Quote:
Originally Posted by tscmedlake
Most of these “payback” considerations fail to take into account the value that a solar panel system adds to the home. In Florida, it generally is considered to add 4% to the total value of the home. This may vary based on the age of the system and size of the home but most systems have a 25 year warranty. Since Florida only has net metering, you can only break even at the end of the year so it makes sense to size your system as close to your needs as possible. On a larger, fully electric house it can easily pay for itself in under 10 years, If you are thinking of selling in under 5 years, it probably does not make sense. It also does not make sense if you will need to replace your roof in under 10 years so it is best to install on a newer roof. You will also make the most power if you have a south facing exposure for the panels. Some quick math based on a 20kw system and a $600,000 home assuming you sell the house in 10 years.
Cost of the system: $50,000 (this includes battery back-up)
Tax Credit: $15,000
Net Cost: $35,000
Annual Power Generation: $3,500
Power Generation over 10 years $35,000 (break-even with no value add to the home)
Value add to a $600,000 home at 4%: $24,000
So if you are keeping the house for 10 years it will definitely pay for it self. If you factor the 4% value add into the equation, it can pay for itself in under 5 years. Obviously your mileage may vary but those are real numbers. Hope that helps.
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A few points:
1. You did not include the time value of money. The $35,000 initial cost, invested at 5 percent for 10 years would generate $17,500 in income.
2. Many people in The Villages spend less than $3,500 on electricity per year. My electricity cost is only about $1,200 per year.
3. No small contractor can possibly service a 25-year warranty. It is unrealistic. They probably won't even be in business in 25 years.
4. I don't agree that the value of the house will be increased, especially after 10 years, when the roof will soon need to be replaced, and which will require a solar contractor to remove and re-install the solar panels at a cost of about $4,000-$5,000. I don't think a homebuyer will pay an extra $24,000 for a 10-year old solar system. Most people don't want one at all.