Payback
How long will it take to get my money back?
One of the most common questions we are asked is “What is the payback?” for solar thermal systems. Well first and foremost it does have a payback. If you buy coal, oil or electricity or gas the supplier does not offer you any pay back at all. No matter how much gas, oil or coal you buy and no matter how long you buy it for, you never get your money back. You have to service, maintain and renew your fuel burning equipment. Similarly the electricity company never offers you a payback.
Various government bodies define sometimes payback as the annual fuel bill savings divided by the capital cost. This is simply inaccurate and misleading.
If you take a proper view of payback, you have to factor in future energy increases, take account of inflation , look at the savings in boiler servicing and the ability to make a boiler last longer. Doing the sums properly solar thermal systems offer a payback between 4 and 12 years, depending on the fossil fuel displaced, the future inflation factor, and the amount of hot water you use.
If the product is built as part of the housing infrastructure it will last for 30 years with minimal maintenance. If the product is built into the home in the course of construction the payback period declines rapidly.
Although payback is one way of looking at the cost it is perhaps more accurate to look at the return on your investment that a thermal solar system offers. Typically the average financial savings on a good solar thermal system will be equivalent to a tax free return on their investment of between 8 and 12% and this figure can increase depending on factors such as application and hot water usage.
The simple answer is “yes there is a payback” with a solar thermal system unlike any of the standard gas, oil, coal or electricity suppliers you are currently using.
