Solar panels: Are they really worth it? See calculation to see when they become worth it

So many websites are saying, “it’s time to go solar”, “you will save a lot of money”, but when will you actually save? I have done a quick calculation to explain to you when you start saving money with solar energy. I recommend you use your own numbers for a more accurate calculation because it will vary slightly in your situation depending on your monthly bill and how much it will cost to have a solar system installed on your home or cottage.

Here are the numbers and the math to show you when it becomes “worth it.”

1) My average (from the 2007 year) electric bill is $160/month

2) Cost from the estimator (Home Depot) to install a complete solar panel system is approximately $28,000.

(In addition, the manufacturer of the solar panels guarantee at least 90% efficiency of the panels throughout a 25 year warranty period.)

3) Calculation: $28,000/$160 = 175 months (the unit is months because the “$” cancel out) = 175 months/12 months = 14.6 years

In conclusion: At 14.6 years it doesn’t matter if I would be getting electricity from the grid or a solar panel, because the cost would be the same in either scenario at this point. After the 14.6 years is when the savings start because you will not have a monthly bill.

Conclusion: It takes only 14 years and about 6 months to “break-even” with your investment. If you would like a more accurate calculation (because it varies in everyone’s situation) just change the “$” values to your own in steps 1 and 2. After the break-even point, instead of putting money in the electrical companies pockets, you save it. In my case, that will be savings of 160x10.5x12 (monthly rate x amount of months remaining in warranty x 12 months in a year) which equates to $20,160. (Notice I only assumed I will be saving money during the period the panels are within warranty. They will most likely last longer).