Payback time?

[bob-n]

How do you calculate the time required to recover your invested cost in PV?

I just got a quote for home rooftop PV without storage. The company said that they calculate between 7 and 9 years to pay back. I did the math myself with rosy assumptions and got >12 years.

My assumptions were:

• The PV system reduces my electric bill to just the standard base charge;
• The standard base charge doesn't change with netmetering; (*)
• No change in electric rates over time;
• No interest on my money if not invested in PV; (*)
• No change in homeowner's insurance cost; (*)
• No maintenance costs; and
• No REC payback (it's not offered where I live).

The items marked (*) seem like rosy assumptions. Today, banks are issuing 4% one-year CDs, but I didn't factor that in.

I found a website that shows nation-wide electric rates having gone up 2.5% per year over the past 25 years, but also predicts virtually flat electric rates for the future 25 years. I have no idea if the people behind these websites are reputable, but no one can predict the future. Also, "national" statistics don't represent my specific location.

https://www.statista.com/statistics/201714/growth-in-us-residential-electricity-prices-since-2000/

https://www.statista.com/statistics/630136/projection-of-electricity-prices-in-the-us/

Thank you for your thoughts.

[azdave]

One thing that could affect the ROI is the monthly connection fee (base charge). Around here, it will soon be going from $21 a month to $32 a month and affects everyone with a meter but is increasing at a higher percentage for those who have residential solar because "we don't pay out fair share" for grid maintenance.

[Mike 134]

Your calculations of +12 years are likely more accurate than the rosy picture the salesman paint. Conservatively speaking the money you spend on solar would have doubled if left in a S&P500 index fund in 9 years. Would you spend more than that on electric without the solar?