Coming late to this party, but this is actually a topic that I know something about. I was a certified Solar Site Assessor in Wisconsin back in the days before the utilities bought the public service commission who then quit funding the program. We had a complex spreadsheet and methodology that would factor in a number of variables in a solar installation and output a bunch of good information - system output, payback period, etc. There are a lot of factors that need to be considered in determining whether a solar install makes sense:
- System output. Use the National Renewables Energy Labs (NREL) PVWatts calculator. Unless it's been simplified since I last used it, there's a bunch of parameters that needed to be input - location, panel mounting type and direction if fixed, panel output, etc.. Bigger systems are more cost effective since the BOS (balance of system) costs per watt decrease on bigger systems. Any shade between 9am and 3pm will reduce the system output, and this should be evaluated with a solar analysis tool which these days can be a smartphone app.
- How unfriendly is your utility and your state to end user owned PV? Utilities would rather sell you electricity than have you make your own, or worse, sell it to them, especially at retail prices. The rules vary radically by state, and more utilities are trying to put monthly minimums in place to "pay for the infrastructure", even though distributed solar at the low penetration levels we have actually reduce their costs due to needing less distribution infrastructure. Likewise the deals on selling excess power you generate vary greatly by state.
- Are you buying or leasing a system installed by a third party (in states where that is legal). If you are leasing, there's a third party that will need to make a profit so any savings on your bill will be shared with them. On the other hand, they know the rules and handle permitting, etc. which simplifies the process. If you are buying, it's up to you to find the best equipment at the best price and that's not a simple task.
- Rebates, incentives, and financing make a huge difference. Federal and state rebates vary by both location and tax year and getting a significant tax credit can make the difference between a reasonable time to payback and never. If you're financing you need to figure in the interest rate, and if not, the interest you'll be losing by tying your cash up in a fixed asset on the roof.
- Permitting and regulation. How hard is it to get approval and how long does it take, and how much hassle is it? Will your installed deal with this for you?
That's the brief version of what I used to do. In Wisconsin, we were generally looking at a 15-20 year payback for the better sites. The cost of panels has dropped radically - like by a factor of 3 in 8 years. I'm hearing that in good locations like the southwest payback can be as quick as 7-10 years. If I were younger and building a house, I'd probably go totally off grid with battery storage and a backup generator, mostly to smite the local utility.