What is the Return on Investment (ROI) or “payback” period for solar installations?
The true payback, when considering full cost accounting is the environmental benefit such as peak load offsets that you can only achieve with solar technologies. Financial payback is a relative concept to be calculated on a case-by-case basis. Some of the factors affecting payback are: cost of electricity prices being offset, cost of the system, exposure to the sun, size of the system, financing terms etc. There are some tools, such as RetScreen that can assist homeowners in predicting the production of a system and assist in determining payback. Rough estimations for a 1kW system on a home is between 15-25 years and solar thermal can be as short as 2 years for a pool heating system or 6 to 20 years for domestic hot water. The benefits of solar go beyond a financial payback and continue to payback as an environmental and home investment from the day they are installed.
