Is Solar Too Expensive?

Most people that I have had a conversation with about solar power, and who are still using the electric company for their power needs, seem to give the same reason over and over again as to why solar isn’t a good fit for them.

They’ll say things like:

“I can’t afford it.”

“I’m not staying here long enough to make it worth the investment.” 

“I just don’t have the money to get started.”

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Fortunately, this is almost always untrue, and often it’s another excuse that we give ourselves to resist change.  The fact of the matter is… you are already spending the money. You’re just sending it to the electric company, and we continue to do this because that’s what our parents did, and that’s what their parents did. We don’t really consider that there might be another way.

So if it’s money that you’re already spending, what’s the catch? I decided to take a closer look at the facts and feelings behind the affordability concerns and share the reality of going solar.

I can’t afford it.

You get your electric bill. It’s $150 this month, and that’s a great bill, because it was nice outside most days. You send the money to the electric company, and you don’t really think about it, but what did that $150 get you? The lights came on. The refrigerator worked. You had a fun movie night with friends, and so on.  You consumed the power you needed, and then you settled up a debt to the electric company for consuming said power that they made and let you use.

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If you think about this further however, you realize that you really have nothing to show for the investment that you made. It’s just gone. The power came into your home, did it’s job, and was consumed. You paid for it, but you don’t really have anything to show for it. If you switch to solar power, using a solar system that you own, that $150 goes into you net worth, into your home or business value. It doesn’t just leave your bank in order to invest in something that you can never get back.

The takeaway: You’re already spending the money and nothing tangible comes out of that investment. Solar allows you to get something for those dollars you send out every month.

I’m not staying here long enough to make it worth the investment.

For residential applications,  Berkeley Lab did an independent study to look at the impact of solar on housing market values. The results showed that a house that has no electric bill (i.e., a solar powered home) with a system as small as 3.6 kW has a average home value increase of $15,000 or more than homes that do not have solar. If you would like even more details on this, here is another blog post outlining even more data.

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The key is that you own that solar system, just as you own your home.  You chose not to rent your house, you bought it, and you know that for every month that you pay your mortgage payment, the money you send is going toward property you own. So does the money you put into a solar system. Unfortunately, the money that you invest in the electric company never pays you back.  For every month you invest into a solar system, even if it’s only for a year or two, will equate to thousands of dollars that will come back to you if you do move.

The takeaway: Investing into a solar system, is an investment in your home and raises your home’s value.  

I just don’t have the money to get started.

Oh those up front costs! Most people think they need to wait to have home improvement money set aside to tackle anything that has to do with investing in their home. In many ways this a great strategy, but if you are avoiding solar because of the up front costs of owning a system, you have probably never looked into getting one.  There are no upfront costs!

But wait… Surely there are installation costs, and this “no money up front” tactic is just a trick?!

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Actually, it’s not. Including installation, there is no upfront investment required unless you want to make one. Why? Unlike your car or home, solar is always fully financed. Solar has such a strong lasting value that banks are always more than willing to fully fund them, including their installation, bonded warranty, etc., with no money down, because it’s such a low risk to the investor (i.e., “the bank”).  Solar panels have a strong inherent value to them, and it’s a value that is very reliable. Many bonds, especially long term ones, are backed by the value of some of those big solar farms you see across the country. This is a good investment for you and for the financial institution that is helping you make the investment. It’s a win-win.

The takeaway: Solar is an easy change to make to your home or business, and you don’t have to cough up thousands to do it.

As much as you try to jump around, looking for the latest deal on your power, the bottom line is that the wholesale price keeps rising. In the last ten years when it comes to electricity prices, there has been an increase of +/-25% according to the U.S. Energy Information Administration. The total price per kWh has more than doubled since the 90s.

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The truth, and main takeaway, is that you can’t afford NOT to go solar. Changing how and where you receive power, turns an expense into an asset. It also gives you price stability. You now own your own micro power company. You don’t have to put up with the inevitable rate hikes of 3 to 5% every year. These increases hit your bill so slowly that the electric company hopes that you won’t notice. Or that you’ll just assume you’re using more power, even though most of us are increasingly using less electricity thanks to Energy Star innovations.

With solar power, you’re paying less (with money you will spend anyway) to get more and to increase your net worth. You can definitely afford to go solar!

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