Solar power is a popular renewable energy source that can help reduce your reliance on traditional power sources and lower your electricity bills. However, investing in a solar power system can come with a high upfront cost. The solar power system payback time is the amount of time it takes for the energy savings generated by the system to cover the initial investment.
To calculate the solar power system payback time, you need to consider the total cost of the system and the energy savings generated over time. The system's total cost includes solar panels, inverters, batteries, installation, and other related costs. The energy savings generated by the system are calculated by estimating the amount of electricity it will generate over its lifetime and comparing it to the cost of purchasing the same amount of electricity from the grid.
The formula for calculating solar power system payback time is as follows:
Payback Time = Total Cost of Solar Power System / Annual Energy Savings
The total cost of the solar power system is divided by the annual energy savings to determine the number of years it will take to recoup the initial investment. For example, if the total cost of the solar power system is $20,000 and the estimated annual energy savings are $2,000, the payback time would be ten years.
It's important to note that the payback time for a solar power system will vary greatly depending on a variety of factors, such as the size and efficiency of the system, the quality of the system components, how much solar energy is self-consumed and not exported to the grid, the cost of electricity in your area, system type: grid connect, off grid, hybrid (solar with battery storage) and any available incentives like the solar rebate. In some cases, the payback time for a solar power system can be as short as a few years, while in others, it may take more than a decade to recoup the initial investment, especially if a battery is installed.
Despite the initial investment, a solar power system can provide significant long-term energy savings and environmental benefits. By understanding the solar power system payback time and how it's calculated, you can decide whether a solar power system is a worthwhile investment for your home or business.
The data in the tables below was generated using the SolarQuotes Solar Payback Calculator with the default values. For a more accurate estimate, click the button below and enter your specific details and location:
Listed in the tables below are average payback times for solar power systems installed in:
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $717 | 4.08 | $7,989 | $17,328 | 26.30% |
| 5kW | $5,000 | $893 | 5.42 | $9,743 | $20,247 | 19.28% |
| 6.6kW | $6,600 | $1,028 | 6.17 | $11,092 | $22,933 | 16.70% |
| 8kW | $8,000 | $1,173 | 6.58 | $12,560 | $25,365 | 15.39% |
| 10kW | $10,000 | $1,359 | 7.08 | $14,439 | $28,589 | 13.96% |
| 13kW | $13,000 | $1,617 | 7.75 | $17,012 | $33,432 | 12.53% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $1,102 | 10.67 | $12,540 | $28,326 | 9.85% |
| 5kW | $15,500 | $1,348 | 10.25 | $15,128 | $33,264 | 10.13% |
| 6.6kW | $17,100 | $1,486 | 10.33 | $16,511 | $36,028 | 9.93% |
| 8kW | $18,500 | $1,618 | 10.42 | $17,822 | $38,079 | 9.71% |
| 10kW | $20,500 | $1,797 | 10.42 | $19,617 | $41,100 | 9.46% |
| 13kW | $23,500 | $2,058 | 10.58 | $22,227 | $46,037 | 9.21% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $702 | 4.5 | $7,041 | $14,786 | 23.09% |
| 5kW | $5,000 | $963 | 5.67 | $9,099 | $18,233 | 17.66% |
| 6.6kW | $6,600 | $1,165 | 6.25 | $10,712 | $21,412 | 15.74% |
| 8kW | $8,000 | $1,348 | 6.67 | $12,097 | $23,476 | 14.35% |
| 10kW | $10,000 | $1,616 | 7.08 | $14,246 | $27,141 | 13.29% |
| 13kW | $13,000 | $1,991 | 7.58 | $17,198 | $32,624 | 12.21% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $995 | 12.83 | $10,786 | $23,894 | 8.17% |
| 5kW | $15,500 | $1,288 | 12.5 | $13,256 | $28,341 | 8.49% |
| 6.6kW | $17,100 | $1,486 | 12.25 | $14,811 | $31,379 | 8.49% |
| 8kW | $18,500 | $1,681 | 12.33 | $16,344 | $33,800 | 8.46% |
| 10kW | $20,500 | $1,942 | 12.42 | $18,401 | $37,246 | 8.41% |
| 13kW | $23,500 | $2,316 | 11 | $21,350 | $42,718 | 8.38% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $580 | 5 | $6,485 | $13,967 | 21.52% |
| 5kW | $5,000 | $724 | 6.58 | $7,928 | $16,283 | 15.67% |
| 6.6kW | $6,600 | $835 | 7.5 | $9,038 | $18,503 | 13.53% |
| 8kW | $8,000 | $945 | 8.08 | $10,150 | $20,180 | 12.25% |
| 10kW | $10,000 | $1,085 | 8.75 | $11,538 | $22,362 | 10.84% |
| 13kW | $13,000 | $1,305 | 9.5 | $13,763 | $26,588 | 9.79% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $844 | 14.08 | $9,625 | $21,596 | 7.29% |
| 5kW | $15,500 | $1,072 | 13.42 | $12,070 | $26,343 | 7.85% |
| 6.6kW | $17,100 | $1,202 | 13.33 | $13,399 | $29,096 | 7.83% |
| 8kW | $18,500 | $1,308 | 13.67 | $14,460 | $30,649 | 7.60% |
| 10kW | $20,500 | $1,455 | 13.92 | $15,945 | $33,065 | 7.37% |
| 13kW | $23,500 | $1,663 | 14.08 | $18,015 | $36,912 | 7.09% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $681 | 4.5 | $7,036 | $15,038 | 23.22% |
| 5kW | $5,000 | $1,004 | 5.25 | $9,946 | $20,679 | 19.64% |
| 6.6kW | $6,600 | $1,185 | 6 | $11,270 | $23,203 | 16.88% |
| 8kW | $8,000 | $1,361 | 6.42 | $12,587 | $25,186 | 15.30% |
| 10kW | $10,000 | $1,591 | 7.08 | $14,253 | $27,760 | 13.57% |
| 13kW | $13,000 | $1,941 | 7.75 | $16,868 | $32,530 | 12.18% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $959 | 12.83 | $10,796 | $24,296 | 8.35% |
| 5kW | $15,500 | $1,348 | 10.58 | $14,599 | $32,135 | 9.76% |
| 6.6kW | $17,100 | $1,586 | 10.25 | $16,702 | $36,581 | 10.08% |
| 8kW | $18,500 | $1,783 | 10.17 | $18,300 | $39,245 | 10.02% |
| 10kW | $20,500 | $2,017 | 10.25 | $20,009 | $41,931 | 9.66% |
| 13kW | $23,500 | $2,361 | 10.42 | $22,545 | $46,506 | 9.30% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $969 | 3.17 | $10,342 | $22,725 | 33.63% |
| 5kW | $5,000 | $1,223 | 4.25 | $12,344 | $26,064 | 24.28% |
| 6.6kW | $6,600 | $1,421 | 4.92 | $13,928 | $29,195 | 20.87% |
| 8kW | $8,000 | $1,609 | 5.33 | $15,403 | $31,492 | 18.87% |
| 10kW | $10,000 | $1,881 | 5.83 | $17,622 | $35,356 | 17.12% |
| 13kW | $13,000 | $2,248 | 6.42 | $20,538 | $40,797 | 15.25% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $1,435 | 8.58 | $16,166 | $36,787 | 12.76% |
| 5kW | $15,500 | $1,836 | 8 | $19,993 | $44,531 | 13.49% |
| 6.6kW | $17,100 | $2,029 | 8.17 | $21,531 | $47,551 | 13.10% |
| 8kW | $18,500 | $2,218 | 8.25 | $23,006 | $49,852 | 12.76% |
| 10kW | $20,500 | $2,474 | 8.33 | $25,035 | $53,251 | 12.35% |
| 13kW | $23,500 | $2,836 | 8.58 | $27,882 | $58,525 | 11.85% |
Note: In WA you can not get a Feed in Tariff on systems larger than 6.6 kW (5 kW inverter). So for these calculations the FiT is set to zero.
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $815 | 3.58 | $9,180 | $20,279 | 30.04% |
| 5kW | $5,000 | $950 | 5.08 | $10,519 | $22,367 | 20.90% |
| 6.6kW | $6,600 | $1,069 | 5.92 | $11,733 | $24,860 | 17.82% |
| 8kW | $8,000 | $719 | 9.75 | $8,238 | $17,314 | 10.39% |
| 10kW | $10,000 | $699 | 14.67 | $8,009 | $16,206 | 7.68% |
| 13kW | $13,000 | $706 | 17.42 | $8,096 | $16,123 | 5.50% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $1,332 | 9 | $15,270 | $34,937 | 12.13% |
| 5kW | $15,500 | $1,418 | 9.67 | $16,260 | $36,686 | 11.16% |
| 6.6kW | $17,100 | $1,418 | 10.5 | $16,260 | $36,686 | 10.10% |
| 8kW | $18,500 | $1,418 | 12.25 | $16,260 | $36,115 | 9.19% |
| 10kW | $20,500 | $1,418 | 13.5 | $16,260 | $35,545 | 8.10% |
| 13kW | $23,500 | $1,418 | 15 | $16,260 | $35,260 | 6.84% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $849 | 3.58 | $8,983 | $19,554 | 29.37% |
| 5kW | $5,000 | $1,128 | 4.67 | $11,229 | $23,429 | 22.08% |
| 6.6kW | $6,600 | $1,347 | 5.25 | $12,979 | $26,875 | 19.40% |
| 8kW | $8,000 | $1,540 | 5.67 | $14,504 | $29,292 | 17.68% |
| 10kW | $10,000 | $1,805 | 6.17 | $16,555 | $32,686 | 15.93% |
| 13kW | $13,000 | $2,226 | 6.58 | $19,965 | $39,173 | 14.70% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $1,224 | 9.75 | $13,883 | $31,558 | 10.99% |
| 5kW | $15,500 | $1,581 | 9.17 | $17,109 | $37,803 | 11.51% |
| 6.6kW | $17,100 | $1,798 | 9.25 | $18,814 | $41,132 | 11.36% |
| 8kW | $18,500 | $1,991 | 9.25 | $20,334 | $43,529 | 11.15% |
| 10kW | $20,500 | $2,264 | 9.25 | $22,485 | $47,156 | 10.92% |
| 13kW | $23,500 | $2,671 | 9.25 | $25,695 | $53,140 | 10.73% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $3,000 | $756 | 4.08 | $7,667 | $16,345 | 25.23% |
| 5kW | $5,000 | $1,040 | 5.25 | $9,722 | $19,659 | 19.01% |
| 6.6kW | $6,600 | $1,269 | 5.83 | $11,419 | $22,923 | 16.90% |
| 8kW | $8,000 | $1,489 | 6.08 | $13,109 | $25,673 | 15.75% |
| 10kW | $10,000 | $1,764 | 6.67 | $15,027 | $28,650 | 14.14% |
| 13kW | $13,000 | $2,189 | 7.17 | $18,135 | $34,286 | 12.96% |
| System Size | System Cost | First Year's Savings | Payback Years | 10 Year Savings | 20 Year Savings | IRR |
|---|---|---|---|---|---|---|
| 3kW | $13,500 | $1,064 | 11.25 | $11,968 | $27,019 | 9.38% |
| 5kW | $15,500 | $1,354 | 10.92 | $14,092 | $30,502 | 9.23% |
| 6.6kW | $17,100 | $1,580 | 10.83 | $15,749 | $33,665 | 9.21% |
| 8kW | $18,500 | $1,788 | 10.67 | $17,278 | $36,013 | 9.12% |
| 10kW | $20,500 | $2,077 | 10.58 | $19,399 | $39,494 | 9.03% |
| 13kW | $23,500 | $2,504 | 10.42 | $22,526 | $45,177 | 8.98% |
Is Solar Battery Storage Worth It?
As more and more households and businesses adopt solar power, the question of whether solar battery storage is worth the investment arises. The answer to this question largely depends on your energy usage patterns and specific circumstances, or even your ideology.
The primary reason for buying a solar battery is to store excess energy generated by your solar panels during the day for use at night when the sun isn't shining. If you use most of your energy during the day, the immediate cost savings from installing a solar battery may not justify the expense. Research by AEMO suggests that it takes between 6 to 12 years for a standard solar PV battery system of 5 to 8 kWh to pay for itself. The warranty will have expired by this time, and performance may have also decreased.
Another factor to consider is the cost of solar batteries. While the price has decreased recently, hybrid inverters with corresponding lithium-ion batteries still range between $8,000 to $15,000. The payback period for these systems may exceed the standard 10-year warranty.
Solar battery storage may be a worthwhile investment if you use most of your energy at night, live in areas with frequent power outages, or where on-grid power is not viable. A solar battery can provide backup power during blackouts, increasing energy security and reducing reliance on a generator. Additionally, a solar battery may still provide cost savings despite the more extended payback period if you live in areas with high energy rates.
Solar battery storage can be worth the investment depending on your energy usage patterns and specific circumstances. If you're considering investing in a solar battery, it's essential to weigh the potential cost savings against the initial expense and evaluate your energy usage patterns to determine if a solar battery is a suitable choice for you.
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