How Long Before You See an
ROI on Solar
How long before you see an ROI on Solar?
In recent years, people have become more environmentally conscious. Most want to reduce their carbon footprint and do their part to slow climate change. Solar energy harnesses the sun to create power. In addition, it can also help you save money on energy use. However, before making the huge leap towards having solar panels installed, you might be wondering how soon can you see a return on your solar system? The National Renewable Energy Laboratory (NREL) has found that the payback period in many areas is less than four years and in others might be around eight years.
The Financial Benefits of Going Solar
Nowadays, going solar is not just about going ‘green’ or doing the ‘right’ thing for the world. It is also about reaping the benefits of huge financial savings. As a homeowner, if you generate solar electricity then you can avoid paying increased electricity bills. In a report by Lawrence Berkeley National Laboratory, it was revealed that installing solar panels on your home even increases your property value.
Solar Panel Payback
Are you wondering how long it will take you to break even if you decide to invest in solar? Without a doubt, the increases being constantly rolled out by most utility electricity companies are making it very appealing for homeowners to explore solar to save money. Also, lower solar equipment costs are making it less expensive than it was years ago to have solar panels installed.
You should always get various quotes from solar installers so you have a firm knowledge of the financial merits that you will obtain with each option. However, how soon will your solar investment start to earn you money is probably the forefront figure in your mind. The complete payback period in the U.S. is a little over eight years.
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Determining Your Payback Period
Here is a breakdown of the components that are involved in determining your payback period.
- Gross cost of your solar panel system: This varies depending on the size of the system and the equipment used.
- Upfront financial incentives: Did you receive any tax breaks or rebates that helped lower the cost of your solar system? Federal, state, and local incentives all exist.
- Monthly electricity usage: How much electricity do you use every month? If your electricity bill is high, then your payback period is going to be reduced because your panels will be eliminating your energy bill or substantially reducing it.
- Electricity generation: There are many variables that impact how much electricity your solar panels will produce such as roof size, season, and weather. You’ll have to discover how much electricity you will generate.
- Additional incentives: Many electricity companies give you a per kilowatt-hour credit for the electricity your solar panels produce. This can be a monetary benefit.
As you can see, there are many things to consider when learning how long before you see a return on your solar system. However, rest assured, in time you will hit your payback period and your solar system will have paid for itself. At that point, you can kick back and genuinely enjoy the cost savings of going solar.
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