Understanding Solar Paybacks

Solar for Businesses | 2 min read
Pitman Pennsylvania

One of the first things that most customers ask when considering a solar system is “What is the payback?” While the payback period is important to consider for any investment, there are many other aspects to consider!


What is the lifespan of the equipment?

Many residential and commercial equipment investments have an equipment lifespan of 5-15 years. For these investments, it makes sense to seek a payback period that is half of the life span of the equipment, or in the range of 3-8 years.


If we consider the fact that the lifespan of solar modules is expected to be in the range of 30-50 years, it follows that a payback period of 15 years or more could still provide opportunity for an attractive investment. If a solar investment pays off in 15 years and the system lasts 30 years, then that means 15 years of free electricity!


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What maintenance costs are associated with the equipment?

Most equipment investments will have some level of maintenance requirements over the lifetime of the investment. Although there are usually warranties available to help mitigate the costs of parts if maintenance is required, often labor costs are not included.


At Paradise Energy Solutions, all of our solar modules have a 25 year performance guarantee, all of our inverters have a 10-25 year warranty, and we are currently offering a 10 year workmanship warranty on all new systems! The workmanship warranty covers all labor, parts, and shipping not covered by manufacturer's warranties, which means little to no maintenance costs for our customer for 10 years!


Our cash flow analyses provided with our quotes included a nominal yearly cost for maintenance after year 10, which we expect to be needed for inverter replacement after the inverter warranty period.


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How do you know how the equipment will perform?

Energy Star stickers, energy usage estimates, and estimates by the installing contractor are typically the best information available.


At Paradise Energy Solutions, we are currently offering a 10 year performance guarantee on all of our new systems! Not only that, but we back that with actual dollars: if the system doesn’t perform as guaranteed, Paradise Energy Solutions will pay the customer for the lost production multiplied times their electric rate at contract signing! This is one more layer of protection for our customers, as well as assurance that we will resolve issues quickly in the unlikely event of equipment failure.


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What other costs are associated with the investment?

Most commercial equipment investments come with a requirement to provide labor to run the equipment. Other costs include but are not limited to training, safety concerns, fuel costs, space for equipment, and management of demand for that particular piece of equipment.


With a solar investment, we recommend that our customer’s periodically check their inverters for error codes and their production meter for any indication that the system is not producing as it should be. Other than that, let the sun come up every day and do the heavy lifting!



As you can see, there are many things to consider in a solar investment. While payback is important, it is certainly not the only consideration when comparing solar to other investments.

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