Here are daily electric meter reads after installing a 5kW array of 22 photovoltaic solar panels on the roof:
Aside from truly cold winter days and truly hot summer days (see the green temperature graph line to determine how hot/cold each day was), the house is usually generating more power than consumed (blue/brown bars are below the 0kWh usage mark). The system is grid-tied and a net power usage agreement with the local power company (SRP) let's us dump excess produced solar power onto the power grid. That same amount of power can be later taken back from the grid with no net cost (aside from $18/month minimum service charges).
The system was installed by a professional solar electricity contractor. It cost $19K upfront for the installation labor and parts. SRP sent an "incentive rebate" check for $5K once the system was online, bringing out of pocket cost down to $14K at that point. Hopefully, the federal tax credit will cut another 30% off of the expenditure when 2012 taxes are done.
Based on past electricity use, the current price of electricity, and all the incentives/credits: we estimate the system will "pay for itself" in about 10 years. If the gov't and utilities had let us install the system ourselves, the cost of the components (excluding labor) would have paid back in less than 5 years.
Just last month, SRP announced higher electricity prices. If they keep doing that every year, the pay back period should become shorter and shorter. With the Federal Reserve printing money like there is no tomorrow, we bet electricity prices have a very good chance of continuously increasing as time goes forward.
The "Solar is not worth it" Fallacy
Pay back period calculations are often used by naysayers to convince people not to install solar power. How many years does it take for your iPad/iPhone/TV/NetFlix/NFL Season Pass/etc to "pay itself back"? Wait, those never pay for themselves? People willingly buy all kinds of gimcracks that have no hope of ever paying back, yet people scoff at buying something that DOES PAYBACK, if only after many years?
Here's another thought experiment regarding "payback period" calculations for solar electricity... Let's say 25% in the US had their own solar panel array. How low do you think the price of grid electricity in the US will be pushed down? Let's increase the amount of solar power to 75%, 85%, or 99%. The cost of electricity will approach zero as the percentage of electricity generated from free sunshine approaches 100%.
Now, when the cost of electricity gets pushed down to zero, what becomes the "payback period" of the solar panels that were used to push the price of electricity down to zero? Oh snap! Solar never pays itself back! OMG, no one should ever bother installing solar panels because it won't pay itself back!!
Sure, electricity from the power company is "cheap" compared to the upfront cost of the solar panels and equipment. But it's a fool who decides that cheap electricity is better than free electricity. Look at your monthly budget. Will you and your children be better off paying for electricity at today's price for the rest of your lives? Or would you be better off paying for 10 years worth of electricity at today's prices and then no longer have to pay anything for electricity after that?