Infographic: Solar Beats The Bank, or How Solar Panels could help pay for College

posted by Dave Llorens on September 8th, 2010

Solar Beats The Bank: How Solar Panels could help pay for College


It Sounds Crazy, But It’s True

Here at One Block Off the Grid, we’re constantly striving to demonstrate not only how much money solar can save, but also make for households, so we decided to conduct a little experiment: let’s say you, the homeowner, had $20,000 to invest today. What would happen if you decided to put panels on your roof instead of putting it in the bank? Now bear in mind that, rates of return are different in different areas, so we looked at exactly how this would play out in three different markets: San Francisco, Long Island, and New Jersey. Our conclusion: investing in solar trounced the bank in every city tested.

Method: to approximate the rates of return from going solar, we had you, our homeowner, invest your electricity savings in a bank account with 4 percent interest. If you also live in an area where you can receive money from selling SRECs (Solar Renewable Energy Credits) we had you put that money into an account as well. In the example above, each solar system costs around $20,000 after local rebates and the 30 percent Federal Tax Credit. Let’s take a look at how this plays out financially.

The Bank

If you put the initial savings into an account with 4 percent interest then in 18 years you have $40,516, or $20,516 more than what you started with.

San Francisco

Once you deduct the California rebate and the federal tax credit, $20,000 buys you a 6kw system in SF through 1BOG (all of these scenarios use 1BOG’s group discount), with a monthly electric bill of $147. If every month you invest that $147 in an account with 4% annual interest and factor in electricity rate increases, after 18 years have passed you’ve gotten back your initial investment plus an extra $55,998.

Long Island

Because the rebates are so good in Long Island, our initial savings buys 12.3kW of solar power, with a monthly power bill of $230. When the monthly savings are invested in a bank, after 18 years our Long Island homeowner has made $98,909 more than when they started (they actually have $20,000 + $98,909 because they recouped their initial investment).

New Jersey

New Jersey homes with solar generate SRECs, which can be sold to utilities for lots of cash. Therefore, New Jersey has the best payback of anywhere in the U.S. with your $20,000 savings turning into $118,001 in only 18 years.

By Dave Llorens

Embed the above image on your site Copied!

Facebook Comments

4 Responses to “Infographic: Solar Beats The Bank, or How Solar Panels could help pay for College”

  1. Steve Bean says:

    Our electric bill ranged from $35 to $65 per month over the past year. Why would you encourage someone with a bill of $147 to $230 on average to invest in solar PV instead of higher efficiency lights and appliances and other conservation measures? By reducing demand, the size of the installed system can be smaller as well. I’ll leave it to you to rerun the calculations. The investments we made in efficiency cost far less than $20,000. I suspect that many people are in a situation where they have less than that amount available to work with.

    A solar water heater will likely be our next investment, maybe PV after that.

  2. Steve Bean says:

    Thanks, Shannon. That’s a good list.

    I think it would be interesting to see the calculations for a realistic batch of energy reduction steps, followed by an appropriately sized investment in solar panels, with the remainder (if any) going into a savings account.

  3. Joseph Panzarella-Realtor says:

    This is very true!

Leave a Reply

High electricity bill? We can help.

At One Block Off the Grid, our job is to help homeowners save money and go solar by providing the best options straight from the nation's leading solar providers.

Free Home Solar Quote

Like this? Click the "like" button to share it on Facebook.

Infographic: Solar Beats The Bank, or How Solar Panels could help pay for College

[X] Close

Pin It
Share on Tumblr