What Is the Return On Investment for Solar Power?

The return on investment for solar power depends on several factors. Learn how to calculate whether solar panels are a cost-effective choice for your residence in Riverside, CA, and when you can expect to see ROI.

Calculate the Energy Savings of Solar

You can determine whether solar power is cost-effective and estimate the cost of panel installation with three figures. You will need to know all of the following:

Monthly electricity usage

Peak sun hours

Panel power rating

The average California residence uses 532 kWh of electricity per month. You can estimate the number of panels you need by dividing your own monthly usage by peak sun hours. Average peak sunlight hours in California are 5.2 kilowatt hours per square meter. Multiply the result by 1000, then divide the product by panel power ratings.

Determine When You Should Recoup Costs

The average home in California needs eight solar panels, and the average installation costs are between $15,000 and $20,000. Qualification for state and federal subsidies and money saving on energy bills will determine payback time, or when a property owner will recoup the cost of investment. You can use a solar panel cost and savings tool to calculate ROI.

Weigh Potential Long-Term Energy Savings

Calculating specific energy needs can help the owner of a residential or commercial property determine whether installing solar power will be cost-effective. Structures that have low horizontal solar irradiance at peak sun hours and which consume a lot of electricity may not see as much ROI from solar power.

Investing in solar power pays off within five to 10 years and property owners keep saving money on electricity. Solar panels can last for 25 to 30 years or even longer. In other words, if you have a long-term plan to own a property that is well-situated for solar power in Riverside, CA, you should see a good ROI.