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Calculate Return on Investment for Solar Panels

Many people are now to help buy considering solar cells or photovoltaic system to reduce their home energy costs. Question I often hear is, When will I break even on my purchase or What is my return on investment provided it is actually quite easy to calculate return on investment for solar panel purchase that you some important information. Here is how the first thing you need to know how much system you are considering purchase will cost. to

Suppose that you system is the purchase, the installed cost $ 2,000. In this case, also break if you save $ 2000th The federal government allows homeowners tax credits for the purchase of solar panels to take, so you want to be by tax credit to reduce RECEIVED, provided your total cost of ownership, use it can.

Calculate Return on Investment for Solar Panels

Currently, for solar panels, homeowners are allowed to take tax credit of 30% of purchase price up to $2,000. In this example, system cost $2,000, 30% of $2,000 is $600, leaving $1,400 as new cost of system. Now, you need to save $1,400 on your electric bill before you will break even.

The next thing that you need to know is how much energy your solar panels will collect. You don’t want to know what it can collect, because that will probably not be same amount as what it actually will collect, based on location of your home, placement of panels, etc. Make sure that you ask distributor of panels that you are buying specific questions about this because having accurate number is key to your calculations.

Let’s say for calculation purposes, that, for your $2,000 you purchased 1 kW panel that will collect 5 kWh per day. number that you are interested in right now is how much energy your system will give you each day. Next, you’ll have to know how much you pay per kWh.

This number will be on your electric bill. In Hawaii, I pay about $0.45 or kWh. average around nation is much lower.

For this example, let’s pretend that you pay $0.10 per kWh. Now that you have all information you need, you are ready to calculate how long you’ll need to own your solar panels to break even. If you pay $0.10 per kWh and you collect 5 kWh of electricity day, you are saving $0.50 day – or approximately $15 month.

To figure out how long it will take to break even, use following formula Total Cost of System after Tax Incentives Divided by Total Savings per month, or $1400 or 15. result is that it will take 93.3 months to break even on your purchase. Divide this by 12 to see how many years it will take and you will see that it will take you 7.7 years to break even on your purchase.

Any energy that you produce after this is really return on your investment

We hope this information about “How to Calculate Return on Investment for Solar Panels” is really helpful to you as well as other information related to Solar_Energy

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How to Calculate Return on Investment for Solar Panels

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