Solar as an Investment
One of the biggest selling points of solar is its value as a long-term investment. The pitch is simple. Pay a fixed lump sum now, and over time, it will be paid back in savings on rising utility bills. On the surface this makes sense, and before I throw the whole technology under the bus, I will state that, by the numbers I’ve run, it is true that over the life of the system the vast majority of customers will come out ahead financially. However, I have a deeper perspective which comes from being in the field for almost seven years. Let me shine a little more light on the situation.
I’ve compiled a table from my time working exclusively in the solar installation field. It contains sensitive customer information, so unfortunately I can’t share it here. The long and short of it is that on average the investment returns about 2% simple return on investment per year over 25 years. This is after I gave the numbers every benefit of the doubt to make them come out better at the end. Even if I’m half wrong, a 4% return over 25 years is still very mediocre. Much harder to calculate are the other costs associated with tying solar power to the grid. For example, it is a power source that has to be actively managed, since intermittent cloud cover can cause wild fluctuations in power levels on a grid with a lot of solar on it. This instability has a cost associated with it that is passed on to the customer of the serving utilities.
As an investment, this is considerably sub-par. However, the increase in property value, the ability to expand to have a backup power system charged from a fairly reliable source, and the long-term stabilization of monthly expenses do have value that is also hard to calculate, but can be done on a case-by-case basis. All that being said, if I had money I wanted to invest, I personally would not purchase solar panels.
If you want solar panels because you think they have a nice aesthetic, that it’s a cool technology, or you want it as part of a backup system, then by all means we can design a system for those purposes. But I caution people to have good reasons to spend that much money, and to be very careful when talking to salesmen. My goal as an electrician, businessman, and citizen is to treat my neighbors as I would like to be treated, and the beginning of that is telling the truth to the best of my ability. If you have any more questions about how I came to my conclusions or if solar might make more sense in your specific situation, feel free to contact Prosperity Electric at 701-335-6336 or send an email to info@prosperity-electric.net.
