What Do I need to Know About the Long Island Solar Payback Period?
The solar payback period is the time that it takes to generate savings equal to the cost of your installation. The average solar payback period on Long Island ranges from 8 to 10 years when considering current pricing and tax credits.
Understanding the Payback Period for Your Solar Panel Installation
The most basic formula for calculating the solar panel payback period is System Cost ÷ Annual Savings.
However, there are other factors to consider in the system cost. Most homeowners on Long Island don’t pay the gross amount for their solar installations. When considering the New York State Tax Credit, which is worth up to $5,000, the real cost of installation is significantly lower.
This example shows an estimated payback period:
- Gross Solar Panel Installation Cost: $25,000
- NYS Tax Credit (Claimed Over a 5-Year Period): – $5000
- Net Cost: $20,000
- Annual Savings: $2,200 (Based on $183 per month in avoided PSEG LI bills).
- Payback Period: 09 Years.
In this example, the household saves over $2,000 per year on bills, and this pays for the solar installation within the first ten years. Solar panels last much longer, often 25 to 30 years. Any savings you generate after the payback period become pure profit.
Note that your solar panel installation on Long Island may cost more or less than the example provided. This is a generic example to illustrate how the payback period works. According to the latest data from Consumer Affairs, most Americans pay between $13,962 and $27,924 for solar panels. Your installation will be designed around your unique energy needs. Financing is available for solar panels, often with no down payment and an interest-free period.
Getting a Detailed Cost/Benefit Analysis from Power Solutions
Power Solutions is an A+ solar contractor serving Suffolk and Nassau Counties. One of the reasons that customers love our service is how transparent we are with our consultations.
We provide cost/benefit breakdowns based on several factors.
- We consider the historic and future energy needs of the household. We look at historic billing data and consider potential rate hikes.
- We calculate monthly savings based on the current utility rate and the size of the proposed solar panel array.
- We include any other features that could affect savings, like the addition of a battery energy storage system.
This makes our payback period estimates much more accurate than what you would get with the simple formula in the example above. If you want to know if solar is really worth it, you need to talk to a contractor who provides clear data and lets you make the choice.
Pro Tip: Long Island’s electricity rates are among the highest in the nation and continue to trend upward. Installing solar panels in Suffolk or Nassau County can protect you from inflation and “rate creep”. You estimated payback period could potentially get even better if the cost of electricity increases.
Begin Your Solar Consultation Today
You can get a free ballpark solar estimate online. We use satellite data for initial estimates. We will follow up with a detailed consultation, energy savings evaluation, and on-site assessment. We will design your solar panel system before providing a final cost/benefit analysis and quote.
Request your ballpark estimate now or reach out to us at (631) 348-0001 to begin your detailed solar consultation.
