Solar payback period: how long until panels pay for themselves?
The payback period is how long it takes for the money solar saves you to add up to what you paid for it.
The simple version
Payback ≈ net cost ÷ yearly savings. A $15,000 system that saves $1,000 a year pays back in about 15 years.
The more honest version
Several things push the real answer up or down:
- Rising electricity prices make each year’s savings bigger. BC Hydro bills rose 3.75% in each of April 2025 and April 2026.
- Panel ageing: output falls about 0.5% a year.
- An inverter replacement part-way through adds a cost.
- Export rules: surplus earns less than the power it replaces in both BC (10¢/kWh on BC Hydro’s new rate) and Alberta (energy rate only).
- Fixed charges never go away, so they don’t count as savings.
Our reports and calculator work out the bills for every year with and without solar, so these effects are included rather than approximated.
Payback isn’t the whole story
A 12-year payback on panels that last 25–30 years leaves many years of nearly free electricity. A 22-year payback leaves almost none, and depends on everything going to plan. It also helps to compare with what the same money could earn elsewhere: we report a “value today” figure that discounts future savings at 4% a year, and the lifetime cost of the solar electricity per kWh, which you can compare with what you pay now.
Why ranges matter
Installed prices, future electricity prices and production all carry uncertainty. A good estimate shows a pessimistic and an optimistic case. If solar only pays back in the optimistic case, treat it as a gamble.
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