How long will it take to payback/break even on my solar system?
The quintessential question of how long will it take to break even on the investment in a PV solar system varies, but it is typically in the range of 8-11 years for residential and 4-7 years for commercial.
Some of the variable factors affecting the payback are:
- A larger system costs less per kilowatt (kW) to install as compared to a smaller system, thus a larger system will payback faster.
- Multi-faced roofs add complexity and some cost to the solar installation project and often a reduce system production so they will take a little longer to payback.
- Specialty systems add cost and extend the payback time.
- A ground mounted system, while typically more efficient will cost more than a roof mounted system due to the need to build the structure to mount the solar panels to, so they will have a slightly longer payback period.
- Older homes or commercial properties with electrical systems that do not meet current code safety standards may add cost to the installation of a solar system as electrical systems may need upgrades.
- The biggest factor in determining the payback period is the price you pay for electricity you have to buy from the utility. The more expensive the price per kWh the faster your solar photovoltaic system will payback for you.
The best way to determine what the ROI (return on investment) will be is to have a reputable solar PV installer provide an accurate bid to build an appropriately sized system for your desired address and calculate your yearly savings from not buying “x” amount of kWh from your utility. Just remember the utility raises the cost of power every year.
