Solar Panel Break Even Point

This is called the break even point.

Solar panel break even point.

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. 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. 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. 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 tax break reduces. 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. The break even point when energy output equals manufacturing energy input has fallen from 20 years to just two years. Interpreting the solar nerd payback graph.

Example of the break even graph from the solar nerd calculator. An average sized residential solar system about 400 square feet of solar panels costs 18 000 according to the solar energy industries association an industry group. 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. If you plan to sell your house sometime soon the shorter the break even point the better.

Solar panels are typically under warranty for 25 years. On average solar panels can take anywhere from seven to eight years to break even. However the savings after those seven to eight years can be quite significant.