How Long Until Solar Panels Pay for Themselves?
By far, the most common question we get asked by customers who are interested in solar panels is, “Will solar panels eventually pay for themselves?” Our answer is an astounding, “Yes!”
That takes us to the second most common question, “How long does it take to see a return on investment?” Because each solar panel installation is unique, that question is a little trickier to answer. However, we can provide a basic guide to how solar panel payback calculations work. Keep reading to learn more…
What is the solar panel payback period?
The solar panel payback period is the amount of time it’ll take you to completely pay off your solar power system through incentives, rebates, and savings on your electric bill until the total cost of the solar panel system has been covered.
Example of a solar payback period calculation: Your solar panel system costs $16,000 with an immediate $4,000 tax break, leaving the total cost after incentives $12,000. Then, assuming a $1,500 annual reduction of your electric bill, your payback period would be eight years (assuming electricity rates remain the same).
Most homeowners in the United States can expect their solar panels to pay for themselves between 9 and 12 years, depending on where they live. Fortunately for Florida residents, sunny states such as ours have a shorter payback period than most states!
Factors that Determine Your Payback Period
Five main factors that will influence your solar payback period…
Average electricity usage for your home. The amount of solar energy produced will largely be determined by the size of your solar panel system. In turn, this will determine the average electricity usage for your home and how much you ultimately spend a month on electric bills.
The total cost of the system. The total cost of the system is the final price of solar installation before calculating incentives and/or rebates.
Solar incentives and tax credits. Florida residents who install solar panels will reap the benefits of several state and local incentives and/or rebates as well as the federal tax credit.
Energy production from your solar system. Once you decide on the size of your solar panel system, you will be able to determine how much solar energy your system will produce over the course of a year.
The cost of your electricity. Owners of solar systems in Florida will also save money thanks to Florida Net Metering, one of the most important regulatory solar policies in the state of Florida. It works by monitoring the amount of electricity that your home uses by being on the grid. Since solar panels are creating solar energy, any unused energy supplied by your electric company will be sent back to the grid and you will receive a credit.
Interested in going solar? Call (813) 922-3735 to learn more about the energy-saving services offering by Solar Bear Tampa!