Solar payback period: How soon will it pay off?
Learn how to calculate your solar panel payback period, the metric that most solar shoppers rely on to understand the value of solar.
Solar panel payback time can range between 5 and 15 years in the United States, depending on where you live. How quickly your solar panels pay back their cost depends on how much you paid, the price of electricity from your utility, and available upfront and ongoing incentives. How is the payback period defined for solar panels?
If your roof has room for lots of panels that soak in the sun all day, you'll produce a ton of electricity and see a quicker payback. If you live on a shady lot, and your panels' production is more intermittent, you won't see a payback quite as quickly. This is a huge, but sometimes overlooked, factor in the solar payback period.
Effect on payback period: By maximizing the use of generated solar power, energy storage can shorten the payback period. Impact: Solar panels degrade over time, leading to reduced efficiency and power output. Benefit: High-quality panels degrade at a slower rate, maintaining better efficiency over the years.
The federal residential clean energy credit, for example, gives you up to 30% back. Your state might also have additional incentives. Those credits can lop off a significant chunk of the money you pay for solar panels, making your payback period shorter.
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