your solar panels will continue to provide electricity for up to 30 years, so your real savings will last a lot longer than your payback period.
You won’t need to pay for any maintenance to your solar panels throughout their lifespan, either.
Is It Worth Installing Solar Power?
Your solar panel payback period might seem like a very long time. Yet, it pays to remember that you’d be paying electricity bills all that time too, with nothing to show for it in the end.
With solar panels, you’ll end up with free electricity for years afterward and increase the value of your home, too.
Are you interested in the ways technology can save you money and enhance your life? Browse our blog for more.