Cheap Solar Panels - How to Calculate the Return on Investment For Your Solar Power Home

Is installing residential solar panels in your home aStep Three: Estimate Daily Solar Electricity
smart long-term investment, or a money pit? If itGenerated
really will pay for itself, how long will that take?Next, you need to know how much electricity
What will be the return on your investment?your residential solar panels can generate per day.
This question is hard to answer because there areThis number can vary from day to day depending
so many different factors to consider, and noon cloud cover, daylight hours, and geographic
two people's situation are alike. The number oflocation, so you'll have to get an average number
residential solar panels, how much power yourfrom the manufacturer or distributor. If you build
house uses, the cost of electricity, geographicyour own Cheap Solar Panels, you'll have to
location, and even time of year can all affect yourestimate it yourself. For the sake of example,
return on investment. You'll have to do thelet's just say your home-built solar panels
calculations yourself for your individual situation,generate an average of 5 kilowatt-hours (kWh) of
and this article will explain how.electricity per day.
Step One: Cost of Residential Solar PanelsStep Four: Cost of Electricity
First, get a quote on how much your panels willCheck your power bill and see how much you
cost (including installation). If you plan to build yourpay per kWh of electricity. For example, let's say
own panels, this can be a bit harder to calculate.its $0.15 per kWh.
However, it's safer to over estimate the costs toStep Five: Do the Math
build the panels than to under estimate.Find out how much you are saving on your power
For example, let's say you pay $3000 for a solarbill per day by multiplying the amount of solar
power system, however, with a complete solarelectricity generated by the cost per kWh. For
power system blueprint, such as fromexample, if your cheap solar panels generate 5
Earth4Energy, they've proven it's possible to buildkWh per day, and one kWh costs $0.15, then you
your own cheap solar panels for less than $200.save $0.75 on your power bill per day. This may
This is how much money the panels will have tonot sound like much, but it adds up quickly to
save you before you break even. Money you$23.25 per month and $273.75 per year.
save after that point is pure profit, a return onFinally, to see how long it will take for your solar
your investment.power home to pay for themselves, divide the
Step Two: Subtract Tax Creditcost of the cheap solar panels (minus the tax
The federal government grants home owners acredit), and divide it by the amount of money you
tax credit for installing residential solar panels thatsave per month. For example, that would be
is equal to 30% of the cost of the solar power$2100 divided by $23.25. The result is 90 months,
system. If you build your own cheap solar panels,or seven and a half years. Or if you built your
keep the receipts and keep careful records, justown with Earth4Energy your break even point will
in case of an audit.be considerably less and well worth looking into.
Subtract the tax credit from the cost of yourAny money saved after that is pure return on
panels. This is your new break even point. Forinvestment.
example, if your panels cost you $3000, thenInstalling residential solar power by building your
30% of that would be $900. If you subtract $900own cheap solar panels is definitely a great
from $3000, you get $2100-and that's how muchfinancial investment and an excellent contribution
money you'd have to save to break even onto the environment for a greener world.
your investment.