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Understand your solar panel payback period

Last updated 1/16/2019



What is solar panel payback period?


Don't overpay for solar! Weigh your options and save.

How is the solar panel payback period calculated?

To calculate your solar panel payback period, you need to determine the combined costsand annual benefits of going solar. To understand each component, review the following information:

  • Gross cost of solar panel system: The net cost of installing solar on your home is dependent on the size of the system you select and the equipment that makes up that system.
  • Value of up-front financial incentives: Tax breaks and rebates can dramatically reduce the cost of going solar. The federal investment tax credit allows you to deduct 30% of the cost of your system from your taxes, and additional state and local financial incentives may also be available in your area.


Take the following steps to calculate your payback period:

Determine combined costs.


Determine annual benefits.


Divide your combined costs by your annual financial benefits.


How comparison-shopping can improve your solar panel payback period

Comparing quotes from multiple solar installers can actually help you go solar with a shorter payback period than the national average. Data from the EnergySage Solar Marketplace shows that, in 2019, solar shoppers who compare their options in the Marketplace can achieve payback on their solar investment in about 7.5 years – faster than the national average! Those solar shoppers will continue to enjoy free electricity for the life of their solar panel systems, which can last between 25 and 35 years.

By comparing multiple quotes and evaluating their respective payback periods, you can more easily understand the value of your solar investment and make the right choice for your home. Get an instant estimate or register your property to see how quickly it pays off to invest in solar.

Don't overpay for solar! Weigh your options and save.

Get competing solar quotes online. See solar prices near you.
