Return on Investment on Residential Solar Energy System in Top 20 US cities

Business Insights May 17, 2018

Solar Installation companies are going through the most fortunate times of the era. Solar power has become quite popular. Solar Photovoltaic Installers and solar panel installations companies have become more affordable and efficient since the past decade. The average cost of solar panels has reduced to around 50% since 2014.

Why Do People Install Solar Panels?

There are a lot of reasons why people install solar panels in their homes. It does not release any greenhouse gases and it is a good move in terms of clean energy production. Although, one of the important reasons for solar installation is solar panel ROI or solar panel return on investment.

solar energy installation return on Investment

What Is The Payback Period for Solar Energy Installations?

Solar Power ROI or solar energy installation does not have a fixed payback period. It depends on a lot of aspects like sun run cost per watt, electricity consumption , solar system performance and  your solar electric company etc.

Is Solar Panel Installation Worth The effort?

The amount of money you save from investing in solar panels may differ from one place to another on various factors like your place of living, incentive amount from the state government and the type of system you install from your residential solar companies or local solar companies. Regardless of the circumstances, solar system ROI is always on the higher side.

How did we calculate the return on investment on solar panels?

We recently built a tool (using SAM model in the backend) to understand if one was to install a solar energy system at their residence on the rooftop, how much time would it take them to recover their investment.

For our research, we picked the top 20+ most populous cities in USA and picked the most populous zip code in that city (from here). We made following assumptions:

  • →12,000 kWh annual electricity consumption.
  • →Customer wants to deploy a solar energy system to replace →100% (or closer) of grid electricity.
  • →Consumption of electricity increases by 3.5% annually while   the solar system performance degrades by 0.5% annually.
  • →EPC (Engineering, Procurement, and Construction) cost is 3$/W.

Here are the results:

Solar Panel Installments ROI In USA
Solar Panel Installment 

Please note that break-even point time is in years it will take to recover the system cost with the savings in the utility bill.

So, if you are in California or Hawaii, you should definitely invest in a residential solar energy system with break-even point less than 5 years.

BTW, if we missed your city but you want to know the return on investment in solar energy system in your city, please drop in a comment and we will update this table and share the data with you in the comment section.

Our Solar practice team works with solar companies across the globe to help them gain business efficiencies by leveraging the best of technology.

What’s the biggest thing you’re struggling with right now that we as a technology consulting company can help you with? Feel free to reach out to us at We hope our assistance will help!


Jaikishan Jalan

12+ years of experience building native apps, websites, backend @microsoft, @google, @startups. ISU PhD dropout, IIT Dhanbad Alum

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