How do you calculate the payback time?

Years to Breakeven occurs when the total utility savings equal the value of the installed renewable energy system:

Years to Breakeven = (Net cost - property value increase) / ("Pre-tax" average annual utility savings)

For this calculation, we use PRE-tax dollars for the utility savings, and we assume you have a 40% effective tax rate: Pre-tax Utility savings = Average annual utility savings / (1 - 40%);

For this calculation we also assume the Net Cost to you is "YOUR ESTIMATED NET COST" minus (-) the expected increase in property value.

NOTE: When you install a renewable energy system, the value of your property will generally increase -- in some cases your "on-paper" breakeven period can be immediate (a "0" or negative number) if the cost to install solar increased your property value by the same amount, or more.


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