Payback periods for solar panels

Since electricity tariffs, prices for solar panels, and the cost of installing the latter are rising at the same time, the question arises: how does this affect the payback period of solar panels? We invite you to find out!

1. Why has the cost of solar panels increased?

First, manufacturers raised prices. Raising the cost of raw materials around the world, problems with the supply chain and wage growth for employees of enterprises in response to high inflation played a role.

Secondly, demand has increased sharply. At the end of last year, both electricity and gas began to rise in price. Consumers began to look for alternative ways to supply energy, which led to a surge in demand for solar panels. Now it is difficult for suppliers of solar panels to meet the demand. Companies that install them hire additional workers and have to bear additional costs for staff training.

2. How much have solar panels risen in price compared to the second half of last year?

According to information provided by the company Solvari.nl, which is engaged in the supply and installation of solar panels, prices, including installation, have increased by almost 30% since the second half of 2021. A Solvari spokesperson says part of the increase is due to installation costs. Purchase prices for panels and inverters also rose by about 30%.

The difference in the price of solar panels in the second half of 2021 and in the first half of 2022, see the table. At the same time, the average price of solar panels (without VAT), including installation costs, is taken as a basis.

So, a set of 10 solar panels now costs an average of 900 euros more than in the second half of 2021. On the other hand, electricity prices have also risen.

3. How has the price of electricity increased compared to last fall?

According to Statistics Netherlands, in November 2021 the average price for electricity was 33 cents per kWh, and in April 2022 it was already 52 cents per kWh. The increase in price is more than 40%. This difference will be even more significant if we take prices for the first half of 2021.

4. What factors should be taken into account for accurate calculations of the payback of solar panels?

The calculations below will be indicative, as they will not take into account several important factors.

First, not all suppliers refund the basic price of electricity before taxes. Half of the suppliers pay much less for the electricity they receive from customers with solar panels. Companies do not take into account the increase in electricity tariffs when calculating compensation payments.

Second, after 2025, the full cost of electricity, including taxes, will be reimbursed for a smaller portion of the returned electricity. Gradually, energy supplier compensation will increasingly consist of a “basic electricity price” without taxes.

Thirdly, household consumption averages 2760 kWh per year, and the average output per solar panel is 321,2 kWh. But these figures vary depending on the amount of electricity consumed, as well as on the type and brand of panels.

5. Does the payback period of solar panels depend on the time of their purchase?

Increasing electricity prices and increasing solar panel costs balance each other out quite well. Payback periods remain stable and are three to four years:

If you are interested in the topic of energy efficiency, we also invite you to read our an article with clarifications on the National Thermal Energy Conservation Program.