Solar panel system payback period

How long does solar payback last?

Payback periods vary significantly by state, depending on the availability of incentives, the cost of solar, and the cost of electricity. Remember: Solar payback periods will extend 43% longer—or up to 8 years—starting January 1, 2026, when the federal solar tax credit disappears.

How do I calculate my solar payback period?

To calculate your solar payback period, divide your combined costs by your annual savings. With tax credit: Combined costs ($18,552) ÷ annual savings ($2,613) = solar payback period (7.1 years) Without tax credit: Combined costs ($27,360) ÷ annual savings ($2,613) = solar payback period (10.5 years)

How long does it take to pay off solar panels?

The most common estimate of the average payback period for solar panels is six to ten years. This is a pretty wide range because there are many factors that will influence the number of years it can take to pay off your panels and the monthly savings you can expect.

Do you need a payback period for solar?

With a solar loan or a lease or PPA, you often don't need to provide any cash upfront. While you'll save less money in the long run by paying for solar with a loan or lease, assuming your monthly solar payments are less than what you currently pay for electricity, you won't have a payback period.