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How to Figure Out Your Solar Panel Payback Period

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Solar panels for home systems are valuable investments that deliver excellent rates of return. A home solar energy system provides energy cost savings while paying for the panels, then free energy after the panels are paid off. Solar panels even increase your property values, according to the U.S. Department of Energy (DOE). To understand your solar panel cost/benefit ratio and when you can expect to see a net return on investment (ROI) for your solar panel system, you need to know the length of your “payback period.”

Average Solar Panel Payback Period

Your solar panel “payback period” is a key factor in determining which solar panel options fit your needs and budget best. The payback period is the length of time it will take to make back your investment in purchasing a solar energy system. Solar panel costs have dropped a lot year after year over the past decade, while electricity costs have continued to rise, hence the payback period to begin realizing ROI becomes shorter.

Compare the estimated payback period as part of your research while installing a solar energy system. Use this key information to help clarify the investment merits of the various systems you compare and how long it will take for each to make your solar energy investment begin earning money for you.

So, your solar payback period is the amount of time it will take to break even on the cost of your investment in your solar energy system. The usual payback period for residential solar in the United States is a little over 8 years. (An NREL report estimates payback in only 4 to 5 years.)

How To Calculate Your Solar Panel Payback Period

Multiple factors must be considered to achieve an accurate calculation of your solar energy system payback period. For a precise accounting, you’ll need to determine the total combined financial benefits and total combined costs of owning your solar equipment:

  • Purchase Cost of Solar Equipment: The gross cost of buying and installing your solar energy system is based on the size of the system you choose and all the components of the system.
  • Average Electricity Use Per Month: Your monthly electricity consumption determines the size of the solar energy system you need for your home and how much electricity you can stop buying from your utility company each month. This means that higher electricity bills shorten your payback period because you can reduce (or possibly eliminate) that bill as soon as your solar panels start producing power for you.
  • Projected Electricity Production from Solar: Your solar energy system installer will identify the best system to accommodate your home electricity consumption. However, your roof size and changes in weather conditions throughout the year can affect the amount of solar power you can generate.
  • Solar Financial Incentives: Potential up-front cost savings include the federal Investment Tax Credit (ITC), state and local tax credits and/or rebates, and even incentives from your utility company. Combined, these benefits can reduce the cost of going solar by thousands of dollars. The ITC alone is currently *26% of the cost of your solar energy system. Plus, Solar Renewable Energy Certificates (SRECs) and utility company programs that grant credits per kilowatt-hour for solar energy generated by solar panels can total significant financial benefits.


*The ITC percentage will be incrementally reduced over the next three years to a permanent low of a 10% federal tax credit in 2024.

3 Steps to Calculate Your Solar Panel System Payback Period

  1. Calculate Combined Costs: Subtract the total combined value of all the tax credits, rebates, and other incentives you receive from the gross cost of buying and installing your solar energy system.
  2. Calculate Combined Benefits: Add your yearly total of financial benefits from your solar investment. Include electricity costs savings, plus any new incentives or other financial benefits received due to your solar energy investment.
  3. Calculate Net ROI: First, divide your combined upfront costs of acquiring your solar panel system investment by the combined upfront and monthly financial benefits of having your system working for you. Next, divide the net outcome by the total number of years it will take for you to pay off the system or to realize a total of energy savings and incentives that have exceeded the total cost of owning the system — even including any payments remaining to pay off the system. This is the payback point. Each month beyond that point, your savings of electricity costs are all full financial benefits.

3 Key Tips For Solar Panel Shopping

Getting Multiple Solar Quotes Can Save You a Lot of Money

Comparing is the best approach to avoid paying higher solar panel costs than necessary to installers with inflated prices. Do your research thoroughly to identify the best providers in your area. The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) advises consumers to compare options for solar panels for home installation for possible savings. 

Include All Your Solar Equipment in Your Cost Comparison

Large solar panel companies may sometimes charge more but offer fewer solar equipment options. Gather as many bids as possible for your solar panel cost comparison. Some types of solar panels have higher efficiency ratings, while others cost less. Evaluate pricing and efficiency ratings on the various equipment and financing offers you receive. Then, determine which combination of competitive quality and cost achieves the right balance for your needs and budget.

The Largest Solar Installers Don’t Always Offer the Best Value

Throughout the industry, you can find solar panel installation contractors that offer more competitive prices and deliver higher value. It definitely pays to get multiple free estimates from well-established installers in your local area.

In fact, getting multiple quotes can save you thousands of dollars on your solar panel installation. Large solar panel companies with higher overhead may charge more than a smaller solar energy systems provider. Remember to check references for any solar installer you’re considering working with.

Why Go Solar?

  • Save money on monthly electricity bills.
  • Own your solar energy system with payments normally less than utility bills.
  • Earn a monthly return on your solar investment.
  • Get large tax credits, rebates, and other incentives that are still available.
  • Achieve energy independence and protection from utility rate hikes.
  • Increase your property value.
  • Live free from power outages due to public grid issues.
  • Help save the environment by reducing fossil fuel burning.

Contact Solarise Solar in Colorado for a Free Energy Analysis

Solarise Solar has helped many homeowners and businesses throughout Colorado get the region’s very best value for their investment in residential and commercial solar energy systems. Our solar energy experts will custom design the most efficient solar panel system to fit your energy needs and budget. We provide a 30-year warranty, to ensure your peace of mind throughout the expected life of your solar energy system.

We offer solar panel installation with zero down payment and low-interest financing, to make going solar very affordable. Our highly experienced installation specialists are committed to providing our customers with our industry’s highest standard of workmanship. Our System Monitoring makes it easy for you to monitor your system with the Solarise mobile and desktop apps, so you can track how much energy your system is producing for you in real-time!

Call Solarise Solar for more information or to schedule your free Energy Cost Analysis and estimate, with absolutely no obligation, or use our online contact form anytime.


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Solar Panels Installed by the Solar Installation Experts on the Roof of a House

Is This the Best Time To Go Solar, or Should I Wait?

In this blog, you will learn:

The cost of solar energy systems has been dropping over the past decade as the numbers of solar panel installations have been increasing throughout the country and the world. The Solar Energy Industries Association (SEIA) report (2020) indicates that solar panels for homes now are just 50% of the 2010 cost. With the equipment costs lowering so much over the years, homeowners who want to make the transition today may wonder if they should finally go solar now, or keep waiting to save even more.

The Right Time to Install Solar Panels

Suppose solar panel system prices continue to go down this year (2021) at rates similar to 2020. In that case, homeowners could expect to save around $150 by waiting another year to purchase solar equipment and an additional $150 off by waiting two years. However, at this point in the evolution of the solar market, those potential savings have become negligible, in contrast to the total amount to be gained financially by starting to produce your own electricity.

There are many cost considerations that factor into the total financial return from investing in solar panels over the period of the same 1 to 2 years. The effective loss of opportunity to take advantage of the available financial gains sooner is an effective cost of choosing the smaller savings on the price for solar panels later.

Opportunity Cost Incurred by Waiting

The average price of electricity for U.S. customers has escalated over recent years. At that rate, over the coming years, your energy bills may increase by another several percent per year. This means that for every year that you do not have the benefit of solar energy generation, you’re losing available savings. You are losing the opportunity to cut your utility costs by large amounts annually over the coming years.

Further, paying for electricity, even if the cost remains at the current utility rate, is likely to cost more than paying solar equipment payments. This means you’ll save even while you pay your solar equipment payments and pay the utility company for the portion of your electricity that you will continue to buy until your solar equipment is paid off.

Shrinking Incentives as Solar Use Grows

Incentive programs from states continue to be phased out as solar costs shrink due to increased solar adoption. The much anticipated Consolidated Appropriations Act (2016) extended the federal investment tax credit (ITC) for renewable energy equipment to 30% through 2019. The credit was then dropped to 26% for new construction in 2020, and down to 22% on new construction in 2023. The ITC is scheduled to settle permanently at 10% starting in 2024!

Various state and local programs can also be expected to shrink and ultimately disappear over the coming years, as so many already have done. Solar incentives differ between states. Find out about rebates and other programs in your state, for clarity on how delaying your solar installation can be expected to affect the amounts of any tax credits and rebates you can get now.

Expect SREC Programs to End

A Solar Renewable Energy Certificate (SREC), like some other incentive programs, pays you for the solar energy your system produces. SRECs are still being offered by some state governments and utility companies. But, these production-driven incentive programs, like so many other current incentives, will no longer be offered as solar adoption continues expanding across the U.S. and global markets.

If your state offers SRECs, and if you’re thinking about waiting to go solar, you should consider the lost value of the missed opportunity to generate income from your residential solar panels over future years.

Current Financing Options Ideal for Going Solar

Extraordinarily low-cost financing opportunities are still available at this point, making it exceptionally easy for homeowners and small businesses to have a complete solar energy system installed affordably. Many offer a $0 down payment. Some even offer $0 down and low finance charges. When determining whether waiting to see if purchase prices can fall even farther may make sense, be sure to include the lost opportunity cost of the likely lowest finance charges in the calculus.

When Is It Really Time to Go Solar?

Your “opportunity cost” is the cost of opting for savings on upfront purchase price instead of the greater financial gains to be had by investing earlier in energy independence with solar. It is recommended that you learn about your current solar options. Get an estimate of costs for solar panels to generate the amount of electricity that will substantially reduce your electricity bills — enough to offset the cost of your solar equipment payment.

Comparing the benefits of starting vs. waiting to go solar and advance toward full energy independence reveals clearly enough the greater advantages of reducing your use of the public power grid.

Advantages of Going Solar Now:

  • Start saving money on energy bills.
  • Stop renting power production and begin to own it for payments typically less than utility bills.
  • Take advantage of sizable tax credits that are reducing every year.
  • Get rebates and other incentives that are disappearing with each passing year.
  • Increase your property value. See the Department of Energy report.
  • Enjoy free electricity after your solar equipment is paid in full.
  • Make money from the utility company for the excess power you generate.
  • Be free from ongoing occasional utility rate increases.
  • Realize a return on your investment in solar.
  • Gain energy independence from the public grid and the utility company.
  • Help preserve the environment.
  • Stop using fossil fuels for your home energy needs.

Advantages of Waiting to Go Solar:

  • Potentially buy solar panels at $150 cheaper for each year you wait.

Call the Top Solar Panel Installation Company in Colorado Springs, Colorado

Solarise helps Colorado homeowners and businesses get the best solar panels, installation, and pricing. Our commercial and residential solar energy systems experts will customize a solar panel array and your complete solar energy production system to fit your needs and budget. We will help you go solar with no down payment and with low-interest financing.

Call Solarise Solar, Colorado Springs CO at (719) 792-7725, or fill out our online contact form, to schedule your FREE Energy Cost Analysis and estimate for your home or business.

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Solar Energy System Installed on a House

The Benefits of Owning a Solar Panel System vs. Paying Electric Bills

The future of energy production will be increasingly greener, and solar is the centerpiece of the green energy global transformation currently underway. Why? Solar energy is renewable, abundant, and producing it is becoming cheaper every year. People throughout the U.S. are moving to solar. Below are four essential reasons for switching from fossil fuel burning to a solar energy system for powering your home.

Why are Solar Panels Better than Electricity Bills?

A solar energy system offers a less costly home energy alternative for homeowners who want to reduce their utility bills and invest safely in home improvement. 

Here are the basic reasons why the popularity of residential solar panels have been growing at an increasing rate over recent years:

Solar Reduces Your Energy Costs

Are solar panels worth it? Imagine not paying the electric company large bills every month. The financial benefits of lower monthly costs for electricity are among the biggest motivations for people who choose to go solar. Typically, payments for a solar energy system are less than the utility bill, and that payment cannot go up as electric rates do. Then, your solar panel system gives you free power after they’re paid for in full. The financial benefits include:

●        You save significantly on electricity bills.

●        Ultimately, own your own free power production system.

●        Get solar rebates, tax credits, and other incentives.

●        Avoid rising utility costs due to inflation and rate increases.

●        You achieve energy independence.

The precise amount of cost savings you will realize by using solar panels depends on:

●        Amount of your electricity consumption

●        Total hours of daily sunlight at your latitude

●        Size of your solar energy system

●        Angle of your roof surface (unless you install ground mount panels)

●        Rates per kilowatt-hour (kWh) charged by your local electric company

●        Cost differential between buying or leasing your system

Solar Panels Increase Your Property Value

Solar panel installation is a major home improvement that significantly increases property values. At least one industry study suggests that it can raise the resale value of a home by a larger margin than a kitchen renovation.

Keep in mind that only purchased solar energy systems can increase the property value. Leased systems cannot have the same effect on a home’s sale value. Also, remember that certain market variables such as local electricity rates and the size and quality of the solar energy system on a home can be factors in the amount of home value increase.

Green Energy Helps Save the Environment

Stopping your dependence on fossil fuel burning to power your house helps preserve the planet’s ecosystem. When you go green with solar, every kWh of solar energy generated by your residential system reduces greenhouse gas emissions such asCO2 and other hazardous environmental pollutants, including nitrogen oxides, sulfur oxides, and airborne particulates, among others.

Solar Panels Work Anywhere in the U.S.

The United States has the potential to utilize a vast resource for solar energy. For perspective, a single hour of intense sunlight can meet much of the country’s electricity demand for an entire year. The majority of states have great untapped solar resources. Even homeowners living in Alaska can reduce energy costs through solar production.

To Buy Solar or Pay Electric Bills?

If you are paying an external provider to supply your home with power, the electric bills never stop coming, and you have no control over what you’ll pay in the future. Your electric company can continue to raise their rates. Owning your own solar power generating equipment allows you to live free from the risk of unexpected increases. That means you will receive a return on your investment after your system is paid off.

Enjoying the sense of financial freedom from the utility company and the peace of mind that comes with producing power for yourself is a more practical way to manage home energy needs. Plus, if you over-produce, you can receive credit from the utility company for producing power that they buy from you!

Why Choose Solarise?

Solarise Solar has been helping Colorado homeowners and businesses get the best possible value in their solar energy system investment since 2016. We customize your solar panel system for your property and your budget.

We can examine your recent electricity bill and determine how many solar panels are needed. We then add the cost of financing, if you choose to make payments. Important benefits that Solarise Solar offers our customers include:

●        Zero down payment. No cost up-front

●        Low-interest financing

●        The industry’s highest standard of workmanship

●        30-Year Warranty for peace of mind throughout the life of the system

●        The highest standards of professional customer service

●        Monitoring of your solar energy system with both desktop and mobile apps


Call Solarise Solar, Colorado Springs CO at (719) 716-8773,  for a FREE Energy Cost Analysis and estimate of panel totals, solar energy cost, financing, and other information.

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Reading Electric Bill with a Magnifying Glass

How To Read My Electricity Bill?

Reading an electric bill probably seems like a simple task. But, the correct way to process the information on these bills is not as obvious as many people assume. So, the majority of U.S. Americans may actually be making mistakes in reading electric bills and forming basic conclusions and energy cost savings strategies based on misinterpreted information in them. Below is information to help customers better understand how to read your bill from your electricity provider.

Five Keys to Reading Electric Bills Correctly

Understanding electricity bills means knowing how your bill represents your energy consumption and costs, and how those are being calculated by your utility company. Here are the 5 key information items you need to know:

Know How Your Usage Is Being Charged in Each Billing Cycle

First, examine the details of your billing setup, to be clear on exactly what you are being charged for your monthly electricity usage and how your bill for the amount you use is being proportioned on each bill. Which of these energy usage billing plans is in effect for your account?

  • Monthly Billing: Do you pay every month for the amount of electricity you used during the previous month? If you are being charged for your prior month’s usage, the bill you receive for each billing cycle will charge you for the amount of kilowatt-hours used in your house during the previous month. The number of kWh will be charged at the prevailing rate per kWh.
  • Budget Billing: Or, are you being charged on a budget billing arrangement? If you’re on a monthly budget billing plan, your utility company bases your monthly payment on the number of kilowatt-hours you consumed last year. From that total, the provider assumes that you’ll use around the same this year, and creates a monthly average for you to pay. This billing plan permits you to distribute the total annual cost of your electricity evenly over the 12 months so that your bill each month is consistent.

This arrangement can be helpful for budgeting, because it means you’ll know exactly how much you will be paying every month, regardless of changing seasons. Your amount of usage during some months increases, when air conditioning or your heating system must run 24/7. During those high-usage months, your bill can be less than your actual usage. On the other hand, in low usage months, you’ll be paying a bill amount that is higher than the amount of your electricity usage during that cycle.

Know Which Utility Type You’re Reading on Your Combined Bill

In some areas of the U.S., all or most of a household’s utilities are billed together on one monthly bill, generated through a single public billing system. The electricity bill may be bundled with those for gas, water, sewage, trash pickup, possibly recycling, and potentially other services. So, on combined utility bills from your municipality, be sure you are distinguishing between the usage amounts being billed for units of each type of resource consumed. The utility unit codes for primary resources include:

  • Electricity: Units of electricity are measured per kilowatt-hour (kWh).
  • Gas: Units of gas are measured per British Thermal Unit (BTU).
  • Water: Water usage is measured per gallon (gal).

Be Clear on All Charges That Add Up to Total Your Final Electricity Cost

The total amount you pay on your electricity bill is not just for the amount of power you use. In addition to the amount billed for energy used, multiple other charges are included in your electricity bill. There are added charges for paying workers and other utility company costs, and for helping the company maintain the public power grid. See the line items for charges such as delivery, supply, taxes, fees, etc., in your energy bill, to discover how much you pay in expenses for the power company.

In regions with multiple electricity suppliers, you may be able to switch to a provider that offers more competitive rates for your area.

Know the Number of Kilowatt-Hours Used in Your Home Each Month

Determining the number of kWh you have consumed in a billing month can be more complex than just dividing the total to be paid by the rate your electric company charges per unit of power. Some companies charge their customers based on a tiered billing structure. For example, each of the first few hundred kWh might be billed at the same price per kWh, but then you are billed at a different rate for the next several hundred kWh, and so on.

If your electric company does bill on a tiered rate structure, the number of kWh you use at each tier pricing level should appear on your bill. When you add together the total kWh billed at all the tier levels, that should be your total kWh used during the month.

Learning your actual energy use per kWh can help you pinpoint day-to-day issues of excess energy use in your home and help indicate solutions to reduce your utility cost. For ideal specificity, use a home energy monitor.

Correctly Calculate Your Total Monthly Electricity Use and Cost

Some electric companies show your daily use on your bill, whereas others show only the fluctuations in your monthly usage amounts through the year. Be sure you’re measuring your usage for the same period of time charged on the bill you’re examining. That is usually monthly unless you’ve signed up for budget billing. Be sure to note the difference between your monthly rate and daily rate.

Typically, utility customers can take their total electricity bill and divide it by the monthly total of kilowatt hours used during the month, to determine the rate they pay. For example, a $160 electricity bill divided by 1300 kWh is a rate of $0.12 cents per kWh. This number reveals how much your home energy is costing to purchase from your regional utility company, vs. the solar energy cost or costs of other energy sources.

Why Go Solar?

The U.S. Energy Information Administration estimates that in 2020, the average retail price of electricity was around 10.66 cents per kWh, with many factors affecting fluctuations from that rate. Using the above approach to break down your home energy bill, you can more meaningfully compare the amount you’re paying monthly with the cost of alternative energy resources available to you.

Are solar panels worth it? Through such a comparison, you can expect to find that generating electrical power for your home from an alternative source like solar, comes with major benefits:

  • You save money for home energy costs.
  • You’re free from paying the power company so much and can create your own energy.
  • You realize a return on your investment in the equipment.
  • You can generate sustainable energy, instead of buying power produced from fossil fuel.
  • You receive tax credits, rebates, and other solar investment incentives.
  • Per the USDE, adding a solar energy system has been shown to increase property values.
  • You achieve energy independence, which is an exceptionally secure position.

Power company rates have historically continued to rise due to inflation and utility company price increases. A solar energy system locks your rate at the amount of your equipment payments, then gives you free power indefinitely after you have paid for your solar panels in full.

Solarise Solar, Colorado Springs, Colorado

Over the past 5 years, Solarise Solar has been helping Colorado home and business owners with the best quality and prices in the installation of solar energy systems customized to meet usage and budget needs. We provide the following important benefits, among many others, for our customers:

  • Zero Down Payment: No big initial investment is required.
  • Low-Interest Financing: We offer solar financing that makes sense for your budget.
  • 30-Year Warranty: This means peace of mind throughout the life of your system.
  • System Monitoring: Track your system’s efficiency with handy desktop and mobile apps.

Call Solarise Solar, Colorado Springs CO at (719) 431-6796, or contact us online to schedule a free Energy Analysis and estimate, and get answers to your questions on solar options for your needs and budget.

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Our customers safety and protection is vital to us here at Solarise Solar - Coronavirus Notice

Solarise Solar Coronavirus Company Policy

As your solar provider, we know its important to keep your family safe and comfortable during these trying times. With most Americans now being advised to stay home when possible, we understand that your home may be using more power than normal. We stand ready to provide you with clean, affordable, and reliable power.

Solarise Solar - Colorado Springs, Colorado

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2936 Janitell Rd
Colorado Springs, CO 80906

Phone: (719) 315-3034

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