As the population globally increases and moves toward a more modern day and energy dependent one, the demand for energy will continue to rise. We must recognize that large portions of the global population are moving out of their ancestral farm lands and into cities, entering the energy market with an insatiable demand. Because of this increase in demand for energy, the price will continue to rise. You may be wondering whether or not you can afford to take advantage of technologies like solar panels, but you don’t know how to figure it out. This article is meant to provide you with some helpful information on how to determine whether or not you will be able to afford solar panels and how long it will take you to recoup your initial investment.
In order to begin your calculations, you will first need to determine what your initial costs are going to be. This will involve contacting a dealer of solar panels in your area. Typically, these dealers will provide you with an estimate of how much capacity you need and how much it will cost. These estimates will also detail how much energy production you can anticipate from your solar panels. Once you have an estimate of initial costs, you can move on to step two.
In dealing with solar panel installation, there is typically some form of state and federal incentive program to help alleviate the initial cost. You should also check with your local utility provider to see if they provide any incentive programs for people interested in installing solar panels on their home. Once you figure out how much you can expect in rebates and incentives, subtract this amount from your original cost.
The original cost minus the incentives is your cost for year zero. You can now begin determining how much money you will save in the coming years. From the information you garnered in step one, you should know how much energy your solar panels are going to produce. For a worst case scenario, take 80% of that number and then take a look at your electric bill. Multiply your expected energy output by the cost per kWh from your bill. This will show you how much you can expect to save. Multiply this number by 12 to get an estimate of how much you will save per year.
Now for the final step. Take the number you got as your cost for installation and purchase minus incentives and divide it by the number you got for yearly savings. You should get a number that is between 5 and 7, as this range is the generally accepted payback period for installation of solar panels. This number represents the number of years it will take for you to recoup your initial investment. After this number of years, you will be putting money in your pocket. Hopefully you now see how you can save money in the long run by investing in green energy.