Quote:
Originally Posted by valuemkt
I'm not particularly a fan of solar, but there are several ways to look at break even:
Energy Cost: Conservative history shows yearly increases of approx 3% - assume no decrease in usage
Resulting Energy Bill - many assume to be zero - but there are daily administrative fees - will they and taxes still be there ?
Performance guarantees of solar company - is your net energy bill guaranteed or estimated - how is it trued up
Cash outlay - that is your quoted cash price less your federal tax credit (and state credit if in an income tax state)
This is cash out of pocket and used to compare the opportunity cost of investing these funds vs paying for the system - if you;re an investing genius you'll use 8 or 10 per cent here.. a mere mortal might use 4 or 5%
Solar company provided financing - beware of setup fees - if none, then do the simple math
financing the net cost above for 15 years or 20 years at rates as low as .99% with NOTHING down. Is it less than your current bill ? \
If it is, even just 20 or 30 dollars a month, look at what it will be in Year 5 or YEAR 10. You will be paying the same finance rate, but your electric bill will have compounded up by at least 3% per year. Much higher savings.
Then you get to make the other judgements. Longevity of company making panels and company doing installations. Are their warranties worth anything ?
Did you call your insurance agent to see what your homeowners carrier thinks about panels on the roof ? Will panels hold up to hail damage ? if not who pays ?
Have fun !
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Not sure where you got the 3 percent annual increase for electricity. The Federal Government data shows that electricity has only increased by about 1.5 percent per year in the last 10 years. When adjusted for inflation, electricity has actually gone down in cost. And, electricity usage continues to go down as appliances, light bulbs, etc., become more energy efficient.
I agree with questioning the value of solar contractor warranties. It is typical for a solar contractor to offer a 25 or 30 year "parts and labor" warranty. That is ridiculous. No contractor installing anything can offer and perform on that type of warranty and stay in business.