(7 min read)
Today, all I want to do is nudge you into taking a deeper look at solar for your own context by giving you our real-world numbers from the first year of system ownership. I know that’s not a very strong, attention grabbing opening line, but I thought I’d just jump straight to the point and save the psychological warfare for those with something to sell. Maybe you’ve been holding back because you don’t trust the numbers from the company trying to get you to buy their products. I’m not here to sell you anything, so I’ll just give you some basic questions for you to ask, tell you about why it made sense (and is making dollars) for my wife and I, and our results so far.
Some Questions to Ask
Going solar does not make sense in every context. You need to ask:
Do you even have enough sun/roof space to make it worth the investment?
What size system should you get if you have an appropriate space? Do you need to 100% cover your current electric bill?
Are the neighbors or HOA are gonna care? Do you even care if they care?
Should use one of the zero dollar down advertisements to do it (hint: probably not.), finance it, or pay for it out of pocket?
Will it increase the home value? (Depends on the market, but generally ‘yes’.)
How long will it take to “pay for itself?”
Do you understand maintenance? They generally require very little and parts have long warranties, but it IS another system that will require some maintenance, at some point.
Almost all of these are going to be unique to your situation, but let me tell you about ours and why it was one of the first things I did when we got into this house.
Our Situation
Our home looks quaint from the front, but actually has two accessory units on the lower level that we rent out. That means we have our mortgage paid for and we are left to cover the utilities for 3 full sets of appliances and 2 HVAC units. A more ambitious landlord would probably raise the rent to cover the utilities too, but I have a bit of a complicated relationship with the idea of my maximizing return at the cost of other people’s hard work. I prefer to find ways that feel mutually beneficial for my investments (hence founding Soma Realty Investments, LLC), so covering the internet, power, trash, water/gas/sewer bills while I take care of the house and landscaping and the tenants pay the mortgage just feels better to me. Because of the multiple sets of appliances and HVAC units, we have a higher-than-average electricity bill. Reducing cash flow going to utilities seemed like a no-brainer. So how would be pay for it?
All the “no money down solar!” ads make it seem like this could be a good option, but generally speaking you’ll never own the system (which complicates selling your house) and you end up paying the solar company the same (or higher) bill than you would the electric company. I would generally not recommend going that route because it’s predatory marketing and also adds complexity to FutureYou’s life. After deciding the no-money-down approach was terrible, it was down to paying out of pocket or financing. We had just taken on the largest debt I ever intend to have in my life in our first-time homebuyer mortgage, so we weren’t looking to add any more debt. We chose to pay out-of-pocket. We were fortunate enough that we could do that and that our tax bill was going to be pretty high, so taking advantage of the 26% federal credit meant we could effectively save a little over $5100. It was a pretty nice chunk of change to get back on tax day.
The Results So Far
Our 23-panel, 8.395 kWh system is on pace to provide a little over 8 mWh over the first year. Using the average cost of electricity this past year here in VA, that’s more than $1031 dollars saved in our first year. We spent approximately $14500 after taxes and incentives, so if energy prices stayed the same for the next 14 years, we would hit our breakeven point before the end of year 14. From using the US Energy Information Administration's (EIA) website going back to 1960, the average increase per year has been about 2.8%. If that trend holds up, we would be on track to be financially ahead before the end of year 10.
This doesn’t fully cover our electric bill every month, but we do have some months with no bill at all and others that are significantly lower than before. We were limited in south-facing roof space to the 23 panels, and every day the forest on the west side our house cuts the production a little earlier earlier than ideal. While there are ways we could get 100% of our bill eliminated, the value of the trees in shade, water absorption, aesthetics, wild-life and general pleasure aren’t something we want to get mess with. We love trees. Virginia has relatively cheap energy, too, so your savings at these levels could potentially be higher.
On top of the long term financial benefit, reducing the monthly cash-flow in any capacity tends to take pressure off the system, even if it’s only around $90/month. I’ll write more about that in a future post around financial minimalism, but every little bit counts, especially as people who are constantly wrestling with the idea of FIRE. I also get two other, non-financial benefits from this install that also 100% made financial sense for us:
I’m more than offsetting my transportation in CO2 production from my car and
I made a motion to live more in sync with my stated values.
And both of those alone would have made it worth it, to me.