Solar Panel Break Even Time

Interpreting the solar nerd payback graph.

Solar panel break even time.

It is calculated by taking the total cost to install the system then subtracting solar incentives and or rebates and monthly electric bill savings until the total cost has been paid off. Solar panels are typically under warranty for 25 years so that s the standard figure used for the lifetime of a system although it s often much longer. Solar panels also may not make sense if you re not planning to stay in your home for very long as there s a break even period you ll need to get through before you reap the financial benefits of. Given that many solar panels and inverters come with 25 year product warranties you can expect more than two decades of trouble free operation from your solar array.

The graph above is a screenshot from the solar nerd calculator. To claim the credit you must file irs form 5695 as part of your tax return. On average solar panels can take anywhere from seven to eight years to break even. If you end up with a bigger credit than you have income tax due a 3 000 credit on a 2 500 tax bill for instance you can t use the credit to get money back from the irs.

This year most homeowners are paying between 2 87 and 3 85 per watt to install solar and the average gross cost of solar panels before tax credits is 16 800 says energysage s data. The tax break reduces. For people expecting to own their home for a long time calculating the lifetime savings after the break even point is where the gold is. An average sized residential solar system about 400 square feet of solar panels costs 18 000 according to the solar energy industries association an industry group.

Filing requirements for solar credits. If your break even point is reached within 5. Example of the break even graph from the solar nerd calculator. Solar panel payback period is the amount of time it ll take you to completely pay off your solar power system through savings on your electric bill.

However the savings after those seven to eight years can be quite significant.