Ever since the start of the industrial revolution, the annual global temperature has increased, resulting in global warming and climate change. Burning coal, petroleum, and gas release a lot of carbon dioxide into the air. So, we need to be careful about these resources’ consumption to minimize carbon dioxide emissions.
Installing commercial solar Adelaide is a way for the future and has become progressively popular in the commercial industry. Solar power systems derive clean, pure energy from the sun and help combat greenhouse gas emissions.
Factors Impacting Solar Payback Period
There are many factors to consider when calculating the payback period of a solar panel. We’ll review a few major factors here.
- The gross cost of a solar panel system: The total upfront costs impact the payback period. The installation of solar panels depends on the size of the system selected. This means the actual equipment that forms the system and the general cost of wear and tear. There are many experts who specialize in this field aiming to reduce energy costs by designing and installing the best panels for a better outcome.
- Value of up-front financial incentive: Tax breaks and rebates can reduce the cost of using solar panels. The Federal Investment Tax Credit allows the deduction of a certain percentage of the cost of the system from the taxes, and additional state and local financial incentives may also be available in a particular area.
- Average monthly electricity use: The electricity consumption in a month indicates the amount of electricity that can be offset each month with solar. The higher the electricity bills are, the shorter the payback period will be. So this is a consideration you need to consider when installing commercial solar Adelaide.
- Additional Incentives: Additional incentives can be earned in the form of solar renewable energy certificates (SRECs) that give a kilowatt-hour credit for the solar electricity panels generated. Depending on your solar energy system size, these can represent a significant monetary benefit.
How Do You Determine Its Payback Period?
The financial benefits of using solar panels are now well documented. It functions as a long-term investment with strong rates of return. The solar panel payback is a calculation that estimates how long it will take for you to “break even” on your solar investment. The calculation is concerned with the period in which the revenue will equal total costs, and its net income will be zero.
The payback period can be determined by starting with the total cost of installing the panels, minus incentives or rebates. Then by dividing the remaining cost by the monthly electric bill savings. For instance, suppose the solar panel installation costs $17,000. You can expect a rebate of $5,000 from concerned authorities bringing the cost down to $12,000. Thus, with an investment of $12,000, you can expect $1,200 savings per year, bringing your payback period to 10 years.
Solar Energy is a clean, pollution-free, and renewable source of energy. Fossil fuels will eventually run out, but sunlight is there forever. Whether you are trying to reduce electricity costs or carbon emissions, solar panels can be used to generate major savings and help in pollution control. So get in touch with Class A Energy and use solar solutions for good.