Going Solar, Alternative Investment

[Singuy]

Due to the yearly drop in solar installation cost, I am thinking that going solar maybe a good alternative investment that can yield me a 5% return.


Currently, a 45k system can offset about 250 dollars/month in electricity (3k/year).

This 45k system comes with a 30% federal tax rebate, so total out of pocket will cost me 31.5k. At 3k/year of electric bill saved, I should expect to have my money paid back in 10 years. After 10 years, it's a 10% return/year. So this looks to be a 5% return for me over 20 years, or 7.5% return over 30 years.

Of course the solar cells lose efficiency over time, 10%/20 years so that can eat into my returns.

What do you guys think? Is going solar worth it at current prices?

[LivingAlmostLarge]

at least you live in florida so you'll get enough sun to make energy.

[kork13]

If you in fact live in Florida, another factor is to ensure that your home insurance will cover the solar panels on the event of a hurricane damaging them. Also, the high humidity there will reduce the efficiency of the panels, due to higher cloud coverage & atmospheric haze, plus rainy days will obviously produce less energy, and the rain will also leave residual dirt & such after it dries, so they'll have to be cleaned periodically. Solar panels, in general, are more efficient in dry locations. Not to dissuade you, but want to make sure you're aware.

With that said, if the numbers are in fact as good as you state, it doesn't seem like a bad option. Biggest question is total lifetime. Will they last 10, 20, 30 years? The longer they last beyond the break even on point, the more "worth it" they'll be.

Last note... There is a non-financial side to this... If you're interested in reducing your carbon footprint for environmental reasons, that would reasonably be a justification aside from the finances of it.

[Fishindude77]

Be careful and do the math.
I got a quote for a systems a couple years ago and it was a very long term 20+ year payoff. Pretty silly to make such an investment considering my electric bill only runs about $250 per month.

[disneysteve]

From a strictly financial standpoint (carbon footprint aside), I don't think I would "invest" 32K in something that won't generate any return for at least 10 years.

[rennigade]

A year ago I was checking into solar panels and how much they actually save the consumer. Unless you have your entire roof and all of your yard covered in panels the amount you actually save per month is minimal.

Just go to youtube and search. You'll find videos of people that have them and talk about what the real savings are. Not some fluff article that pushes the solar agenda.

I love the idea of harnessing the sun to power things (the sun isnt expected to burn out for another billion years or so)...until the price of the panels comes waaay down it just doesnt make sense.

[disneysteve]

until the price of the panels comes waaay down it just doesnt make sense.

I haven't researched it in any detail but that's always been my impression.

I've also seen that they are working on incorporating solar panels into building materials like roofing and siding so that you could have solar without adding a system onto the existing roof. If that ever becomes commercially feasible, that would be awesome. Then pretty much every house could have solar power.

[scfr]

Yes, we've researched solar. What prompted us to look in to it was looking at buying an electric car (so thinking about electricity usage going up). We live in Texas so solar is a viable option. We decided it wasn't worth the cost, especially since we don't know how long we will stay in this house.

Have you considered a "partial solar" option? For example, if I had an old electric water heater, I'd be looking in to a solar water heater as an option. Water heaters are pretty big electricity hogs.

[Fishindude77]

May have shared this story before, but I had some interest and got a quote on a system (installed) that would provide solar power equal to my annual electrical usage, I spend about $250-300 per month. Still had to remain hooked to the grid as I would need power after dark and on dark days, but the system was supposed to generate excess on sunny days that would be sold back on the grid off setting my usage. The contractor was not promoting the battery banks, said they were not practical yet.

It was going to require an array of free standing panels 10' x 70' to do this along with a special gear that controls when to feed house and when to put excess out on the grid. Total install cost was about $70,000.

A big part of the sales pitch was that I could take a 30% tax write off on the system due to federal programs in place, and by having this system I would earn "green energy credits" which would be sold to coal fired producers, etc. to help keep them in compliance so they can claim XX% of green energy produced. The contractor said they would set all of this up, help with the tax write off paperwork, etc. After the big tax write off and selling green energy credits, they sold the system as if I would really only have about $45,000 out of pocket going into it. Regardless, I still had to come up with $70,000 to make the initial purchase and even using only $45,000 as the figure it was a 12.5 year payback.

They also really don't know how long this stuff is going to last and how badly the panels will lose production capability over time. Contractor thought the transfer gear would be first to replace at +/-20 years and +/-$10,000 cost.

As you can see, this is all a big federally funded scam. There is no way in the world a solar system like this can stand on it's own and make economic sense without the tax deductions and selling the BS green energy credits. Everyone might not have enough income to take advantage of that big tax deduction either.

Unless they were very cheap, I would never promote rooftop solar systems. As a long time builder I think this could lead to a lot of roof leaks and problems and also make future re-roofing unbearably expensive. If you don't have enough real estate to ground mount, I would not consider it.

Having said al of that ....... Get one of these systems down to $25-30,000 and I'd seriously consider it.

[bjl584]

I looked into it, but it costs too much up front and doesn't generate enough electricity to make it worth it. In my case, it would take decades for it to pay for itself. A windmill would probably generate more power for me at a lower cost.

[Singuy]

I have set up for some real quotes and will only proceed if I can get what the neighbors got, which is $2.72/watt on the panels installed. This translate to about 250 dollars/month of electricity for a 28.5k system after tax credit (15kw system). I did look into solar a few years ago and the cost was double of what it is today..so now I think it's making more sense. Most companies come with a 20 year warranty on the panels, but I'm not sure on the entire system.

The rain/dust accumulation is a concern, and I do need to get an umbrella insurance that covers up to 1mil with any systems bigger than 11kw..which is a few bucks more per month(according to my neighbors).

So far, the 15kw neighbor is generating between 1600-1900kwh per month during our rainy hot summer days. His system is new so I'm not sure about future efficiency. 1800kwh costs about 275 dollars in electricity here in FL. The utility company pays back to you at a 1:1 ratio if you produce beyond what you use.

We will end up getting the entire deduction since we are paying over 70k/year in taxes.

Overall, if I can get a 15kw system for under 30k after tax credits then it's a go. A system like this used to cost 60-70k just 3 years ago.

[Singuy]

From a strictly financial standpoint (carbon footprint aside), I don't think I would "invest" 32K in something that won't generate any return for at least 10 years.

Well you can think of it this way..in 10 years, the system you were going to put on your roof was going to be paid for if you invested or not since electricity is a mandatory cost of living.

Lets just say you pay 3000/year on electric cost/year. Think of this number as interest, and you need to continue to pay this because that 32k is owed money.

[Spiffster]

I have a 4.96kW system that was installed seven years ago.
IIRC I spent around $13k out of pocket when the federal (30%) rebate and utility company rebate where taken into account. I think it was an OK investment thanks to the utility company (xcel) pitching in for a third of the cost. Without that extra subsidy, Im not sure we would have bothered. But these days, if you have the capability and knowhow to pull permits, and install yourself, you can achieve positive ROI fairly quickly.

Check out:

https://www.civicsolar.com/

A quick run through that site and I pieced together a comparable system to what I have for around $8k! Thats with Enphase Micro-Inverters (way better than string) too.

Before my wife and I had gotten an EV (RAV4EV and Volt) our electric bill (averaged throughout the year) was around $0. Now its roughly $90/mo (averaged) with both of our daily commutes at around 40 miles.

The moral of the story is, if you can install yourself, its actually a decent investment.

Another option is to have SolarCity (Tesla) install for $0 and then you simply pay them for electricity that the panels generate. After 25 years, I think you own them IIRC.

[Singuy]

I have a 4.96kW system that was installed seven years ago.
IIRC I spent around $13k out of pocket when the federal (30%) rebate and utility company rebate where taken into account. I think it was an OK investment thanks to the utility company (xcel) pitching in for a third of the cost. Without that extra subsidy, Im not sure we would have bothered. But these days, if you have the capability and knowhow to pull permits, and install yourself, you can achieve positive ROI fairly quickly.

Check out:

https://www.civicsolar.com/

A quick run through that site and I pieced together a comparable system to what I have for around $8k! Thats with Enphase Micro-Inverters (way better than string) too.

Before my wife and I had gotten an EV (RAV4EV and Volt) our electric bill (averaged throughout the year) was around $0. Now its roughly $90/mo (averaged) with both of our daily commutes at around 40 miles.

The moral of the story is, if you can install yourself, its actually a decent investment.

Another option is to have SolarCity (Tesla) install for $0 and then you simply pay them for electricity that the panels generate. After 25 years, I think you own them IIRC.

I hear everywhere that the SolarCity method(which is now widely adopted by almost every solar panel company) is a scam. The 0 dollar/pay them electric cost is leasing the panels. You will never own the panels..and it creates all sorts of problems when you try to sell your house with panels that are not owned by you on your roof.

From what I can tell, it's go big or go home. Pay cash or bust. Solar loans are around 5-6% interest.

[Spiffster]

I hear everywhere that the SolarCity method(which is now widely adopted by almost every solar panel company) is a scam. The 0 dollar/pay them electric cost is leasing the panels. You will never own the panels..and it creates all sorts of problems when you try to sell your house with panels that are not owned by you on your roof.

From what I can tell, it's go big or go home. Pay cash or bust. Solar loans are around 5-6% interest.

IDK, there are a few people I know that have went with SolarCity, and they seem happy with it. Yes, it is basically a lease, but you can actually buy them out if you chose to do so. I would prob just finance them too.

Seems installers add quite a bit to the cost... not that installation is an easy (or even safe) task though.

I work with an electrical engineer that told me he could have just helped me install them myself. If I move I may just take him up on that offer. Panels, inverters, and racking equipment appear to have gone WAY down in price since I got my system installed.