I've been searching for a good solar power payback calculator based on where a person lives for awhile now. While the U.S. does have a Federal incentive of a 30% tax credit for those who install solar, many states also offer incentives. Additionally, some utilities also offer incentives. This means that someone living in a state with very poor incentives, like Idaho, can have a much, much different return on investment than someone living in California or New Jersey (two of the top performing "return on solar investment" states).
The problem is that it is relatively hard to find out solar power payback information for three reasons that all depend on where you live:
- The amount of energy your panels produce (thus the amount of money they save on your utility bill) depends on your geography and how much solar insolation you receive
- The amount you pay in electricity (thus the amount of money your panels save you when they offset your usage) depends on your utility company, which varies by location
- The amount of incentives available to you by your state and/or utility varies by your state and utility.
Earlier this year I wrote a blog on finding out how much energy solar panels will produce based on where you live titled, "Calculating your Annual Solar Energy Output", which mentions the PVWatts tool by NREL. This is a great tool, but it only tells you how many kWh will be produced, not any financial payback information.
Thankfully I recently discovered the Clean Power Estimator by BP Solar that does provide financial payback and return on investment information and I am very impressed.
You have to enter in your zip code and the calculator really does all the rest. There are 4 main things you can manipulate:
- monthly electric bill
- annual energy bill escalation (determined by how fast your utility raises rates)
- solar system size
- cost per watt DC (this is how solar installers price systems. This usually includes panels, inverters, electrical equipment, and labor to install the panels)
You can also tell the tool how you want to pay for your panels: pay cash, home equity loan, non-tax deductible loan.
Based on the information you manipulate, the tool will run different simulations to help you figure out if solar is good for you. This a great resource if you want to learn more about actually installing solar on your home. Your solar installer will also help you with this information, but this will help get you a little more educated before you move on.