Payback Period Formula:
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Definition: This calculator estimates how many years it will take for solar panel savings to equal the initial investment cost.
Purpose: It helps homeowners and businesses evaluate the financial viability of solar power systems.
The calculator uses the formula:
Where:
Explanation: The system cost is divided by annual savings (kWh produced × electricity rate) to determine payback period.
Details: Understanding payback period helps assess solar investment returns and compare with other financial options.
Tips: Enter total system cost, estimated annual production (kWh), and your electricity rate (default $0.12/kWh). All values must be > 0.
Q1: What's included in "System Cost"?
A: Include panels, inverters, installation, permits, and any additional equipment.
Q2: How do I estimate annual kWh production?
A: Most installers provide estimates, or use PVWatts calculator from NREL.
Q3: Should I include incentives?
A: Subtract tax credits/rebates from system cost for net cost calculation.
Q4: What's a good payback period?
A: Typically 5-10 years is considered good, as panels last 25+ years.
Q5: Does this include maintenance costs?
A: No, solar systems have minimal maintenance (typically 1% of cost/year).