Is solar power a good investment?
Updated: Oct 30, 2019
Most people interested in solar power are concerned with two things, the environment and their retirement. If you aren't at least a little worried about our current dependency on fossil fuels and their potential harmful effect to our ecosystem and our children's' future then you're probably in the wrong place. Allocating resources for future safety and sustainability is always a good social investment of course. As they say "An ounce of prevention is worth more than a pound of cure."
Some homeowners often worry about how they will afford the cost of living when they are no longer in the job force. "Will my pension be enough?" Will I be able to afford groceries on my monthly income, what about gas, car insurance, or even my lights... "Will I be able to preserve the groceries and control the house comfortably" they think.
Maybe that's not you, and things aren't as tight for one reason or another and you are able to play offense with your money. Great, so why wouldn't you do your part to help create a more sustainable society while at the same time putting your money back into your own pocket vs. the power companies? It really can be as simple as that.
The Rise of Solar
Currently, over 500 Mega Watts of Solar power has been installed worldwide. That's enough to power 91 million homes. This number jumped considerably in the last decade as technology made solar more cost effective and efficient and continues to do so. In 2008, solar power comprised of just .1% of electricity generation in the US but by 2018 had jumped to 2.3%. Clearly people are starting to catch on to the benefits of solar power. Billionaires such as Bill Gates and Elon Musk have invested in exploring new solar technology and storage solutions. It's no secret, creating a carbon free future is a major concern for some influential people of our time. They are utilizing their resources to develop it more thoroughly so, Kudos to them.
The US Federal government has been offering a 30% tax credit for going solar. This incentive is something very few people have known about up until now, just as it will be decreasing starting in 2020. (Having your system installed before the end of the year can lock in this 30% tax credit) Banks have also started to cater to the solar industry with new more affordable financing options. This means homeowners can potentially invest in solar for $0 up front cost.
About 2% of detached residential homes have solar but this number is expected to increase substantially as states like California implement mandatory minimums for solar on residential homes. Solar Co-ops are beginning to emerge as people take advantage of group pricing and large scale solar projects have also been utilized by investors to deliver lower prices by having larger amounts of people going solar at one time similar to a co-op.
Utility scale projects allow major companies like Google, Apple and Facebook to purchase more of their power from renewable energy source. Something they all have done and continue to do on top of solar storage devices. Solar plus storage, in most cases is more cost effective than a natural gas peaker plant.
Asset vs Liability
Your power bill fluctuates up and down depending on usage, it can also very depending on peak usage hours and then of course, you're subject to the power companies inevitable increases. This can be seen as a liability since it fluctuates and you will never be able to pay off your power bill. At no point is there a financial return for relying exclusively on the power company for power.
When you go solar, you receive a fixed solar energy bill through financing that over time you pay off and own as an asset that produces a valuable resource for your home. If you opt for a backup battery then your investment is even greater since you will now be completely independent from the grid if needed. What is the value of having power after a bad storm? Backup battery or not, having solar on your home allows you to sell your home for more if and when the time comes. It's more beneficial to a potential buyer or potentially, your kids, if the home is something they will get passed down. One of the most important things to understand with our financing options is that we DO NOT place a financial lean on the home or property, just on the equipment itself that can be turned off remotely.
Selling your home with Solar
Homeowners can expect to see an increase in the homes value by an average of $4 per watt as reported by The US Department of Energy's Lawrence Berkeley National Laboratory. So on average a standard 5kw system can increase your homes value by as much as $20,000.
Compare that to remodeling a bathroom, kitchen or even building a garage. The ROI on residential solar is consistently higher than most other home improvements. Who doesn't want lower electric bills and a smaller carbon footprint?
Plus, according to the US Department of Energy, houses with solar spend 50% less time on the market. Time is money, and the faster you can get out and make a move when you have to the better it ends up being on your wallet.
Saving money with Solar
If you choose to finance your system with $0 down, some homeowners can begin to save money as soon as the system starts generating power (within a couple months).
For cash purchases The average payback period for solar power is about 7 years depending on system size and production. Some homeowners will still have a small power bill with connection and/or delivery fees so its important to have your system designed by a professional for optimal production.
Going Solar is a Win Win.
When you go solar, you are making an investment both socially and financially. Why not, what are the downsides of having solar installed by a professional trusted company. Save the planet and save your money.