Everyone’s talking about sustainability and alternate sources of energy these days, and with good reason. Resources on our planet are stretched to their limit, and many of our energy practises are slowly destroying the environment. However, there are plenty of small steps we can take to help reduce our impact on the environment, and having a solar system installed is a particularly significant step. In addition to it being a promising solution for combating climate change, going solar also offers economic benefits over the long term.
But how long will it take for you to see a return on your investment, you might well ask?
A number of factors play into this, so let’s look at each one in turn:
The initial cost
Covering the cost of the panels, the inverters, installation and any extra equipment, while the upfront cost of solar panel installation may be significant, there are government incentives available to home and business owners that can make it more affordable.
Energy production
How much energy is produced by a solar panel system has a direct impact on its payback period, and this can be affected by the size of the panels, their efficiency rating, where the panels are positioned, weather and several other variables.
And naturally, the less you spend on electricity once your panels are installed, will help you pay the system off quicker.
Location
If you live in a warm spot with wall-to-wall sunshine for a good part of the year, your panels should be able to produce plenty of energy to power your home or business, which can then be stored and used instead of relying on the grid.
Solar incentives and tax credits
Offering owners of solar systems a fantastic way to pay back the cost of their panels far faster, federal and local tax rebates and incentives can help to offset the cost of your initial investment and expedite your payback period. If your utility has signed up for net metering, this is another great way to save money and boost your ROI.
Financing options
To help you manage your payback period, you can choose from several different financing options, such as solar loans and leases, cash purchases or power purchase agreements (PPAs). There are of course, different financial implications attached to them all, and you’ll need to consider these when calculating your payback period.
System life and maintenance
If you purchase your solar panels from a trusted manufacturer, you can typically expect them to last for a number of decades, but at least 25 years. And, if you take good care of your solar system by keeping it clean and monitoring its performance, you can ensure you’re getting the most energy from the panels throughout their lifespan.
This long life expectancy offers financial benefits that go beyond your payback period, helping you enjoy long-term profits.
So, once you’ve factored in all of the conditions listed above, the average homeowner can expect their solar panels to pay for themselves in around 5 to 15 years. However, with technology continually advancing and the cost of solar panels falling exponentially, payback periods are estimated to decrease dramatically, meaning there has never been a better time than now to make the switch to renewable energy.
