There's been a lot of discussion on the economics of installing rooftop solar. I thought I would give my perspective because we installed solar on our house about a year ago. Our system cost $30,500. It was financed for 1.5% APY for twenty years with zero down. The monthly payment is about $150. We received a tax refund of $8322, which we did not apply to the principal, since the interest rate is so low. You should know that if you redo your roof at the same time, you can claim the part of the roof that is underneath the panels. That's why our credit is a little higher than 26% of the system cost. Our cost was higher, because we do not have a south-facing roof. Our panels face to the west. We live in Wisconsin, which is not the best environment for solar power either.
So, in terms of economic impact to us, we started with a "balance" of 8322. Our electric bill has been reduced in two ways. One, power we generate and consume is subtracted from our bill at the rate the utility charges. Two, power we generate and sell back is subtracted from our bill at 1/3 of the wholesale rate (that varies from state to state). When you take these amounts for the last year, and subtract our loan payments, the net expense is about $1100 per year. I have spreadsheets tracking this because I am curious about the economics also; we did it more for environmental concerns.
This means it will be about 7.5 years before we actually "pay" anything for our solar installation (before we wipe out the $8322 in cash we were handed for installing the system). After that 7.5 year grace period, we spend $1100 per year helping the environment. Assuming we stay in our house for the full length of the loan, we would then be saving money from that point onward.
There are some other economic factors which probably reduce that cost. First of all, the $8322 is being invested in a conservative portfolio which typically earns a return around 6%. Second, we think (we're not sure) that our house is cooler in the summer since we installed the panels; it definitely is not making the house hotter. Third, the forecasting is conservative because it assumes the cost of electricity does not increase (unlikely). Fourth, while I have a hybrid vehicle now, if we get an electric vehicle, we will save more money, because we'll be using more of the electricity we generate instead of selling it back.
Finally, we give a considerable amount of money to charity, and we view this expense as a component of our charitable contributions. That's probably the most important point I would make here. The other point is that installing this system does not make sense if you anticipate relocating to another area. If we did move, we'd probably realize some savings also from the increased value of the house, but it's hard to say.