How long do solar panels last? Solar panel payback period

Solar panels are becoming an increasingly popular form of providing energy to homes or business. Solar energy helps people save money on electricity in the long term and reduce their carbon footprint. And before making a large investment in buying solar panels, homeowners naturally want to understand how many years they can use them and determine if they are worth the investment.

In this blog, we'll explain how long solar panels last, the payback period, and ways to make sure your solar panels last as long as possible.

How long do solar panels last?

A solar panel is a relatively simple device with no moving parts; they require minimal ongoing maintenance if they have been installed properly. As a general rule, solar panels last for about 25-30 years. Most solar panel companies will provide a standard 25-year warranty for the expected life expectancy of the solar panels.

It's important to note that this doesn't imply that they will stop producing electricity after that period. Solar panels are generally built robustly and to withstand all kinds of weather conditions. However, after 25-30 years, it is common to see the solar panel's electricity production decrease 10-20% below their initial power output rating.

What is the solar panel degradation rate?

The solar panel degradation rate on average is 0.5% per year. This is the rate at which your panel efficiency reduces over time. Basically, it shows the quality of your panel — the smaller the rate, the longer your panel will keep its properties.

A degradation rate of 0.5% per year means that, after a standard 25-year long warranted service, your solar panel system will provide 87.5% of its factory output. Solar panel degradation rates depend on the brand as well. As you'd expect, higher-quality panels will have a lower degradation rate than lower-quality panels.

Factors that affect the lifespan of solar panels

There are a variety of factors that can contribute to the productivity of a solar panel and either increase or decrease its lifespan. Some of those factors include:

Quality

As with most things, the quality, materials and type of solar panels you install will impact how well they work and how long they last. While low-quality materials may be more affordable, they may also degrade more quickly.

Climate

Extreme weather can reduce the life of a solar panel. If you live in an area with cold temperatures, heavy rain, snow and hail, you might find that your solar panels degrade more quickly.

Installation

Solar panel installation method -- and the solar racking system they are installed on -- can impact their degradation rate. 

Maintenance

Just as anything else of value you buy, solar panels last longer when they are well-maintained. Panels may degrade more quickly if they are dirty, have debris on them or don't undergo regular maintenance.

How to make solar panels last longer

To maintain maximum electricity output and extend the life of your solar panels for as long as possible:

● Keep your panels clear of debris, dust, dirt and pollen with a regular hosing down.

● Get a professional maintenance check every few years.

● Get your panels installed by a reputable provider in the first place, so you can rest assured that they will fix any (unlikely) issues that do come up.

● Ensure your panels are not placed beneath any branches or heavy objects that could fall in stormy weather.

● Regularly check that your panels do not have birds or rodents nesting underneath, as this can damage the wiring and roof attachments.

Solar panel payback period

The average solar panel payback period is somewhere in the eight- to 12-year range, this can vary quite a bit from home to home. For some, it may be as little as five years. For others, it may be as long as 15 years. Local electricity costs and state-specific financial incentives, such as tax credits, solar rebates or net metering programs, are determinative factors.

One way to determine whether you're getting a good return on your solar energy investment is to look at the entire lifespan of your system. Most residential solar systems last between 25 and 30 years. If your payback period is eight years, you'll be "making money" on the system for 17 to 23 years.

Most solar industry experts say that if your solar panel payback period is less than half the life of your system, it's a decent investment.

How is the solar panel payback period calculated?

To calculate your solar payback period, you'll need to take the following steps:

● Determine combined costs. Subtract the value of up-front incentives and rebates from the gross cost of your solar panel system.

● Determine annual benefits. Sum up your annual financial benefits, including avoided electricity costs and any additional incentives.

● Divide your combined costs by your annual financial benefits. The result will be the number of years it will take for you to achieve payback. Every month of savings after that point in time should be counted as a financial gain!

If your cost of installing solar is $20,000 and your system is going to save you $2,500 a year on foregone energy bills, your solar panel payback or "break-even point" will be 8 years ($20,000/$2,500 = 8).

Final Words

Your solar panels will likely last for 25-30 years as long as you pick a good brand. In addition, working with a reputable installer will go a long way in making sure that your solar panels are high quality and will be covered under a warranty. If you find that your electricity bill is going up because your solar panels are no longer doing the trick, then it's probably time to replace them.