What is the typical payback period for a solar energy system?

There are a few points to consider before making an estimate on a payback period for a solar energy system.

Each installation and customer’s energy needs are different, so it’s not usual to find two or more payback periods that are exactly the same.

Well known averages like those of some U.S states may be taken into consideration to help explain this question.

The state of California has an average payback period of about 9 years.

In another U.S state like New Jersey, it takes 7 years to get back the upfront investments.

Depending on the specific installation, your payback period may be higher or lower.

Another important point to take into consideration is that each geographic jurisdiction has different tax incentives and rebates for solar energy.

The incentives are great and can make a huge difference in the initial cost and therefore the payback time for a system. But each geographic jurisdiction’s incentives affects the payback period slightly differently by affecting the upfront cost from the system owner.

Another very important aspect to consider is the type of system installed.

Is it a grid tied solar energy system? If so, then it might obviously have a net metering component to it – which changes everything with regards to payback.

Plus another thing to consider is that solar panel costs and balance of system costs involved with solar energy system installations continue to drop on a daily basis, affecting upfront cost and payback.