What is Your Break-Even Point with Solar?

Investing in solar energy for your home or business is a significant decision that promises long-term savings and environmental benefits. However, understanding when you’ll start seeing a return on your investment, known as the break-even point, is important in your decision-making process. Let’s explore what the break-even point is, how to calculate it, and the factors influencing it.

What is the Break-Even Point?

The break-even point in solar energy is the time it takes for the savings on your energy bills to equal the initial cost of installing a solar power system. After reaching this point, energy savings translate directly into financial gains.

How to Calculate Your Break-Even Point

  1. Determine the Total Cost of Installation: This includes the installation cost and any other associated expenses.
  2. Calculate Annual Savings: Estimate how much you’ll save on your energy bills each year. An expert from My Generation Energy will be able to help you calculate your annual savings.
  3. Apply Any Incentives or Rebates: Factor in government incentives, tax credits, or rebates. If you’re not sure what incentives are available, see the example below. If you have questions, contact My Generation Energy to schedule a free solar energy audit.
  4. Calculate the Break-Even Point: Divide the adjusted initial investment by the annual savings.

The illustration below outlines what the break-even point is for a small (12 panel) and average (20 panel) size solar energy system.

Chart showcasing breakeven timeline for different solar PV systems

Factors Influencing Your Break-Even Point

  1. Energy Costs: Higher local electricity rates mean greater savings with solar, shortening the break-even period.
  2. System Size and Efficiency: Larger or more efficient systems can produce more electricity, enhancing savings and reducing the break-even time.


Understanding your break-even point with solar energy involves a detailed look at costs, savings, and various influencing factors. By carefully analyzing these elements, you can make an informed decision and enjoy the financial and environmental benefits of solar energy. A solar expert from My Generation Energy can help by calculating your specific numbers and show you how soon you can begin reaping the rewards of going solar. The sooner you go solar, the sooner you can reach your break-even point.

*Please note that we are not tax advisors, and your tax credit amount may vary.

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