Solar Advice for Real Homeowners
When will home solar power really pay for itself? Your monthly electric bill will drop right away, but what about breaking even on solar installation costs? With some basic grade-school math it is not hard to make an informed estimate, but a quick search online will show you numbers ranging from 3 years to 15 years or more! Ready to get some targeted answers based on your real situation?
By our calculations, the average home solar installation pays for itself in 5 to 10 years. We can walk through the numbers together so that you get financial facts you can trust. Let’s look at how to figure out which end of the 5 to 10 year range you’ll fall into, plus how to monetize your home solar power for faster recoup and keep your maintenance costs low.
Solar Installation Costs vs Monthly Bills
The up-front cost of solar will be paid back over time as savings in your monthly costs. With a right sized home solar power system your energy bill will drop to almost nothing and can even hit absolute zero with net metering.
To figure out how many months it will take for your home solar power to pay for itself, take a look at your current annual electricity bill. Then check out our home solar cost calculator to get an instant estimate on what your installation might cost based on your region. Divide your likely installation cost by your current annual electricity costs and you’ll immediately get a ballpark look at how many years it will take to break even.
If you don’t have your annual electricity costs ready to hand, here are some average numbers to work with. Let’s look at a typical home in Hawaii. For a generously-sized system that produces 6kWh of power (slightly above the national average for a home system), your solar installation costs would likely be about $13,142 USD after tax credits. The average home electric bill in Hawaii was $2,018.52 per year ($168.21 per month) in 2019. [1]U.S. Energy Information Administration That means in 6.5 years, you’d reach the break even point where the solar installation costs are covered by energy bill savings. Congratulations: your solar upgrade has completely paid for itself.
A correctly done home solar installation can have a shelf life of more than 25 years. As the homeowner in this scenario, you could be looking at more than 18 years of cost-free solar electricity after you break even. That makes good financial sense.
How To Monetize Home Solar Power
To recoup your upfront solar installation costs even faster, you might be able to monetize your home solar power. Home solar can be its own passive income stream if you are able to certify and sell the rights to your power in an SREC marketplace. Look into selling SRECs as a way that your solar system can pay for itself faster. Some homeowners make thousands of dollars a year this way.
Solar Maintenance Costs
Once your solar panels are installed, they are about as low maintenance as any home system could be. You don’t even have to wash them.[2]UC San Diego What about larger maintenance issues? The majority of home solar power systems have warranties that cover them until long after installation costs are recouped. That means maintenance costs won’t stand in the way of recouping your investment. Of course, that assumes that in the course of your solar installation, you are able to get an adequate warranty for the equipment you’ve bought.
As a homeowner, make sure you know the basic industry standards before you accept a warranty deal from a solar installation pro. Some panels are only meant to last for about 10 years but others should be good for up to 35 years. Getting an appropriate warranty deal starts with knowing how long your panels should last. A smart first step is to learn about the shelf life of different solar panel types.