Key takeaways –
- Solar panels pay for themselves over time by saving you money on electricity bills, and in some cases, earning you money through ongoing incentive payments.
- Solar panel payback time averages between 5 and 15 years in the United States, depending on where you live.
- How quickly your solar panels pay back their cost depends on how much you paid, the price of electricity from your utility, and available upfront and ongoing incentives.
Contents
How long does it take to pay back solar panels?
Can Solar Panels Pay for Themselves? – 
Dusan Petkovic/Shutterstock.com So, again, can solar panels pay for themselves? Absolutely. If you live in specific states, you could quickly pay off an entire home solar panel system in under five years. Or, in other regions, spend upwards of 12+ years before the system pays for itself.
How long does it take to recoup your investment in solar?
Factors that affect your payback period –
Your installation costs : This one’s obvious: The less you spend, the faster you’ll see a return. Talking to multiple installers for estimates is key to installing a well-priced, high-quality installation, Incentives help lower your initial cost and see a faster return on investment. All homeowners are eligible for the federal tax credit, but many states offer additional incentives, either directly through state income tax credits or by requiring utilities to offer solar rebates. Your solar production : Solar panels in Arizona produce more electricity than in Oregon. The more electricity your panels produce, the faster you’ll recoup your money Your utility rates : Solar panels help you save money by avoiding purchasing all your electricity from the utility. If your utility charges higher rates, you’ll see a faster return on your solar investment, since you won’t be paying those high rates. Net metering : Your utility’s net metering regulations stipulate how it compensates you for any excess solar energy you produce, but don’t use in your home and therefore send to the grid to be used elsewhere. Some states require utilities to offer credits at full retail rates, while others only require utilities to offer credits at their ‘avoided costs’, which is typically about 1/3 of retail rates. Full retail-rate net metering is a basic building block of solar savings, as it allows you to stockpile your solar credits during the summer months when your solar installation is producing like mad, then pull from those account credits during the winter when your installation doesn’t produce as much.
How long does it take to break even on solar panels?
Solar Panel Payback Period (How Long To Recoup Costs?) 
Written by Josh Hurst Josh Hurst Writer and editor with more than a decade’s experience in journalism. Josh worked for Christianity Today for seven years, and has contributed to special assignments for Apple Music and iTunes. Josh lives in Knoxville, Tennessee with his wife, Kati, and two sons, Henry and Dylan. Updated as of October 25, 2022 
Why You Can Trust EcoWatch Founded in 2005 as an Ohio-based environmental newspaper, EcoWatch is a digital platform dedicated to publishing quality, science-based content on environmental issues, causes, and solutions. For most homeowners in the U.S., it takes roughly eight years to break even on a solar panel investment.
For example, if your cost is $16,000 and the system helps you conserve $2,000 annually on energy bills, then your payback period will be around eight years (16,000/2,000 = 8). To put it a little differently, the solar payback period represents the time it will take for your utility savings to eclipse your initial investment cost.
It is at this point that you might say the solar panel system has “paid for itself.” Keep in mind that there are a number of basic determinants that go into calculating solar payback periods, including installation costs, interest rates if you’re, applicable tax credits and solar rebates, and energy bill savings. 
Nationwide Service Pros
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
Cons
- Expensive
- Customer service varies by local dealer
SunPower designs and installs industry-leading residential solar and storage solutions across all 50 states. With a storied history of innovation dating back to 1985, no other company on this list can match SunPower’s experience and expertise. SunPower earns its position as the top national installer on our list for a handful of reasons: It installs the most efficient solar technology on the residential market, offers the most expansive service area and backs its installations with a warranty well above the industry standard.
- All the while, SunPower pioneers sustainability efforts within the industry.
- If that weren’t enough, SunPower systems come packaged with products all manufactured in-house by its sister company, Maxeon.
- This means that your panels, solar cells, inverters, battery and EV chargers are designed to work together and are all covered under the same warranty.
SunPower’s biggest downside? Its high-efficiency panels are considerably more expensive than most of its competitors’ products. However, its powerful panels are workhorses that make up for the initial cost with more backend production (think about this like spending more money for a car that gets more miles per gallon).
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Average Cost ($-$$$$$) |
| Solar Services |
| Brands of Solar Equipment Offered |
| 5 |
| A+ |
| $$$$ |
| Solar Panels, Solar Batteries, EV Chargers, System Monitoring |
| SunPower Panels |
img class=’aligncenter wp-image-189362 size-full’ src=’https://pvinasia.com/wp-content/uploads/2022/11/qubeshapeloxaxavae.png’ alt=’How Long Does It Take To Recoup Solar Panel Cost’ /> Regional Service Pros
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
Cons
Doesn’t offer solar batteries (coming 2022)
Why we chose Blue Raven Solar We like Blue Raven Solar because it understands that, for most homeowners, the cost of solar presents the biggest barrier to entry. For that reason, Blue Raven Solar developed an innovative solar financing plan that offers in-house, flexible, zero-money-down options.
- The results speak for themselves, as Blue Raven Solar is now one of the fastest-growing solar companies in the nation and was recently acquired by SunPower.
- Its BluePower Plus+ plan (exclusive to Blue Raven) mimics the flexible structure of a lease while still providing the greatest benefits of owning your system.
Eligible homeowners enjoy 18 months of solar power before having to pay their first bill. When coupled with the federal solar investment tax credit (ITC), the initial energy savings can offset more than a third of the overall cost of a system before requiring a dollar down.
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Average Cost ($-$$$$$) |
| Solar Services |
| 4.5 |
| A+ |
| $$ |
| Solar Panels, System Monitoring |
Regional Service Pros
- Industry-leading warranty coverage
- Expansive service area
Cons
- Some reported communication issues
- No leases or PPAs
ADT Solar sets the industry standard for warranty coverage by including a multifaceted guarantee, making it one of the top installers for homeowners who want added peace of mind. Its warranty coverage includes all of the following for 25 years:
- Power Production Guarantee: Also known as a performance guarantee, this ensures your solar system will produce the amount of electricity that’s outlined in your proposal, or ADT will write you a check for the difference.
- Labor Guarantee: This covers any issues with the installation of your system and is also known as a workmanship warranty.
- Panel Module Performance Guarantee: This is what ADT Solar refers to the manufacturer warranty as, and it ensures that any manufacturing defects are repaired or your ineffective panels replaced.
- Enphase Microinverters Guarantee: This backs the performance of your inverters.
Though in recent years other solar companies have started to offer similar guarantees, ADT Solar has been at it since 2008, performing over 30,000 installations across the country.
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Average Cost ($-$$$$$) |
| Solar Services |
| 4 |
| A- |
| $$$ |
| Solar Panels, Solar Batteries, EV Chargers, Energy-Efficiency Upgrades |
Though the average solar panel payback period is somewhere in the eight- to 12-year range, this can vary quite a bit from home to home. For some, it may be as little as five years. For others, it may be as long as 15 years. Local electricity costs and state-specific financial incentives, such as tax credits, solar rebates or programs, are determinative factors.
How long does it take to make money with solar panels?
What’s Considered a Good Payback Period for Solar Panels? – One way to determine whether you’re getting a good return on your solar energy investment is to look at the entire lifespan of your system. Most residential solar systems last between 25 and 30 years.
- If your payback period is eight years, you’ll be “making money” on the system for 17 to 23 years.
- Most solar industry experts say that if your solar panel payback period is less than half the life of your system, it’s a decent investment.
- Another thing to keep in mind is internal rate of return, or IRR.
Basically, think about what would happen if instead of investing in solar power, you placed your money into a more traditional financial investment. How well would that investment have to perform in order for it to be more financially advantageous than a solar system? Depending on your investment strategies, solar panel installations may or may not offer a higher ROI than purchasing stocks, real estate or other investments.
