How long is the payback period for installing a home PV power plant?

· About Solar Panels

After experiencing the energy crisis in 2022, solar energy as clean and green has taken root in people's hearts. Installing a household PV system is an effective way to use solar power, however, the cost of the initial investment makes people hesitant. In fact, solar panels are a very worthwhile investment.

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What is the PV payback period?

The payback period of a PV investment is the time it takes for you to save as much on your electricity bill as you pay for your solar panel system. We think of it as a calculator that can help you determine how long it will take to break even on your initial solar power investment.
You can calculate your PV payback period starting with the total cost of installing solar panels, minus any incentives or subsidies you received. Then divide the remaining cost by the amount you save on your monthly electricity bill until you reach the amount you initially spent. Example.
€15,000 (cost of installing a household PV system) - €5,000 (subsidies or incentives received) = €10,000 investment cost

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Assuming that we can save €1250 per year (the PV system reduces energy costs by about €100 per month x 12 months), then €10,000 investment cost / €1250 annual energy cost savings = 8 years payback period for the PV investment
Of course, this calculation is only an estimate in the case of electricity costs will not rise, the PV system also requires maintenance and cleaning, and also did not choose to connect to the grid model, that the payback period of time will also be longer or shorter.
A well-designed PV plant will pay for itself in 7-9 years on average. When a company makes an offer, it usually gives the consumer a simulated payback period.

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There are three options for the mode of solar PV connection to the grid.
1. All self-generation (all electricity generated for own use), total revenue = local electricity price X all electricity generated + subsidy
2. Self-generation, surplus electricity online (priority for own use, excess electricity sold to the state), total revenue = self-generated electricity X local electricity price + online electricity X selling price + subsidies
3. All online (all the electricity generated is sold to the state), total revenue = selling price X all electricity generated
Home solar power generation generally chooses the second type, i.e., self-generation, surplus electricity online. You can install a battery to store electricity (link: check the article "PV power generation must be equipped with energy storage batteries"), or you can use the electricity from the national grid directly when you can't generate electricity at night. Also, you can check whether your country or region has PV subsidies, some countries have a per kWh subsidy or a one-time bonus, so you can calculate your cost of electricity.

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How do I choose a PV system for my home?

Maysun Solar offers a complete guide to buying a PV system, which can be found in our article by clicking on the button below.

These are two complete guides to buying solar panels, which will surely bring you closer to your PV panels and remove your doubts!
If you have any questions or want to buy high quality solar panels, don't hesitate to contact Maysun Solar.