Whenever any purchase is made to lower operating costs, the question that will arise is the one about payback: how long will the savings created by a solar system add up to equal its cost?

The classic method for calculating simple payback is to divide the annual savings into the initial price to calculate the number of years to payback the original expense of the system. So if a system costs $10,000 and is saving $2,000 per year, the simple payback is five years ($10,000 divided by $2,000.) But using payback as a benchmark for making the decision to go solar begs the question: what is an acceptable payback? Five years say some, ten years say others. A great many people feel that the solar option is justified if it simply pays for itself within its lifetime. Solar electricity generated on site is clean and it recycles dollars in the local economy instead of buying and burning irreplaceable fossil fuel. It also helps our utilities by providing energy when it’s most needed, during the summer. The economics of the decision to go solar should really be viewed in the same light as you would view any other investment: its annual return or yield.