Solar Industry Crosses Payback Milestone

2012 might have been a milestone year for the solar industry as a whole, according to a Standard study released last year.

Thanks to the steady declining energy inputs required to build, install, operate and eventually dismantle photo voltaic (PV) systems, it is likely that somewhere between 2012 and 2015, the cumulative solar energy generated by the entire installed base of PV systems to date exceeds for the first time the energy consumed in producing those solar modules to date.

Energy Payback Time

It takes energy in order to get energy. Unlike sources like fossil fuels which have high energy densities, low energy density sources, common among renewable energies, require that a much larger amount of energy invested upfront in the manufacturing and installation processes and a much smaller amount of energy harvested over time to recoup and eventually generate a return on one’s energy investment.

The energy payback time (EPBT), therefore, is the crossover point when the cumulative energy harvested exceeds the energy inputs required to put the system in place. Beyond the EPBT point, the system gets to reap the benefit of its initial energy investment until the system runs the course of its useful lifetime.

Solar power energy payback time



Thanks to the steady declining energy required to manufacture and install PV systems, the EPBT for solar PV systems has shrunk dramatically from a high of almost 50 years in 1970s to as low as 0.5 year for parts of the world where sunshine is plentiful, as in the US Southwest.

Coupled with an equally stunning drop in the cost of production – 99% in the past quarter century; the price of roof-top solar systems dropping 12 to 15% between 2012 and 2013 alone – it means that solar PV systems would continue to experience rapid growth in years to come.

EPBT of PV systemsEnergy payback times of PV systems (Source: National Society of Professional Engineers)


The traditional way of calculating the EROEI (see previous article on EROEI and the energy cliff) of a PV system is:

EROEI (solar PV) = Lifetime / Energy Payback Time

Thus, with a typical life expectancy of 30 years and EPBT range from 0.5 to 2 years, the range of EROEI ranges from 15:1 to 60:1.

Check this article for a primer on PV system EPBT.




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