One of the questions we often get asked is about the payback time for renewable energy solutions such as solar hot water heaters or solar power. This is an interesting question as unlike the alternatives such as a gas or electric water heater, or purchasing electricity from the grid, installing a solar system will reduce your energy bills and thus over time, it will pay for itself. A solar installation uses the sun’s energy which is free, unlike traditional fossil fuels like gas or oil.
The question is not an easy one though as the answer is “it depends”. How quickly you see a return on your investment is dependant on your particular circumstances.
Firstly, let’s look at solar water heating. Installing a solar water heater is a good solution to immediately reduce the cost of heating water for your home and/or business. Payback periods vary depending how you currently heat your water. The manufacturers of solar water heating systems estimate that a solar water heater can provide for 60% to 95% of a household’s hot water requirements and we have seen examples where a household’s energy bill has halved after the installation of a solar hot water heater. In general, the industry estimates that the return on investment for a solar hot water system is typically around 3 to 4 years. As the system has an expected lifespan, if correctly maintained, of 10 to 15 years or even longer, your solar hot water heater will deliver an excellent return on investment.
If we look at solar PV, or solar electricity, this is a higher up-front investment compared with solar water heating but conservatively, you can still expect a return on investment within 6 to 7 years. The system has an expected lifespan of 25 years or more so with typical savings of around €700 to €1000 in the first year, it can provide a better rate of return than keeping the money in the bank. To work out what your solar savings could be, you should look at how much electricity you use now, how much that costs you and how much electricity you are likely to use in the future.
Of course, no-one can predict the future so if you do find that you need to relocate sooner than expected you will still benefit from your investment as renewable energy solutions add value to a home’s sale price. It is estimated that a fully legal and authorized solar energy system can add about €12000 to the purchase price, if promoted in such a way that potential buyers fully understand the benefits the solar system delivers. We have recently met quite a few new homeowners who have said that one of the reasons for purchasing their new property was that it already had a solar water heater. A solar system can help influence a prospective purchaser to choose your property over another so your house sells quicker.
If you are looking at solar versus other energy options, the money spent on gas or electric bills is a cost with no return. With solar, you can take the money that you are already spending and turn it into an investment with great return factors. For more information on renewable energy solutions, please contact us at Free-Sol Solar email@example.com