We had a wonderfully spirited debate about this inside of Google when I was there as Google was putting panels on their parking lots and the question of payback times came up.

Disclosure: I've had 5.2kW of solar panels on my roof since 2001.

You can do the "simple" computation, which is to take the cost of the installed system, add annual maintenance, use the expected generating capacity, multiply by the kWh charge, and then point at the place they cross zero.

The first problem you have with that is the price per kWh is not constant, it is higher during the day (peak) and lower at night, you can choose to use the peak power rate as panels in California generate their rated power during the period the power company considers "peak" time.

The second thing is that panels in the Bay Area generate rated power from about 10AM to 2PM, and depending on conditions some amount before and after that. My panels "come on" when the sun comes up and depending on fog hit their rated power between 9AM and 10AM in the summer, closer to 10AM in the winter (Sun is lower on the horizon).

When we installed the calculation was 5 solar "hours" (peak production) * net capacity (about 4.8kW) to get 24kWH per day of generation (nominal) which matched our nominal daily power usage. In the fall our panels do 18 - 20 per day, in the spring 28 - 32 per day. At $0.20/kWH about $1750 in power per year and about 11 years for the costs to meet at 0 (they were $19,000 installed after rebates and what not).

So that is the "simple" version. Other things we might have considered (but didn't actually)

Had we invested the $19,000 in 2001 in the S&P 500 would we have doubled our money by 2012? Answer nope. Although we're getting close these days.

How much "more" is the resale value of our home with $20,000 of panels on it? $20,000? $0? Hard to tell in the Bay Area because prices are just crazy anyway. We have had a couple of solar equipped houses in the area sell and the realtor that lives across the street seems to thing there is a premium but can't really say if its washed out by changing opinions on the public schools.

Cost of Maintenance? Our panels are "grid tied" which means they push power into the grid when the home is using less than they are producing. Other wise they contribute what they can to the existing house load. So maintenance consists of going up on the roof and hosing them down every 4 - 6 months to removes dust, and trimming a tree in our front yard which would shade them if it got any taller.

AC Costs? We don't have an air conditioner (we insulated the crap out of the house to maximum thermal efficiency) but the panels do cut down significantly on the heat load in the attic. Prior to their installation we had an attic fan that would being cycling the air if it got about 100F in the attic and it would run probably every other day in the summer but runs perhaps 6 to 12 times per summer these days. Not a "cost" but the house is more comfortable.

Carbon Footprint? No even though we've been less responsible (via fossil fuel electricity) for generating CO2 it isn't easy to compute the cost of that and figure out how it contributes to the break even point.

The warranty on the panels is 25 years (although I've mentioned elsewhere that we had to swap one with a Chinese panel as Sharp cannot replace like for like and that would impact the entire system). The inverter warranty was 10 years, they are going strong. So do we run it for another 10 years and then use the money to buy replacement panels? Maybe. I've been considering redoing them now (current generation panels are quite a bit more efficient than the ones I have, so moving most of my current system to a ground mount and replacing the roof panels I could probably get close to the PG&E cut off of 10kW)

Given the lower cost of current panels (especially pre-tariff!) I expect that if they are grid tied they pay back their investment in under 15 years here in the Bay Area. But until I price the replacement system I won't have solid numbers for that.