See how many years a solar system takes to pay for itself. Enter the system cost, size, your electricity price and how fast prices rise. You get the simple payback, the payback with price increases and the 25-year gain.
Estimate only. Real savings depend on your tariff, net metering rules, shade, dust, maintenance and any battery or inverter replacement. Prices rarely rise at a steady rate, so treat the escalation as a guess.
Formulas and assumptions
- Yearly energy (kWh): system kW times peak sun hours times efficiency times 365
- First-year saving: yearly energy times electricity price times the share you use or sell
- Simple payback: system cost divided by first-year saving
- Later years: energy falls by the yearly output loss, and the price rises by the yearly increase
- 25-year savings: the sum of every year, then the system cost is subtracted for the net gain
Example
A 5 kW system costing 1,800,000 with 5 sun hours and 75 percent efficiency makes about 6,844 kWh a year. At 45 per unit that saves 307,969 in year one, a simple payback of 5.8 years, or 5.3 years if prices rise 5 percent a year.
Frequently asked questions
How long is the payback for solar panels?
Many home systems pay back in 3 to 7 years where electricity is expensive and sunny. The exact time depends on cost, tariff and how much solar power you can use or sell.
Do solar panels lose output over time?
Yes, a little each year, usually around 0.5 percent. Good panels still deliver 80 to 90 percent after 25 years.
Does a battery change the payback?
A battery adds cost and usually lengthens the payback, but it can be worth it where the grid is unreliable and backup has real value.
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