georgetg

Of course you are right,
it's clearly a stupid financial decision.

So to recap,

$1800/year to an electric utility -- good.
$1800/year to a bank -- bad

Running my meter backwards, locking in electric rates at 2008 levels and getting a $1000 annual mortgage interest deduction = stupid finacial decision.

I've made plenty "stupid financial decisions," I'm a pilot after all ;-)
Getting a PV solar system isn't one of them...

Making false energy choices based on politics instead of economics on the other hand is...

Cheers
George

jungle

We can all agree on that I think, whether through subsidies or tossing billions to bankrupt business.

Glad your plan worked out for you.

__________________
Just another slave on the Marxist plantation. With the "joint Reptilian-Bavarian Illuminati" crew.

Red Forman

You are paying over $26,000 on a $28,000 loan. If you paid cash or paid it off in 5 years that would be one thing, but 30 years? I also find it amusing you assume I'm basing my comments on political beliefs. A little sensitive are we?

FlyerJosh

I think you're missing the bigger picture. Sure, you're paying a lot in interest. But unless you have the $20-30K in cash to pay for the installation, you're going to have to finance it.

In this case (based on numbers provided) George paid 1800/year in electric bills prior to installing panels. After installing panels, he is paying 1800/month in loans, but zero for electric.

Over 30 years, he ends up paying 54,000. Who knows what the investment does for his property value, but it's probably safe to assume it will increase the value of his home over time.

Now, assume his neighbor (who doesnt have solar and also pays 1800/mo in utilities) chooses not to install solar and continue paying the electric company. Let's also assume that electric rates increase at an average of 1% annually. (In recent years, the have increased at a greater rate nationally).

Over the course of the same period, the neighbor also pays 54,000. However if you include rate increases of 1% annually, the neighbor pays an additional $8600 over the same 30 year period, and at the end of the 30 years has nothing to show for it.

If you make the increases equal to inflation (average rate over past 100 years is 3.25%), the neighbor pays over $35180 more than George.

In recent years, based on what I found in a wall street journal article, average national electrical rate increase has exceeded annual inflation rates.

Maybe a less stupid financial decision than you thought? If you follow the same line of logic, it's smarter to rent your residence than own. Which might be the case in some circumstances, but if you're planning on living in your home for many years to come, an investment in alternative energy might not be a bad choice. As an added bonus, you are no longer dependent on the electrical grid for power during a disaster or rolling blackout. I know first hand how nice it is to have whole home power when nobody else in the neighborhood does (we have a natural gas generator).

I'd definitely consider a solar installation, but I live too far north right now to justify the cost. However if cost comes down, it becomes more and more appealing.

FDXLAG

Again a 30 year mortgage may be a good idea if you are not planning on selling your house or the 28K you borrow equates to to 28K (we will ignore the interest) worth of property value increase and the solar panels are still working at somewhere close to their original efficiency at the 20 year point.

If you like you can subtract the price of the electricity the device produces from your pament or add it to the property value increase. I live in the south and I wont consider it because it is against the rules, they are ugly, and I have no idea how much my home owners insurance will go up to cover it.

KC10 FATboy

There’s a reason the modern age moved on from windmills | Watts Up With That?

Will the winds of change finally blow these eye sores away? | Mail Online

FlyerJosh

Not all solar panels are terribly ugly. I've seen a few really nice installations in FL developments where from the street you can't even tell they are installed. Even when you see the panels, you kind of have to do a double take. It doesn't look quite right, but it doesn't look bad.


Several companies make solar shingles in different models. Here's an example:
DOW POWERHOUSE Solar Shingle

Of course, if the front of your house faces south, then yeah- you're kind of screwed.

KC10 FATboy

Don't you just love these eyesores?

Vulture meets Windmill ... skip to 2min 05sec.

LiveLeak.com - Vulture accident

Winged Wheeler

There are some interesting points being made here. I am a big proponent of energy consumers providing their own energy when it is possible. I like the idea of residential solar set ups and wind turbines--at the owners own expense, of course. I also like the idea of residential/neighborhood natural gas powered units rated for constant use--much cheaper than utility electricity with almost no loss due to line resistance.

I don't think it is impossible that, in the coming age of austerity, tax credits for alternate energy generation will disappear. It is also possible that utilities will no longer be required to purchase power from consumers who have solar and wind installations. I would consider those possibilities, and discount accordingly, if I was considering buying a home.

WW

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Lower Taxes. Less Government. More Freedom.

Winged Wheeler

The only problem with renewables is that they are unpredictable and not always available. Ordinarily systems operators would charge a premium for this since other units must be run simultaneously to back them up. But because of the great desire to get renewables on the grid, systems operators in some regions have been instructed not to add reliability premiums. This has caused some resentment since other suppliers are not rewarded for their reliability and it adds costs to the system. In the Bonneville Power Authority, dispatchers have now been instructed to give preference to wind even if it means that hydroelectric dams must be operated in a way that endangers fish runs.

RealClearEnergy - The Dispatch Curve

__________________
Lower Taxes. Less Government. More Freedom.