2013
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.
Go to www.solar-estimate.org
