Home Solar Payoff :: How Long Does it Take for Home Solar to Pay Off?
How long until solar panels pay off? The naysayers would have you believe it takes decades for a shred of return on an investment like solar energy.
But when you consider that home solar power immediately reduces your energy bills or even eliminates them altogether, as well as conserves the planet’s natural resources, the answer is simple: the solar payoff begins now.
Exploring Solar’s Costs
A more pragmatic answer is a bit trickier to explain. For an average-sized home, a system might cost $15,000 to $30,000 and take three to 10 years to recoup. However, various factors affect those numbers.
Exactly how much you save using solar power partially depends on where your home is located and how it’s situated. Panels on a southern-facing roof, for example, will operate more efficiently than those on a roof facing north.
But if the upfront costs still give you a mild panic attack, many companies allow you to lease rather than purchase a solar system. SunRun, for example, offers attractive solar leasing plans, some of which can reduce your upfront costs to zero.
Under a typical lease agreement, the solar provider purchases your system so you don’t have to. They then either install the system or arrange to have it installed. You then pay the provider for the electricity produced by the solar panels—at a lower rate than you would pay for conventional electricity.
For solar purchases, on the other hand, government incentives at the federal, state and local levels can be extremely generous depending on where you live. All 50 states qualify for the 30% tax credit off the cost of your system. Also check for state and utility rebates in your area.
In Oakland, California, solar costs have been reduced by a whopping 60% for residents. What’s more, many solar providers facilitate the process of obtaining government credits, often deducting the expected credits from the purchase price.
Personal and Planetary Incentives
The current 30-percent-off federal incentive program applies to solar systems on existing homes and new construction. (Set to expire at the end of 2016.) The Department of Energy’s Database of State Incentives for Renewables and Efficiency (DSIRE) maintains an interactive map for current options for homeowners. It provides up-to-date information about all the incentives in their area.
For many homeowners, a solar panel power system will produce more electricity than the home can consume. The solar customer is rewarded with the amazing experience of watching the electric meter spinning backwards. This excess power goes back into the conventional power grid, and the customer may even be paid for the power the home generates.
Not sure whether to lease or purchase? Contact a solar installation company. Because there are so many factors involved in your home’s suitability for solar, no one can give you a better answer than a licensed installer.
Brittany Mauriss is the editor & residential solar expert at CalFinder Solar. She also blogs for GreenMarketingTV, the green entrepreneur’s source for interviews with the industry’s top thinkers. To read more on Solar @ Building Moxie check out >> Inside the Pros Home :: Installing a Solar Thermal Hot Water Set Up.
Photo by OregonDOT via Flickr CC
8 thoughts on “Home Solar Payoff :: How Long Does it Take for Home Solar to Pay Off?”
Brittany, thanks for getting the word out on solar and clearly explaining the options available for leasing versus buying. Well, done!
Every so often the topic of switching over to solar comes up here on our property. Your info is helpful – might be time to bring it up again.
Something else that may affect ROI is your local electric company’s buy-back policy, that is if you are still connected to the grid.
The payoff for solar and other sustainable practices is twofold: you help the environment by reducing the use of fossil fuels and attendant CO2 emissions, and you save money both short- and long-term. Thanks for sharing
and thanks for hopping on Amanda. cheers. ~jb
Good article considering when it was written. Residential solar looks even better in 2014 now that prices effectively make solar cheaper than what millions of Americans are paying. Leasing your system from the large solar companies no longer makes financial sense. You’re much better off in the long run by getting your own funding (you have to pass a credit check whether you lease or self-finance).
thanks for your input Nick. cheers. ~jb @BuildingMoxie
If I believe this I’d buy solar; how about some detail and not just fluff?