Solar pays for itself by saving you money you would have otherwise had to spend on electric bills and applying that savings towards how much your panel system cost. Let’s look at an extremely simple example: say you were spending $150 per month on electricity before, but after installing solar you’re only paying about $20 per month on your energy bills. The difference of $130 is your savings. Now, let’s say your panel system cost $10,000 to install. At $130 per month, you’ll reach that $10,000 threshold in 77 months, or roughly six and a half years. This is known as the “payoff period,” and once it is completed, all of the energy your panels produce will be essentially free because you will own your panel system outright and all of the energy they produce.

In a more example, that payoff period might be even faster. Because your energy costs will fluctuate with rising grid prices, and that means your actual payoff period could end up being shorter thanks to higher savings. Likewise, with available incentives helping reduce your initial investment cost, your actual payoff period could drop even further.