Assumptions:

Cost of System before incentives: $8,200
Federal Tax Credit: 30% paid back to you in Year 1
State or Utility incentives: $0
Amount you’ll save in energy costs in first year: $550

In each year of the chart, the dollar amount will either be above the line (positive) which represents the balance of money in your bank account, or below the line (negative) which means money you are out of pocket at that point in time. After the loan is paid off, energy savings go right into your pocket (bank account), so the cumulative total only grows each year.

If you pay for the system with a single up front payment, the money you are out of pocket reduces each year as you receive tax incentives and energy savings. Eventually you’ll get all of your money back, and savings go into your pocket (bank account.)

Remember to that in every one of these examples, you ALSO get the financial benefit from an increase in the value of your home described in Reason 1.