One way to think about buying solar panels is to view it as paying 10 to 25 years of electric bills up front, in one lump payment. The value of your savings increases over time and can result in a double-digit return on investment – far better than most other investment opportunities. An average-size (5 kW) system can generate over $40,000 in energy savings over the course of 20 years (not even the full lifetime of the panels!). The 10% yearly return on investment compares favorably to yields on Money Market investments (averaging 1-2%), U.S Treasuries (averaging 2-4%) and the stock market (averaging around 8% over the long-term).
While it may take a number of years to pay back, solar panels always recoup their price tag because solar power reliably and consistently pays you back year after year. Solar panels reduce your electric bills and lock in your electricity rates for the life of the panels so your energy bills become low and predictable for decades. And unlike most home improvements, which depreciate in value with age, solar panels will increase in value over time as electricity prices rise. What will electricity prices be in the future when you sell your home? The higher they are, the more people are willing to pay for an efficient home, so solar panels are like a hedge against increasing electricity rates. So even if you don’t plan to stay in your home for a long period of time, your solar panels are still a good investment.
A typical installation is 5 kW (5,000 watts). When the sun shines on those solar panels for one hour (in non-cloudy conditions), they produce 5,000 watt-hours, or 5 kWh of electricity. On a cloudy or short winter day, the panels might produce 15-17 kWh during the day. On a perfect, clear sunny day, they might produce 30kWh of electricity during the day.
A regular light bulb uses 60 watt-hours of electricity in one hour. A fluorescent light bulb uses 15 watt-hours in one hour. A large plasma screen TV uses about 150 watt-hours in one hour.
So on a great sunny day, your panels would produce enough electricity to power your large plasma TV for 200 hours or one regular light bulb for 500 hours or a fluorescent bulb for 2,000 hours.
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