Payback or Return on Investment (ROI) calculations compare investment options for your hard-earned dollars.  The long life of solar systems (generally 30 or more years) and the uncertainty of the world energy situation and prices in the next 3 or 4 decades make payback calculations difficult.  What will electricity cost in 2040? 2050?  We know energy prices will go up, it's anyone's guess as to how much.  Visit our resources and news pages to find information that may help you draw your own conclusions on what the future may look like.  

This chart shows payback periods for a $4900 (after grants) Solar Hot Water System:

Calculations in this chart based on conservative calculations found in this Government of Canada pamphlet (page 15)

Consider that for the 9%, 14yr payback period shown above that in 14 years this system will still have at least half of its life left, and will be saving you energy that costs over 3 times as much as today.  When it is 30 years old, at 9% electricity inflation, it will be saving electricity that costs $1/kw-hr (12 times todays rate) and will have saved you a total of $24,000 on electricity.

Grid-tied PV systems will have longer payback periods - typically about double. 

the Dollars and Sense

Analyzing solar systems simply as investment tools only makes sense if the earth could continue to provide us with more and more resources and continue to accept our waste at an ever-increasing rate.  Your solar system is something you own to provide yourself with the energy you use everyday from a renewable resource.  Visit the Why Solar page to find many reasons putting your money in solar is distinctly different than an investment in, say, a mutual fund.  Here's some other reasons to consider:

• Like owning a new car or appliance, you'll have pride of ownership in your new solar system.  Neighbours will enquire about how it works and it will be an exciting new feature to your home.  A meter will let you monitor the energy you produce.  Your energy habits will probably change, meaning you need to buy even less outside energy.
• One way to think about a solar system is to consider it like purchasing a bulk block of energy (how ever much it will produce in its lifetime) for a fixed rate.
• Another approach is to relate it to the cost of a house.  Consider that adding 10-15% to the cost of an average house can make it take care of it's occupant's energy needs all on it's own.  Sometimes this amount can be added to a mortgage, especially for new construction.

Solar systems compared to other investments - what's least dangerous to your wealth?

These days most of us invest in the stock market in one way or another to try to grow the value of our money faster than inflation.  Financial products that allow us to do this become more complex and money seems to be 'moving' faster everyday.  In a financial world that even the experts seem to have trouble understanding we are more and more exposed to the effects of high-level corruption, fraud and mismanagement.  Now it seems that the every-day person has little hope at making good investment choices even with the help of a financial advisor.

Solar is a way of investing in hard assets, like buying a house or a piece of machinery like a tractor.  Hard assets carry their value in the function they provide - you live in a house, you farm with a tractor.  A solar system not only adds to the value of your property, but provides you with energy - energy that otherwise you need to buy.  Some things will always have a certain value, no matter what happens with markets, the economy, inflation, or interest rates.  A good meal is a good meal.  A place to live is a place to live.  How confident are you that your long term investments will retain their real value in 20 or 30 years? 

Explore the resources page to find out more information you don't usually hear in the news about our current global situation with economy and energy.