Tuesday, September 10, 2024

# How Long Does Solar Take To Pay For Itself

## Myth #: Its Too Cold For Solar Panels In Canada To Work

How long did our off-grid solar system take to pay for itself?

This can easily be a subset of Myth #1 since it follows asimilar logic path. The biggest reasonthis is not true is that solar panelsoperate more efficiently in cold weather.

The cold weather actually increases the efficiency ofelectrical current transmission throughout all electrical devices by reducingthe resistance of the wiring.

For example a solar power system will operate at 29% betterthan its rating when it is -45oC according to Gordon Howell ofHowell-Mayhew Engineering. So coldweather is actually extremely beneficial for solar energy systems.

There are days when it is too cold for certain inverters to turn on but those days are few and far between. Most inverters have an operating temperaturerange of -40oC to +60oC so below or above these extremes will adversely affectenergy output. Here in Canada, -40 isfar more common than +60. This is not amajor issue though for similar reasons as cited in myth #1.

Since the solar irradiance in winter is much lower than summer,the rare event of an inverter not turning on does not adversely affect theoutput. Additionally, inverters are often housed inside and willnever be subject to such extreme temperatures.

Key Takeaway:Solar panels operate better in cold climates, so much so that engineers mustplan for cold weather generation.

## Figuring Out How Much You Could Save

Figuring out an estimate of how much you could save requires looking at your electricity usage. First, determine how many kWh each panel in your system can generate when there is full sun annually and then multiply that by how many panels are in the system.

This will show you how much solar energy can be generated.

The easiest way to determine how much you could save is by taking the electricity rates that utility companies charge per kWh and multiplying that by the amount of kWh the solar energy can generate.

This will give you an idea of how much electricity money is being saved annually.

Once you figure out the average amount of money you could be saving each year, it will help determine how long the solar payback period should last. One major advantage of solar energy is that the cost of electricity is rapidly rising in North America.

Each year people see higher electricity rates, especially when excess energy is being used. But, unfortunately, it doesnt take long for that bill to add up.

This is why so many homeowners are contacting their local solar company.

## Average Solar Panel Payback Period For Homes In The Us In 2021

Most homeowners in the United States can expect their solar panels to pay for themselves in between 9 and 12 years, depending on the state they live in.

Some states, like Hawaii and Massachusetts offer solar payback periods as short as five years, while payback time in states like Louisiana and North Dakota can stretch to 16 years or more.

The reason some states payback periods are worse than others isnt just because theyre less sunny. It mostly has to do mostly with the cost of electricity replaced by solar energy and the incentives available to help homeowners go solar. Other factors include roof composition and age, quality of equipment used, and whether you pay with cash or choose a solar loan.

To get an accurate estimate of solar panel cost, incentives, and payback for your home, use our state-of-the-art solar panel estimator. It shows you how panels will look on your actual roof, and by using solar production data from the National Renewable Energy Laboratory, will give you utility prices from the U.S. Energy Information Administration, as well as live cost information from installers all across the country.

Read Also: How To Use A Solar Battery Charger

## How Can Solar Panels Payback For Themselves

Solar panels can pay for themselves in 3 ways:

• Reducing your electricity bills: By installing a solar system, you will start generating your own electricity and thus you will no longer need to buy electricity for public utilities, which saves you around \$100 each month
• Net metering: Now as you become an energy producer, you can sell this electricity back to your public utilities during peak hours and save more money.
• Solar incentives, rebates, grants, and tax credit: Green energy is the trend nowadays and the government actually got your back with plenty of incentives and grants that will allow you to receive 22% of your solar system cost as federal tax credits.
• ## How Long Does It Take For Solar Panels To Pay Off

Now that you have the formula, you can easily answer this question yourself. In addition, here are some final things to bear in mind:

• State/employer incentives will also reduce years to payback.
• If you live in a sunnier state with great weather, youll have more hours of sun, therefore fewer years to payback.
• As electricity costs increase , your savings will increase, thus fewer years to payback. This formula doesnt account for this.
• Also, panel performance decreases over time by roughly 0.7%, causing the opposite effect.

Consider those sleepless nights banished!

Image Credit under CC License from Pixabay

Also Check: How Much Does Solar Panels Cost In Ghana

## Do You Offer A Guarantee Or Warranty For The Products And Services I Eventually Buy Through Your Suppliers

We are not responsible for the standard of work carried out by the suppliers that provide you with quotations as a result of your enquiry via our site. There is no warranty provided by us, implied or otherwise for the products or services provided by any suppliers that you contract with. Individual suppliers may offer their own warranties, but these and any standards of workmanship are not in any way associated with Leads 2 Trade Ltd. or its partners.

## How Else Can We Help

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You are not bound to enter into a contract with any supplier that provides a quotation to you and can unsubscribe from any communications related to your enquiry from them or us at any time.

If you have any questions, please email .

## Does Solar Really Pay For Itself

The most important thing to look at when figuring out how long it takes for solar panels to pay for themselves is how much longer are you going to be in the home for?

If you do not think you will be in the home for a decade then from purely a financial standpoint the panels are probably not worth purchasing. A lease or loan option may be better suited for you. No matter which way you choose you can only improve your current financial energy situation.

Solar panels do pay for themselves much faster then people tend to predict before they look into it further. If you do not live in a forest get a quote and make sure each of the above points is explained to you so you know exactly how the solar system pays itself back and for how long.

Wondering what solar options you have? Those Solar Guys will give you the most competitive quotes in your area from the most trusted installers. Click the get a quote button to get started!

## French President Says He’s Ready To Broker A Ceasefire Accuses Putin Of Duplicity

Does Solar PV pay for itself. Payback calculation on our 3.9kw array

From CNNs Xiaofei Xu in Paris

French President Emmanuel Macron is positioning himself as the mediator between Russia and Ukraine for a potential ceasefire agreement.

I think it is my responsibility, first of all, to take such initiatives when they are requested by Ukraine, and then, while condemning, while sanctioning, while continuing to decide and act, to leave this path open so that the day when the conditions can be met, we can obtain a cessation of hostilities for the Ukrainian people, Macron said a joint news conference Friday in Brussels after an emergency European Union summit.

Macron was the first major Western leader to speak with Russian President Vladimir Putin after Russian military actions began. They spoke before the summit but Macron admitted the phone call didnt achieve much, “since the Russian President has chosen war.

Macron also accused Putin of duplicity, saying he and other European leaders had been discussing “the details of the implementation of the Minsk agreements” with Putin just hours before the Russian President launched the operation, referring to the 2015 pact that established a shaky ceasefire in the region.

So yes, there was duplicity. Yes, there was a deliberate, conscious choice by President Putin to launch the war when we could still negotiate peace,” Macron said.

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## The Amount You Currently Spend On Electricity

Generally, the more that you spend on electricity currently, the more that you can save by adding solar panels to your home. This is because high electricity bills are usually tied to high levels of electricity consumption. And if you consume a lot of energy, your solar panels will be able to save you from having to pull all of that power from the grid, thereby reducing your costs.

## Solar Panels Payback Period

One of the benefits of choosing a renewable energy source such as solar panels to power your home is the prospect of making a profit from it. Not only is this seen in a reduction of your electricity bill because you are producing energy yourself, but you can also sell your excess production to a power company via the Feed in Tariff.

Deciding on what your return on investment will be for residential solar panels depends on a number of factors, not least what it costs you to set up and purchase it but also the quality and standard of the system components that are installed. Your roof size and the direction it faces will dictate the number of panels you can have placed there and the amount of energy you generate, as will the quality of in each panel.

Most solar panel installations should last between 20 and 25 years and over with the right maintenance, and the initial cost can normally be off-set within the first 12-18 years. There are many factors to conisder when looking at the payback period for solar panels.

Recommended Reading: Where To Open A Solo 401k

## Solar Incentives Rebates And The Federal Tax Credit

The great thing about installing solar panels is that it earns you a big tax break at the end of the first year. If your solar panels are fully connected and operating before January 1st, 2023, you can claim a tax credit equal to 26% of the total installation costs.

Many states offer additional solar incentives like solar rebates and performance-based incentives, as well.

Subtracting the dollar amount of available incentives from the total system cost gives you your net cost of solar panels.

#### Example 3:

Our friend in Bakersfield is in a great place for solar. In fact, California is so great that many early incentives that were needed to jumpstart the industry are no longer available.

For example, most rebates for home solar in California ended before 2014, but helped bring solar costs down for everyone by getting the industry going. But have no fear! The 26% solar tax credit still applies.

The 6-kW system in question would earn its owner a tax credit of \$4,446 based on our estimated upfront cost of \$17,100. That means the net cost of the system is just \$12,654. Thats the number well use to start subtracting energy bill savings from.

## Return On Investment For A 125 Kw Solar Panel Installation

Most solar panel installations, combined with the Feed in Tariff and energy savings will provide a reasonable return on investment. Obviously, the more energy your system produces and the more of that energy you directly use yourself, the better that investment is, even with the greater cost of installation.

A 1.25 kW solar panel installation is perhaps one of the smaller domestic ones you can get and will cost around £3,000. The Feed in Tariff will earn you roughly £20 a year and you may well save up to £70 on energy bills. With the export tariff included, your total investment return for a year will be approximately £80 to £120, ensuring that you pay off the initial cost within about 17 years at current prices.

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## The Cost Of The System

The average cost of a typical 5-kW solar system in the state of Nevada in 2019 is approximately \$11,500. When you take into account the benefit of the federal solar credit, the bottom line cost is around \$8,100, on average cost. Some systems will cost more or less depending on the size of the home.

Once you know the cost of your system, you can work out some calculations to estimate your payoff time. Keep in mind, paying off this figure also depends on the financial institute that you go through for your loan. There are some 0% interest loan options available, but if you do not qualify, you need to work the interest into your payment numbers.

## What Is A Payback Period For Residential Solar

For most homeowners in the U.S., it takes roughly eight years to break even on a solar panel investment. For example, if your solar installation cost is \$16,000 and the system helps you conserve \$2,000 annually on energy bills, then your payback period will be around eight years .

To put it a little differently, the solar payback period represents the time it will take for your utility savings to eclipse your initial investment cost. It is at this point that you might say the solar panel system has “paid for itself.”

Keep in mind that there are a number of basic determinants that go into calculating solar payback periods, including installation costs, interest rates if you’re taking out a solar loan, applicable tax credits and solar rebates, and energy bill savings. The latter is always going to be relative to the costs of electricity in your region, so areas that have higher utility costs tend to have slightly shorter payback periods.

Also Check: How Much To Add Battery To Solar

## Ukraine’s Deputy Interior Minister: Explosion Over Kyiv Caused By Ukrainian Air Defenses

From CNN’s Matthew Chance in Kyiv

Ukraine’s Deputy Interior Minister Yevhen Yenin has attributed an explosion early Friday over the capital, Kyiv, to a Ukrainian “anti-missile system shooting a missile out of the sky.”

CNN has not been able to independently verify this. Earlier Friday morning, CNN reporters on the ground in Kyiv reported hearing several loud blasts.

## What Is A Good Solar Panel Payback Period

DOES SOLAR POWER PAY FOR ITSELF? Was our OFF GRID DIY SOLAR POWER SYSTEM WORTH IT?

Ideally, a solar system should pay for itself within half of its lifespan. But, unfortunately, the average lifespan of a solar system is 25 years.

However, there have been many upgrades and improvements to the materials over the years. Therefore, modern solar panel systems could last even longer than that.

A good solar panel payback period is anything shorter than 12 to 13 years. However, many homeowners who live in areas where the solar payback period could be longer than that may see value in installing solar panels because the cost of materials is declining.

Its a lot cheaper to install solar panels now than it was 15 years ago.

Read Also: How To File Taxes As A Sole Proprietor

## How Much Can Homeowners Save On Their Electricity Bills

The electricity costs are what really shortens the solar payback period. This is because the energy generated from solar panels allows people to cut back on their electricity usage.

Cutting costs every time the sun shines, the solar industry has helped people save a lot of money on their power bills.

Within 30 years, the average North American household with solar systems could save over \$17,000. Thats more than the average gross cost of installing a good quality solar PV.

Keep in mind, solar savings all depend on the size of your system and your location.

Every type of solar panel will be able to generate a certain amount of watts. Once you install solar PV, you may be able to figure out an estimate of how much you could save.

## What Is Considered A Good Solar Payback Period

More important than payback time is a concept called Internal Rate of Return, or IRR for short. IRR is expressed as a percentage of return on investment, and answers the question, Considering the estimated future benefits of this investment, what percentage return would you need to get from another investment to be equal to this one?

In the solar industry, we use IRR to compare the return on an investment in solar with the returns of other popular ways to invest.

For example, a long-term investment in a broad stock index fund has historically resulted in an IRR of about 8% per year. A home solar system in a state like Virginia, where the payback time of an investment in solar is around 12 years, has an IRR of about 8%.

The good news is, there are many states with better IRR and payback time than Virginia, especially in the northeast and California, where electricity costs are very high. For example, people in Massachusetts, New Jersey, California, and New York can expect IRRs of between 16 and 20 percentdouble or more of the average return of a long-term index fund.

##### See the solar payback period for your specific home

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## Why The Tesla Powerwall 2 Will Take 10+ Years To Pay Off

The average family uses under 20 kWh per day of electricity with maybe half of that being used at night. This means it would take a large family or someone with extremely high power consumption to fully use the 13.5 kWh the Powerwall holds every single night.

Plus people go away on holidays, spend nights at friends houses or use less electricity on some nights for one reason or another.

So lets assume usage of 10 kWh per night with 4 weeks away each year.

Under this more realistic case the Powerwall 2 would pay itself off in 14.35 years

The Powerwall 2 is only under warranty for 10 years, so it may never actuallypay for itself at all if it breaks after the 10 year period.

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