09/19/2024
TL:DR: SOLAR HAS AN ESTIMATED AVERAGE PAYBACK OF BETWEEN 3.5 years and 16.6 years. Your power bill has a payback of NEVER EVER!
PSA: there are many untruths and exaggerated truths about solar out in the world. Some that say solar is the answer to everything and it's basically free. On the other side of the spectrum is that solar is a scam, doesn't save money, and is a financial albatross that you'll regret. So where does the truth lie?
As with most things, it's somewhere in the middle. We've spent many posts telling you why solar isn't free but how it can be a huge economic benefit to you. Here, let's talk about the other, more skeptical side of the spectrum that says solar is a scam.
MYTH: Solar doesn't actually save you money, the Sun only shines half the day!
GRID LLC: solar doesn't save EVERYONE money, but if you have good access to sun on your roof/ property, pay federal income taxes (for the tax credit incentive, most people do pay taxes!) and plan to be in your home for at least the next 5 years, we find that it's likely to save you thousands.
Net metering or batteries make it so that you can store extra energy produced during the day and use it at night, so, in fact you CAN run your house on solar energy at night.
MYTH: It's not worth it, you're payback time is way too far in the future to be worth it.
GRID: let's do simple math here: 40k for a solar system (that can be financed so you make payments that are similar to the amount your power bill will be reduced OR paid off up front so you immediately save huge on your monthly bills, but did have a large up front investment), 12k off through the federal ITC program through taxes paid (link to program below).
Ballpark 9k-12k more if you're in Illinois with the SREC program. *This leaves your "net" paid for the system at 19k in Illinois and 28k in Missouri (stick with me Missouri, you'll see it's still worth it all day). *This system will (assuming good sun etc), reduce an average monthly power bill by roughly $200 dollars. That's a savings to you if $2400/ year just on your power bill. 19k/2400≈8 years for break-even for Illinois and 28k/2400≈11.6 years for break-even for Missouri. Both of these numbers assume that your utility rates do not EVER go up again AND that the system adds NO VALUE to your home. **These are systems guaranteed for 25 years. At year 25, the solar panels we use have a guarantee that they're producing at LEAST 92% of what they were producing the day we installed them.
With all this said, let's do these same calculations on the ROI/ payback period for your never-ending, always-increasing, definitely-not-adding-equity power bill from the utility. Hmm, that's weird (said in a in highly sarcastic tone) the payback period keeps coming up as ♾️ (infinity) years in the future (AKA: NEVER).
No incentives at all? Solar STILL wins:
40k/2400≈ 16.6 years break-even. That's still over 8 years of the system being under warranty even if you got 0 incentives.
The ACTUAL estimated savings over the first 10 years of ownership (this time assuming 4% annual rate increase and 10k value added to the home which is based on NREL's estimates, link provided): 10 years of power bills that started at 200/ month and went up 4% per year and currently at 296/ month in year 10: $29158 (this is the stick with the utility program, boo).
Solar instead: 19k net- 10k added equity= 9k net. 9000/200≈3.75 years break-even. So there's your honest headline: solar pays itself off somewhere in between 3.75 and 16.6 years time. Either way, it's probably worth it to see where you are in that spectrum because even the WORST case scenario, has you saving thousands.
Www.gridsolarllc.com
https://www.nrel.gov/docs/fy08osti/42733.pdf
https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics
*to truly know the value of the energy a solar system produces, we must know what you're currently paying through your utility on a per/kwh basis. This can be determined by looking at your power bill (one of the reasons we always ask for that up front). In IL, $200 dollars may only get you 1000kwhs in a month whereas in missouri it may get you up to 1500kwhs. This can play a major factor in determining "break-even" since the calculation for break-even takes into account what you're currently paying.
**in general our installed systems use equipment that is warrantied through the manufacturer for at least 25 years with some exceptions depending on the system features selected by the customer.
GRID LLC, Solar Panels, Backup Batteries, Solar Pergolas and Solar Installation in Illinois and Missouri
