Payback Period
The time it takes for your cumulative savings to equal your initial investment in solar. Typically 6-10 years in the US.
Why It Matters
Payback period is the most intuitive metric for evaluating solar. After payback, every kWh of solar production is essentially free electricity for the remaining 15-20 years of panel life.
Real-World Example
Related Tools
Related Terms
ROI (Return on Investment)
The financial gain from solar expressed as a percentage of the initial cost. Most residential solar has 10-20% ROI.
Federal Tax Credit (ITC)
Investment Tax Credit allowing homeowners to deduct a percentage of solar installation costs from federal taxes. Currently 30% through 2032.
Levelized Cost of Energy (LCOE)
The total cost of generating electricity from a system divided by its lifetime energy production. Used to compare energy sources.