Personal Consumer Issues • Another 'should I get solar' question

Hi. Thanks again for all of the previous input. I now have 2 (fairly similar) proposals:

1. cash price of about $41k, $29k after incentives. Approx. 14kW system with approx. 14,500 kWh

2. cash price of about $45k, $32k after incentives. slightly smaller system of 11.9kW generating 13,908 kWh (+$11k net if I want a battery)

These are not all that similar. One is priced at $2.92/W and the other is priced at $3.78/W, almost 30% more. So probably let's eliminate the second proposal, unless it has some feature that seems crucial to you.

January and February of this year were around 50% higher than Jan/Feb of last year, due mostly to increase rates. Not sure if it's fair to assume a 50% increase for the whole year, but if we did, that would be around $440/month and $5,300 for the year (vs. 2023). If that holds true, then I would definitely be leaning towards paying $30k cash for solar. However, based on historical pricing of closer to $3,500/year (or less), I'm not sure I'd want to pay $30k cash for a system.

At 5% growth/year, $30k would grow to $100k after 25 years ($70k earnings).
At 7% it would grow to $163k ($133k of earnings)

If I buy solar with that $30k, I would save somewhere between $3,500/year ($88k over 25 years) and maybe $5,500 year ($138k), or I guess more since the 3,500 and 5,500 would, in theory, go up over time. So, as I type this, maybe it actually does make sense to proceed ahead, especially since what I've just written doesn't factor in making the roof last longer and possibly increasing the value of the house.

Hmm... I keep going back and forth on this.

When you're doing the "opportunity cost" calculations, remember to reinvest the yearly savings, as they will also grow. For example, you correctly pointed out that $30K spent up front would grow to $100K after 25 years at 5% interest, but you forgot to consider that the $3500 you receive back in the first year would grow to almost $12K by the end of the period.

If you do in fact save $3500/year and the panels last for 20 years (pessimistic assumption), that's actually a 10% rate of return. At $5,500/year it would be 17%. I'm not sure what return you normally require of your investments, but these both look pretty decent to me, even considering the illiquidity.

The most important question is how much you will in fact save. You need to know your net metering rules, as they will have a significant impact.

Statistics: Posted by newbie003 — Mon Mar 18, 2024 9:42 am — Replies 33 — Views 2957