When Do Solar Panels Pay for Themselves?

November 17, 2022

Solar panels on your rooftop can transform sunshine into energy, which can power your house more eco-friendly and cost-effectively than coal, the conventional energy source for power generation. Though the price of solar panel systems is progressively decreasing, and governments are also providing tax breaks and other cash benefits, the solar panel system is still an expensive investment. A typical roof-mounted installation costs around $26,000 and $30,000.

You don’t need to worry if you can’t pay the cash upfront to buy a system outright. Several zero-down payment financing options with low-interest rates can make the solar loan a reasonable option. 

Long ground mount solar installation on a property in the woods

Long ground mount solar installation on a property in the woods

You can now finance your solar system using solar panel loans and other installment loans for very little or zero. You can transfer what you were paying to your energy supplier to a regular monthly loan payment. If you have high power expenses, your monthly solar repayment installment might be less than your current electric bill. In short, You’ll create free sustainable power and save much money after the debt is paid off.

Sizes of Solar Panel Installations

The question “what are the available sizes of solar panels?” does not have a simple answer. Solar panel size or measurements, defined in length by breadth, will decide the number of panels your roof space can accommodate.  And the number of solar cells you can put in directly impacts the amount of power your solar system can create

Aside from the size of the panel, the size of the cells in each panel in case of power production or wattage (measured in Watts or W) can also be considered when determining how many panels are required to achieve specified energy-generating requirements for the home or commercial level.

There are a few things to think about:

We usually specify the length and breadth of the solar grids in meters or inches and express the maximum electricity production of the panel in watts (or ‘W’). The number of photovoltaic units that can fit onto a frame is directly proportional to its dimension, which dictates the amount of energy you can produce from absorbed solar energy. Solar panel measurements vary based on their application; for instance, panels suitable for commercial deployments are typically bigger than those employed in homes, owing to wider roof areas that may hold larger arrays. Let’s uncover each factor one by one.

Solar panels are built up of photovoltaic cells, which are visible in grids on the panels. These  Cells employ the photoelectric effect to transform solar energy straight into electricity. The higher number of solar cells a solar panel has, the more electricity it can produce. Solar is usually available in  156mm x 156mm dimensions. But they have improved over the past few years, resulting in bigger-sized solar grids.

Solar Panels For Homes:

Residential solar panels generally comprise 60 grids for 120 half-cut solar cells and provide approximately 250W and 400W power. These panels’ dimensions can be between 1.6 and 1.7 meters high and broad. Most household solar frames are 1.7m tall x 1.0m broad (or 1.7m2) and have a total energy output of roughly 330W.

Solar Panel With 72 Cells:

Solar panels also have 72 solar cells, which are bigger to cover more cells. They are roughly 30% bigger than household solar panels, measuring 2.1m tall x 1.1m wide (or 2.3m2). These 72-cell boards are mostly used for commercial PV frames on bigger roofs or solar farms. Regardless of the name, You can use commercial solar panels on the rooftops of small homes if they fit on the existing roof area. In some situations, the joist gap and the compact size of 60 cell boards allow you to pan additional cells onto a household roofing. Therefore, you typically find them on residential installations.

Panels With Half-Cells:

You may also encounter 120 half-cell panels (equal to 60 cells) or 144 half-cell boards that are almost equal to 72 cells in size. As you might expect, the photovoltaic cells in such half-cell panels have been split in half. It maintains the panel’s output but decreases the electrical resistance value within every cell, resulting in a solar cell performance boost. Therefore, it is now standard technology in most current solar panel types. They are the same dimensions and weight as their complete cell counterparts.

Location of Solar Panels:

When placing solar panels on your rooftop, the location of the panels is a critical factor. Solar panels are normally placed in a fixed position on your home’s roof and should face South, which catches the greatest sunshine.

Solar panels produce more power when they receive the maximum sunshine from the south. There is a distinction between “magnetic south” and “real south.” Solar panels should be oriented due south. A compass indicates the magnetic south or south pole. However, it is not accurate since the earth’s fluid metal outer core pulls the compass needle somewhat away from the true south. The location is critical since it also affects the cost-effectiveness of panels. For better output, consider abiding shades when placing panels.

Avoid Shades For Better Output:

As solar panels produce electricity from sunshine, it stands to reason that shadow reduces power output. Many individuals, however, are unaware of the impact of shadow on a line of solar panels. Even if only one solar cell is shadowed, the energy generated by its neighboring cells might be affected. It is due to its function as a resistor. So, don’t forget to factor in the location of your solar frame placement on your roof.

Payback Timeframe:

Most homes in the United States need around eight years to reach a breakeven point on their solar panel investment. Some jurisdictions, such as Massachusetts, have solar payback times of as little as five years, while others, such as Louisiana and Dakota, have repayment periods of 15 years or more. For example, if your solar installation costs $16,000 and the system saves you $2,000 per year on energy expenses, the payback time will be approximately eight years (16,000/2,000 = 8).

In other words, the solar payback period is the time it will take for your energy savings to exceed your upfront investment cost. At this point, one may conclude that the solar panel installation had “paid for itself.” Remember that several key considerations go into determining solar payback times, such as expenses, interest over cost, etc. So, if you are going to apply for a solar loan, available tax credits and solar subsidies and energy bills go down, helping you financially. The electricity bill is always proportional to your region’s power rates. Therefore places with greater utility bills have significantly quicker loan payback times.

How to Determine the Solar Payback Period:

Undoubtedly, calculating your precise solar panel payback time is difficult; receiving a quote from an installation will assist you in getting a reasonably realistic and well-informed approximation. Here’s how to go about it:

Calculate or obtain a price for the entire cost of your system. Consult with a local solar contractor to estimate the total initial cost for the required system. It will be determined by the size of the solar system, the quality of panels you are using and optional features such as solar battery storage.

Consider the federal tax credit as well as any relevant local refunds.  These financial benefits can significantly lower your solar panel installation costs. The federal tax credit, for instance, allows you to subtract 30% of the entire investment costs on your tax return. It is in addition to any provincial or city-specific benefits. Don’t overlook solar renewable energy credits (SRECs) obtained through net metering systems.

Consider any fees or additional charges when financing solar panels. If you have used a solar loan to pay after the installation, you must factor in all additional costs related to the private financing.

Calculate your typical yearly power use and prices to see how much money you’ll save by going solar. Solar contractors do their best to design a system that fits your power use. Still, there are many factors to consider, including usual maintenance charges and seasonal price shifts. Calculating how much you use on power each year might give you an accurate estimate of your significant gains after cutting down electricity expenses.

Take into consideration the rate of growth. Understand that local rates may rise over time when determining the cost of power. You might still phone your utility provider and inquire about anticipated rate hikes or check prior years’ invoices to identify recent rate changes.

Divide the system’s expense (including financial incentives) by the money you’ll save on power bills each year. It will give you an idea of how long it will take to return your upfront outlay. Aside from that, monthly usage of your solar system is a financial benefit. Hence, The easiest approach to determine your solar repayment period is to contact a solar company near you and obtain an estimate.

Panels are Paid; What Now?

A solar panel installation provides both short and long-term advantages and saves money. Besides, banks have structured solar loans starting with flexible and easy terms like monthly repayments and installments that are less than last month’s electricity bill. Hence, the homeowner with solar panels can save money even in the first month of installation.

Most financing now needs no cash down. Even after installation, the solar electricity generated enables people to zero out their electricity bill, which is one of the key motivations for starting immediately. So, during the first month, the solar home’s owner will pay nothing to the power provider and repay the finance business a sum lower than their current electricity bill.

Even In The First Month, The Difference Adds Money to Your Wallet.

The true benefit of solar arises from long-term use. After you have paid off the debt to the lender, you can pay it as soon as possible because most loans have no prepayment fees or interest. After that you will no longer need to cover your home’s monthly power bills or make monthly solar repayments.

As a result, the sooner you clear the loan, the less interest they will have to cover. Hence you will save all your money on electricity bills after paying off your debt. As a result, a solar loan may be cheaper than a solar lease since the customer can finish it off quickly and avoid paying a substantial amount of cash on the interest you may have had to face later on.

Rate Increase Protection

Solar also saves households money by protecting them from rising utility rates. As a result, as electricity prices rise, the benefits from solar energy multiply. As a result, it is difficult to anticipate what further solar will save for any house, but the owner may be confident that the savings will be significant. If SDGE’s latest revelation of a 28% rate increase in the future years is any indication, cumulative savings will be more than we can fathom.

Increase The Value Of Your Home

Many homeowners overlook the additional property value that solar may provide. According to recent research, installing solar may add an average of $20,000 to property prices. It can increase the home’s appeal to purchasers, particularly if the debt used to add the solar panels is repaid. Solar contracts can disturb the property buying process, and if the buyer tries to pay it off before the sale, it is frequently more costly since they must make the monthly payments they would’ve made for the full lease.

As you can see, there are several advantages to installing solar panels with solar financing. The option to exchange an electricity bill for monthly installments is appealing, as is the possibility of using the national solar tax credit. In the long run, the elimination of electricity costs and initial investment. Furthermore, the cumulative savings against electric rate increases make adopting solar panels with financing too good to pass up.


Solgen Power is a solar energy equipment company that sells and installs solar for homeowners. Solgen Power has been recognized by INC. 5000 as one of the fastest growing companies in the nation. Solgen Power has grown nationwide and continues to provide excellent customer service to homeowners.


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