Solar Panels - Profitability and Return on Investment

Solar panels are particularly popular among homeowners and cottage owners, but increasingly, larger companies and apartment building associations are beginning to use solar panels to manage electricity costs as corporate responsibility and environmental values gain importance in businesses. For those considering solar panels, a crucial question is whether the significant investment will pay itself back through reduced electricity purchases. The ROI for solar panels refers to how long it takes for the savings generated by the panels to cover their purchase price. Essentially, after the investment has paid for itself, all electricity generated by the panels is profit.

The time for ROI (return on investment) is a good way to assess whether investing in solar panels makes financial sense in your case. Generally, a solar power system pays for itself in 10-15 years. The technical lifespan of solar panels ranges between 25 and 40 years, so potentially, the system could produce free electricity or yield profits for 10-30 years.

Since electricity is always used closest to its production site, and at certain times of the year, the panels can generate all the electricity needed for a household, this means no transmission fees are paid for the electricity produced by solar panels. The reduction in transmission fees further improves the ROI. However, it’s important to note that there are so many factors influencing the ROI that it only becomes clear during usage. There are currently views suggesting that electricity prices may drop significantly in the 2030’s, which would mean the payback period for solar panels could increase substantially. As recent history has shown, electricity prices can change rapidly and unpredictably. Here are some factors that can affect the time for ROI:

• Market price of electricity
  If electricity prices rise, the time for ROI shortens. Conversely, if prices fall, the time lengthens.
• Roof/panel orientation
  Panels facing south give the best results, while those facing east, southeast, southwest, or west produce slightly less. Panels should not be oriented to the north, northeast, or northwest at all.
• Location
  In Southern Finland, panel output is at its best, but even in Northern Finland, solar panels can still be beneficial.
• Proper panel sizing
  If there is a lot of overproduction, especially during the summer, the relative savings may decrease. The best savings are achieved when all the electricity produced is used directly. Surplus production can be sold through Vihreä Älyenergia to other electricity users.
• Weather
  Annual weather conditions, including snow and levels of light, cloud cover, and temperature, all influence the amount of electricity produced.