When considering a solar photovoltaic (PV) system, customers never fail to ask the following question: How long will it take before my system will pay for itself?

Solar energy is an investment, and like any other investment, you should examine the upfront costs and expected return before making a final decision.


The net investment is what you pay out-of-pocket after the 30 percent federal tax credit and 35 percent state tax credit are realized. Many factors play into the initial investment costs, including the installation size, material quality, panel-efficiency and quality of the installation work.

Couple those incentives with Hawaii’s dubious distinction of having the highest electricity costs in the nation, and the return on investment (ROI) may be even sooner than people think.

Generally speaking, it should take about three to four years to have a total payback of the initial investment. That timeline may even be shorter because of still-rising electricity costs.


Eschewing formulas and spreadsheets, Sunetric — Hawaii’s top solar installation company — recommends a simple formula for estimating the ROI: Take the gain from the investment and subtract the cost of purchasing, installing and implementing the system. That number is then divided again by the total cost to determine the actual ROI.

In addition, application of the tax incentives means that more than half the total cost of a new PV system is refunded to you in the first year of operation, which is a huge contributing factor to the shortened payback period, therefore enhancing the ROI. The increase in property value and not being subject to continually rising electricity costs are just icing on the cake.

“Compare those costs with other big-ticket items, like a car or even a smaller item like a new computer,” said Alex Tiller, Sunetric’s chief executive officer. “Both start depreciating in value immediately after purchase and will likely be obsolete in the next few years.”


The positive ROI from a PV system adds economic appeal to the system’s environmental function of providing renewable energy without releasing harmful toxins or greenhouse gases into the environment.

contact // 262-6600
address // 905 Kalanianaole Hwy. #21
web // sunetric.com