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Thread: Contemplating having solar panels installed
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Old 10-07-2021, 05:55 PM
retiredguy123 retiredguy123 is offline
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Originally Posted by daniel200 View Post
Unfortunately, the time value of money is about 1.5% in this interest rate environment using long term US bonds as the base. So that calculation is much less important than if US bonds traded at 6%

But, for the current price of electricity in Florida, I do not know of any home solar power with a payback of less than 10 years. And most are much longer than that. My brother in law installed panels up north 5 years ago and will never recover the cost.
I think it is more appropriate to use the time value of money percentage of a diversified portfolio of stocks, bonds, and cash, which is closer to 6 percent, not 1.5 percent. The risk level of the time value calculation should be equal to the risk level of the solar system investment, which is by no means a guaranteed investment. I don't think anyone should be invested in long term bonds. Very risky in this low interest rate environment.