 Solar Trading Post
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The investment part of buying solar panels is for the panels to save you money in the long run.
This is a long term investment. The solar panels cost you a certain amount of money to install. They then make a certain amount of energy each year, saving you certain amount of dollars off your power bill.
And, so, after a number of years, the initial cost of the panel will be paid off in power bill savings. After this, the power your solar panels make comes to you in the form of pure profit. The years it takes to reach this 'break even' point is called the solar payback time.
Ideally, you want the solar payback time to be as short as possible.
For most solar panels, this break even point is several years in the future. On average, solar electric panels take between 10-15 years to break even. Solar hot water panels have 5-8 year payback time.
This is why it's important 'guarantee' your investment by getting solar panels that have a 20-25 year warranty.
The payback time can be measured in several ways. You can look at a simple money saved/cost of solar panels equation.
You could also take into account that electricity prices have been rising consistantly every year. This means that your solar panels will save you increasing amounts of money over their lifetime, effectively shortening the payback time.
Another factor to consider when calculating solar panel ROI is the added value to your house. Realtor studies have shown that solar panels add value to your house. This value is only realised on paper, or when you save your house. However, it is estimated at 15 x yearly solar savings.
This can become a considerable amount, and increases every year. By taking this into account, many solar panels can be seen to break even after a few short years.
For a step by step look at calculating Solar Panel ROI, you might try our Solar Calculator.
