Solar energy Costs and Payback

Solar energy is a good choice from an environmental standpoint. But is it cost-competitive? Which are the solar energy paybacks?

Payback & Climate & Prices & Other variables

There isn't a short answer to the question of solar competitiveness and solar paybacks.

If you live in a state like Florida, with short heating seasons and with good solar resources, you are in a privileged position... If you live in California and other states with important local incentives to renewables, you may also be in a better position.

And if you live in a moderate or hot climate you may also benefit of these climate conditions, because solar solutions are cheaper (solar hot water...) or demand a smaller area of solar panels (in the case of PV solutions): more complex solar water heating systems with pumps and antifreezing elements for colder climates may cost twice the price of simpler systems.

That is: climate and state incentives should be taken into account when assessing cost-competitiveness and solar paybacks.

Another element that should not be forgotten is the type of solar system you may want. Solar photovoltaics (electricity), solar water heating solutions or solar space heating are very different not only in their purposes but also in their paybacks...

For more detailed information on solar energy costs, see:
Solar Hot Water Prices
PV Solar Panels Prices
Solar incentives and grants

Solar energy Payback periods

Below, we list some very broad conclusions about solar paybacks and costs for different types os solar powered systems.

1
Solar hot water payback

The payback period for solar hot water solutions is short for the simpler designs. In very favorable cases (associated to favorable climate conditions) 3 or 4 years paybacks are possible. In colder climates the paybacks can double those numbers. Obviously, state incentives and an high consumption can make the payback even more advantageous.

2
Solar Upgrades payback

Solar upgrades to hot waters systems can have short payback periods, in some cases 3 or 4 years. And they may also benefit from solar incentives, that will make them yet more competitive.

But all depends on the upgrade. If the roof has to be strengthened to accommodate the solar panels, or if the upgrade requires large modifications on the existing system, then the payback period will be much longer. See Solar upgrade.

3
Solar PV paybacks

The solar payback for photovoltaic solutions is high. Prices are lowering and the solar electricity paybacks are improving, but only state rebates and tax credits can make this type of solar solution attractive enough. Experts expect solar photovoltaic to be cost-competitive by 2016 or so...

4
Solar space heating and solar air cooling paybacks

The payback of solar space heating and cooling solutions can be significantly larger than that of solar hot water systems.

See, to assess the cost of these systems and the different designs and questions they raise: Solar space heating and also Solar cooling.