Do Solar Panels Have a High Return On Investment?

Do Solar Panels Have A High Return On Investment_

Source: DesignMine

Buying solar panel energy systems should not be viewed by homeowners as purchasing everyday appliances, but as an investment for the future. As with any investment, homeowners want to know what their return on this investment will be. Believe it or not, there are a lot of factors that come into play when determining how much a homeowner can expect to recoup from a solar upgrade.

Is Solar Worth It?

Whether or not solar panels have a high ROI is one of the first questions that homeowners have when it comes to investing in solar energy systems. The short answer is yes. Believe it or not, studies show that solar energy systems offer a better ROI than a five-year CD account in nearly 90 percent of the United States. The only areas where it does not offer a better ROI are where sunshine is not as prominent, and so solar energy cannot be as easily harvested. The real question to consider when deciding if a solar energy system is worth the cost comes down to the area where the homeowner lives: How much sunlight does the homeowner receive during the year, and how much energy do they use per month?

Source: Thinkstock

Source: Thinkstock

Steps to Determining Solar ROI

1. Cost of the System: The first step is to determine how much it will cost to install the system. Many factors will affect this, including the cost of the installation, permits, and the PV panels. Homeowners should also take into account any money they will get back for solar tax credits or rebates. Most companies offer a free quote to help homeowners come up with a ballpark figure.

2. Energy Generated: Next, homeowners have to determine just how much energy the solar system is going to generate. This will help determine if it will completely cover the amount of energy the homeowners use in a month and if they will get a kick-back from the energy company for any extra electricity produced.

3. Electric Cost: Homeowners also need to know the average cost of their electricity. By knowing this, they are able to put a price on how much money they are saving per kilowatt-hour generated. The easiest way to do this is to check your most recent electricity bills.

4. Calculate the Benefits: With all of this information, homeowners should be able to calculate the financial benefits of installing the solar power system.

5. Calculate Return on Investment: With the financial benefit of the system known, homeowners can have an idea of calculating your return on investment. For example, if the system costs $18,000 and the yearly savings are $3,000, homeowners will see a return on their investment in six years.

Solar Placement

In determining how to get the most return on a solar panel system, it is very important for homeowners to consider where you’re going to place the solar panels. The panels need to be placed in areas that get the most sun. For example, if a house has a roof that faces south, this is usually a good choice. Homeowners should also consider how much shade a particular area gets. The more shade an area gets, the lower the return on investment will be. Last but not least, you need to consider the slope of the roof. If the roof is not sloped enough, the system might require tilted racks to get the maximum efficiency. If the roof is too sloped, it might require additional safety gear to hold the system in place. All of this will increase the overall cost of the system.


This country is moving in a conscientious direction and that means any initiative that makes our earth a healthier place is almost always a safe bet. As you read above, more often than not, solar panels make for a good financial decision as well.

More From Life Cheat Sheet: