How the inexhaustible solar energy has been a boon to people looking for energy independence needs no explanation. India has become a hot-selling solar market due to modern-day technology, improving infrastructure, and rising awareness about the benefits of solar. Most people installing rooftop solar panels do so to gain financial benefits and contribute to a cleaner environment. Being aware of its full potential, they are interested in rooftop solar installation but usually get scared away by the enormous initial investment.
Though solar is a big purchase up front, it quickly pays for itself by saving enough energy over the life of its ownership. With a warranty of about 25 years, any energy your solar rooftop system generates beyond its initial payback period represents a profit on your investment.
Let's understand the concept of the payback period of a solar rooftop system and why is it financially feasible in India.
What is Payback Period for Solar Panel System?
The solar payback period is the time taken by the consumer to save enough to offset their solar panel costs. Like other investments, the solar payback period also determines the time in which you'll reach the break-even point on your investment. It is calculated based on the rooftop solar installation cost, net incentives, and the savings incurred by reduced electricity bills. Moreover, the payback period is not a fixed value. It can vary significantly from project to project, based on home features, location, state solar policies, solar panel system type and size, and the solar contractor.
Why is Solar Payback Period Important?
Purchasing a rooftop solar system is a big deal, and the high initial cost can turn consumers away from solar power. The expense makes it difficult for them to realise that this alternative energy source is the perfect solution to the energy crisis and will save them money in the long run. However, knowing the break-even point can help them understand the actual potential of solar panels, thereby helping them make the right decision.
Furthermore, after knowing how to calculate the solar ROI, they will feel comfortable committing to this green energy. Of course, solar panels are long-term investments that help you offset your electricity consumption cost. But that's not all. They come with other pluses, like the improved resale value of homes, reduced energy dependence on fossil fuels, freedom from the uncertain grid power supply, and increased financial gains from net metering.
How to Calculate Solar Payback Period?
For this, you need to determine the amount you pay for solar and the amount you save on your bills annually. The very first step requires you to ascertain the cost of the solar panel system. It is essential at this stage to consider all the solar incentives, tax credits, and rebates you can claim and whether you receive them upfront, in a year, or over a period. The next step is to define the amount you'll save with solar annually. Primarily, this amount is a function of the amount of electricity you use, the energy generated by your rooftop solar panels and the amount you pay for electricity.
Though calculating the solar payback period is no rocket science, if you choose not to do the math, you can always opt for a reliable solar service provider like MYSUN. They offer one of the best solar calculators in India that can do the entire calculation accurately on your behalf.
For most people, the reduced carbon footprint is a reason sufficient enough to go solar, but if that is not the case for you, realising the financial gains associated with the solar payback period will help you decide to go solar!
