Batteries allow you to store excess solar energy during the day and use it after the sun sets. That reduces the amount of electricity you must purchase from the grid, lowering monthly bills and providing backup power in case of an outage. A payback calculation helps you decide whether the investment makes financial sense.
The payback period is the number of years it takes for savings to equal the initial cost of the system. With as the payback in years, as the system cost, and as annual savings, the equation is:
A shorter payback indicates a faster return on investment. Incentives, time-of-use rates, and battery degradation all influence real-world savings, so consider them when planning.
If your battery system costs $8,000 and you save $1,000 per year by using stored solar power during peak hours, payback occurs in , or eight years.
Financial payback doesn’t capture all the benefits of home storage. You may value energy independence, resilience during outages, or reducing reliance on fossil fuels. These advantages can tip the scale even if payback is longer.
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