How do you calculate the payback period of solar panels?

We'll explain how to calculate the payback period with an example. Let's say you choose a system with 10 solar panels for € 5139, including the installation. Your solar roof has 4250Wp and generates 3500kWh on average during the first year.

You can calculate what you'll save annually like this: multiply the annually generated power per kilowatt hour by the amount you pay your energy supplier. This is calculation is based on an average energy rate of € 0.34. For this example, you would save 3500kWh x € 0.34 = € 1190 per year. How quickly do you earn back your investment? Divide the price of the solar panels by the expected annual savings. For this example, that means € 5139 / € 1190 = 4.3. The payback period of this calculation example is 4 years about 4 months. Everything you generate after this, is a profit.

The example above is an estimate. The average payback period of solar panels is 5 to 7 years. How long the payback period is exactly, depends on the following:

• The total price of your solar roof
• Your power consumption and kilowatt hour rate
• The size of your solar roof and quality of the solar panels
• The performance warranty of the solar panels
• The number of sun hours and position of your roof
• The future of the net-metering regulation

In this quote, we'll include the payback period and will calculate it based on your situation. That way, you know when you'll start profiting from your solar panels. Request a quote so our advisors can assess your personal situation.