As a homeowner who recently installed a Solar PV system on my home, I am constantly asked about my payback. My response has been and continues to be “it made me a wealthier person the day the switch was thrown”. This response flies in the face of what people expect my response to be which is “20 years” or something along those lines.
My response is based on factoring into the economics of my system the effect on my net worth. Now I had to come up with over $46,000 to finance the installation, but received $27,000 in rebates and tax credits and am left with $19,000 “tied up” in the system. Note I consider my cash “tied up” not “gone” which the concept of payback implies. I consider this money tied up in the same sense that cash is tied up in an IRA or in stocks until you sell.
A study from the Department of Energy’s Lawrence Berkeley National Laboratory, which came out in April, discovered that solar panels boosted home prices by approximately $3.90 to $6.40 per watt or $17,000 for a 3,100-watt PV system. Since my system is more than twice that size if I just double that estimation I am, as I stated earlier, a wealthier person from a net worth standpoint. Granted the proof is when I sell which I do not have plans to do, but it is important for someone considering a solar system to think in positive terms about all aspects of the purchase. It is just putting one’s cash to work that while it is “tied up” will return a dividend in the form of monthly energy savings. Again, for me, it has been a more stable and predictable investment than stocks (these days!) in that I get a monthly financial benefit (which equates to about a 5% annual return on my investment which is better than any CD) and all indications are when I sell this investment I will recover more than I put in. This is very similar to a dividend paying stock but with the very important environmental benefits which was the prime driver for my decision. Personally I couldn’t be happier and consider it a solid win-win investment which is rare to find.
In today’s Chicago Tribune an article, Greening your house for a sale, also refers to another recent study that supports the value addition to a home solar panels contribute.
I believe the industry must focus on changing people’s impulse to think “payback” and get them to think in terms of “net worth” and the discussion moves from being somewhat negative to instantly positive.
There is a great class that speaks to this topic, “Greening Real Estate – Appraisal value of green improvements” in Wheeling on November 16th.
