if there ever was a roof that was perfectly suited to installing solar panels, it is our roof. its pretty much the poster child roof for solar power.
we’ve been thinking about installing solar panels. we’ve been doing lots of math. and we’ve decided to do it. and then we’ve decided not to do it. and then we’ve decided to do it again. and then we’ve decided not to. see a pattern?
yeah.
i will let you into my head and tell you the thought process i have gone through with this whole decision/indecision.
when we first seriously started discussing it, i imagined we would be able to go off the grid. i said, how cool would it be to not have a power outage? how cool would it be to not have to wonder and worry about the price of electricity? how cool would it be if we could even put in electric heaters and have free heat all winter? how cool would it be to be awesome and be producers instead of consumers? pretty darn.
but. {there’s a but…}
here is how it really works. {oh, where do i start?}
first of all, when you put in solar panels, you connect yourself to the city power supply and send in the electricity that your solar panels are generating. the power company {in our case, our city} then gives you a credit for that electricity toward your power bill. so, no, we would not actually be off the grid. and, no, we would not escape the effects of power outages. {boo.}
additionally, we have a special thing {well, not so special i suppose because everyone has this} called a breaker {at least i think that’s what it is called, but doesn’t change the story...} through which the electricity must pass. and this “breaker” has a certain capacity, and that limits the amount of electricity we could generate from our rooftop. so even though we have the room on our roof for close to 50 panels, our “breaker” can only handle 32. according to our calculations, that is not enough to cover all of the electricity we use. so our electricity would not be free, we would still use more than we produce and have to purchase the difference from the power company. {boo again.}
on the plus side, we would pay much much less for electricity. {more math on that coming up.} here is something i learned about how they charge you for electricity. there are tiers. for us, the first 500 watts is a tier. then your next 500 watts is in another more expensive tier. then the next tier costs even more. it may continue from there, but that’s how many tiers show up on my bill. so, if nothing else, we would be only using enough to keep us in the least expensive tier. that’s something.
now we do math.
in case you don’t know, solar panels cost a bundle. a big bundle. right now there are government rebates. the feds will give you a tax credit of 30% of what you spent. these rebates will be available for about 2 ½ more years. your state will most likely have a separate rebate. ours is up to $2000. after the rebates go away, putting in solar panels on your roof is not cost effective. so, if you think you want to do this, you better get on it while the rebates are available.
there are plenty of companies who will install the panels for you. we have had several come over to give us a quote. yowzers. did i mention it costs a bundle? a boat load? boo-coo? of the several quotes we’ve been handed, there was only one company who even came close to making us think about paying them to do it. their price is $7000 more {after rebates} than installing the panels ourselves. this company made a big old deal about how they were giving these away to us and that they would expect us to tell all of our friends all about how awesome they are, because they are trying to get their company into the market and compete with other companies. so even if we did pay them and tell everyone all about it, who knows if they would give you the same “deal.”
that brings us down to installing the panels ourselves. and by “ourselves” i of course mean that the professor will do it.
and… back to the math.
the question now gets trickier. if it costs us ten grand {after rebates} to install our solar panels all by our lonesome on our poster child roof, how long will it take us to break even and get that boat load of money back into our pockets when we aren’t paying for electricity anymore?
i averaged out what we have spent on electricity historically in this house, and adjusted for 3% inflation in energy costs, it would take us roughly 7 years. so in order to break even mathematically, we would need to stay put for at least that long. then and only then would we start to see any actual savings. if we stay in the house for 30 years from now we would then have in our pockets 60 grand that we would have otherwise paid to the electric company. the longer we stay, the more inflation becomes a factor. if we are paying $2000 a year right now on electricity, in 30 years it will be more like $5000.
what’s the likelihood that we don’t move for 30 years? i don’t know...
but wait, there’s plenty more math to do here.
is that the best use of the ten grand?
let’s say that instead of buying solar panels we take that ten grand and throw it into our retirement savings. then we wouldn’t have this big project on our hands where my husband is up on our roof for a month and could fall to his death or dismemberment. what would happen to the money in that scenario? at 12% interest, it would double 4 times over the next 30 years. so we would have 299 grand to add to our retirement.
that is a big jump from the 60 grand in savings.
that’s it, we’re not doing it.
except, how about if we install the solar panels and then take the money we aren’t paying to the electric company each month and instead throw that into our retirement? in 30 years we would have 421 grand. that’s better. but the catch is that we have to absolutely make ourselves invest that money. and we have to live in this house for the next 30 years.
if we moved after 20 years, the number comes down to 390 grand. that is still more than just investing the 10k. and i think 20 years is a reasonable length of time to plan on living here.
if not, and we moved ten years from now, the amount comes down to 295 grand. in that case, we are better off investing 10k into mutual funds right now and moving on with our lives.
to summarize, these are the things we need in order for solar panels to make sense
mathematically and put us ahead of the game with our money:
1. rebates
2. install the panels ourselves
3. do not move for at least 20 years
4. invest the savings. religiously.
if one of these is missing, then it is not worth the trouble.
the math may be different for someone else’s specific situation, but this is where our math leads.
