Infographic: Solar Beats The Bank, or 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.
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.
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.
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 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