Solar payback period

Question

Julie is considering installing photovoltaic panels on the roof of her house. Her monthly electricity bills currently average $85. The cost of installing  photovoltaic system is $18,400; however, she expects to see a $40 reduction in this cost due to tax credits and local rebates. Assuming all of her electrical needs are met by the new system and neglecting possible revenue when the system puts electricity back into the grid, what is the approximate payback period on the investment?

Answer 1

If I am understanding this question correctly,  the answer can be found with these steps:

 

A. calculate the net cost of installation, $18,400 - $40 = $18,360

B. calculate how many months at $85/month:  18,360/85 = 216

C. 216 months / 12 months per year = 18 years.

 

The approximate payback period is 18 years.