Do Solar Panels Pay for Themselves in Ohio?
Installing solar panels is one of the best home upgrades you can make, not just because they save you money, but because they last so long that they’ll pay for themselves through those savings.
The amount of time it takes for that to happen is called the solar payback period. For most residential solar installations, the payback period ranges from about 7 to 10 years. But it’s different for everyone.
Here’s a more detailed breakdown of how it works and what kind of payback period you can expect when going solar in Ohio.
What Is a Solar Payback Period & How Does It Work?
Your solar payback period is the amount of time it takes for you to earn back your initial installation costs through electric bill savings. It helps you calculate your return on investment so you can decide whether the cost is worth it for you.
Here’s how it works:
Solar panels allow you to generate your own electricity.
As a result, you buy less (or nothing) from the electric grid, reducing your electric bill every month.
Over time, your savings add up to cover the cost of your installation.
After that, every dollar you save on electricity is money earned.
What’s a Good Payback Period for Solar Panels in Ohio?
A good payback period for solar panels is usually 12.5-15 years or less, which is about half the expected lifespan of your system. Since solar panels last 25-30 years and come with a 25-year warranty, this gives you over a decade to generate free power and profit from your investment after you break even.
But you could see a much faster payback period than that. We help our customers optimize their installations for the fastest payback period possible, and many homeowners break even in 10 years or less.
How to Calculate Your Solar Payback Period
To calculate your solar payback period, you only need two numbers: what your system will cost and how much you’re expected to save.
Step One: Determine Net Costs
Your net cost is the price of your installation minus any upfront rebates or incentives, including tax credits. This is the amount you’re aiming to “pay back” through the savings on your electricity bills.
Step Two: Estimate Annual Savings
Your annual savings will vary depending on several factors, including how much you currently spend on electricity.
Step Three: Divide
Once you have those numbers, divide the cost by the savings. The result is your estimated payback period.
Calculating these numbers on your own can take a lot of time and research. If you want a faster answer, reach out to Sustainergy Cooperative for a free assessment. We’ll give you a clear picture of your costs, savings, and expected payback period.
What Influences Your Payback Period?
Many factors influence your solar payback period, including:
1. System Size
A bigger system will cost more, increasing your installation costs. But it can also save you more.
We will match your system to your home’s electricity consumption so you can save as much as possible with the smallest system possible.
If you want to take things a step further, consider our Smart Solar approach. We’ll help you reduce your energy consumption through efficiency upgrades first, so you can install a smaller, more affordable solar panel system with a faster payback period.
2. Incentives
Incentives like the 30% solar tax credit significantly reduce your net costs so you can break even faster.
But to take advantage, you need to act fast. Congress is considering new legislation that would kill the solar tax credit at the end of this year. That deadline is coming up fast—start your installation today to get your project started before it’s too late.
3. Electricity Costs
The more you spend on electricity, the more you’ll save with solar and the faster your payback period. Like most states, Ohio has seen steep electricity rate increases recently, which makes solar an even more valuable investment.
4. Electricity Output
How much electricity your solar panels generate affects how much you save. Several factors affect output, including sunlight access and panel efficiency. We install high-efficiency panels in the most optimal location on your roof to maximize sunlight access and solar output.
Are Solar Panels Worth the Investment?
Solar panels are a smart investment for most Ohio homes. They protect you against rising energy costs and lock you into decades of free power after you break even.
