Hasty assessment---three reasons a homeowner should buy solar panels for their home

[GON]

I am under contract to buy a home that has solar on the roof, of which I have to assume the solar loan as part of the transaction. As is very normal, the installer who warrantied the solar went out of business earlier this year. The panels were installed two years ago. I did quite a bit of hasty research into solar panels for single family homes and only came up with three reasons one should buy solar panels. Of note, if solar panels made sense- private equity would be installing solar panel farms on a large scale- they are not.

Reasons:
#1- you think electricity costs will have significant rise year over year, and solar installed at your residence is a way to hedge against possible substantial increases in electricity

#2- you live off grid, and solar panels offer benefits over a diesel generator (such as not having to have diesel delivered)

#3- you live in the bay area, work in high tech, make big bucks, and need something to talk about with people while you wait in line for your Starbucks


Other than those three reasons, I have yet to identify why solar is a good use of an individual's capital. Of note, I am assuming a $47k USD solar loan, likely worth about $15k USD, and no warranty.

 

[Vercingetorix]

 

[oil pan 4]

I got solar panels purely out of spite against my power company that's it.
New Mexico wants to go 100% renewable by 2030 which is a hilariously stupid goal that will never happen. Turns out the utilities only want to go "renewable" if they own the renewables...

 

[AZjeff]

Our average monthly electric bill was $85 last year. For us there's no financial reason that makes sense.

#4- virtue signaling if the solar panels are mounted on the front of the house. Kills the curb appeal but worth it.

Mr. GON, knowing your preference for challenged properties at a discount, if you're underwater on the solar loan is this property in the Rio Grande flood zone backed up to the border fence near El Paso or something similar to make it a value proposition?

 

[daves87rs]

No go for me

 

[fsdork]

#5 - You want to be able to pull from battery storage in the event of a power outage.

Certainly not a good ROI argument, but I like it from a redundancy point of view. Having some MREs, a few cases of bottled water, and various bad guy repellent in the basement don't make sense on a spreadsheet either.

 

[BigTimeTA]

With all geopolitical conflicts sparking in many regions, it's a smart investment to install solar panels along with wind turbines, batteries, etc. Yes, the initial cost is crazy high, but you'll appreciate every kW in the future. Take it or leave it.

 

[Snagglefoot]

I am under contract to buy a home that has solar on the roof, of which I have to assume the solar loan as part of the transaction. As is very normal, the installer who warrantied the solar went out of business earlier this year. The panels were installed two years ago. I did quite a bit of hasty research into solar panels for single family homes and only came up with three reasons one should buy solar panels. Of note, if solar panels made sense- private equity would be installing solar panel farms on a large scale- they are not.

Reasons:
#1- you think electricity costs will have significant rise year over year, and solar installed at your residence is a way to hedge against possible substantial increases in electricity

#2- you live off grid, and solar panels offer benefits over a diesel generator (such as not having to have diesel delivered)

#3- you live in the bay area, work in high tech, make big bucks, and need something to talk about with people while you wait in line for your Starbucks


Other than those three reasons, I have yet to identify why solar is a good use of an individual's capital. Of note, I am assuming a $47k USD solar loan, likely worth about $15k USD, and no warranty.

Add: you think it’s over for the S&P 500 so you would rather invest the money competing against the power company.

 

[mrsilv04]

How many amps is the system rated for?
And one must expect that the system could be over-rated, to make it seem better than it really is.
Dad's girlfriend had solar panels put on the roof, and for what? The system is supposedly rated at 27 amps. That is two electric space heaters running on high, on a good day.
And who knows what that 27 amps will really end up being, after the panels degrade over the next 10 years. 20amps, maybe?

 

[Gyro Gearloose]

Welcome to the exciting and challenging world of the power business.

 

[SHOZ]

Not much home solar installed around me. Mostly farmers with grain operations. The one upscale house that does have a big solar array on the roof is also almost completely shaded by huge oak trees. How's that for virtual signaling?

 

[fdcg27]

The viability of solar depends upon where its located and its installed cost. An area with lots of sunny days and an array installed at a reasonable cost with a state regulatory regime that forces the local utility to purchase excess production from you at a decent rate can make solar viable and even a good investment. Having a Tesla in the garage to store some of the excess power during the daylight hours would also help.
So, it really depends upon a variety of independent variables.
Solar is not the kind of thing private equity likes since building something from the ground up is too risky. Buying control of an existing successful entity using heavy financial leverage and then asset stripping the hapless company is more their shtick.
In the case of a house encumbered with an existing loan for a solar array, I would think that the principle amount of the loan outstanding would reduce the selling price of the house itself by an amount commensurate with the NPV of the outstanding stream of payments discounted at the same rate as a new mortgage to acquire the house.

 

[JeffKeryk]

My #4 - I can do basic arithmetic.

Our town gets 330+ days of sunshine annually.
Electricity costs are some of the highest in the nation.
Gasoline costs are some of the highest in the nation.
I run the AC far more because I am retired and home more of the time.
I got a great deal on the solar project, which included a new roof.
I hate PG&E (electric company).
I now pay $10 to $20 per month (or less), including powering the EV due to NEM2.

If I had it to do over again I would have used Sunrun (bigger company). Infinity Solar is now out of business. I believe NEM3 killed the solar business around here.

 

[JohnnyG]

If the roof needs to be replaced, there will be an extra expense for removal and re-installation of the panels.

Check with homeowners insurance. It may be specific to Florida, but many insurance companies will not ensure a home with solar installed. I think I read long ago that it makes things VERY difficult for firefighters.

California's war on home solar is no joke. I'm GUESSING that JeffKeryk is grandfathered in with his installation. If the net billing goes away (which it probably will) you can look at the system as partially installed. The addition of batteries and inverters will allow some flexibility. Such as backup power or using the battery power during high demand pricing by the power company. It will allow you to be totally off grid at certain times.

 

[Davejam]

I have looked into it and it seems economical if you have the prowess to install yourself.
And installation off the roof seems to make more sense. IE: ground
Payback should be 5-7 years in that case.

 

[alarmguy]

I have looked into it and it seems economical if you have the prowess to install yourself.
And installation off the roof seems to make more sense. IE: ground
Payback should be 5-7 years in that case.

It's a wildcard for someone to self install and not going to happen for most all the population. Areas will require licensed electricians and local electric inspections I would think.
Impossible to post a payback cost on any system except in that one area code. Example, some areas of CA and the country have electric costs as high as 40 cents a kWh and I in the costal Carolinas have 10 cents a kWr
Also ground based systems are significantly more expensive than roof.

Like @Astro14 our energy costs are dirt cheap. We never open our windows and our electric runs from a low of $72 to a high of $152 in the last 12 months. I have posted many of my bills in here. Actually for the month of June my water/sewer bill came within $6 of my electric. Water/sewer $117, electric $123

 

[Sequoiasoon]

I have a PPA lease with Tesla, it was Solar City when I did it. Based on my balanced billing with PSEG prior, even paying the lease, net was $50-60/month in my pocket. Electric costs have gone up and that is now in the $70-80 range.

Tesla will remove and reinstall for free when I need a new roof per contract. They also cover any water leak damage if there is any under the solar panel area.

Not recalling currently the end scenario but when lease is up will be right about when I am looking to retire, sell and move. It was transferable to new owner at my contracted price.

 

[UncleDave]

At 12MW a year to run the house and irrigation, at .53 Per KWH the bill would be 6K+ or approximately 530 a month if divided evenly.

That bill will only ever rise and never go down. This would be unaffordable in retirement.

For a one time installed cost of about 20K I can get an ROI in a bit over 3 year and make that bill go away entirely for about 20 years.

For me it's all about ROI and zero to do with bragging about anything.
The green I care about most is the monthly savings.

 

[JavierH19]

My main concern is increased insurance cost with some getting priced out hard and you have to talk with your insurance first because if they discover that after installation they can and have dropped people's coverage outright without warning.

 

[loneryder]

I am under contract to buy a home that has solar on the roof, of which I have to assume the solar loan as part of the transaction. As is very normal, the installer who warrantied the solar went out of business earlier this year. The panels were installed two years ago. I did quite a bit of hasty research into solar panels for single family homes and only came up with three reasons one should buy solar panels. Of note, if solar panels made sense- private equity would be installing solar panel farms on a large scale- they are not.

Reasons:
#1- you think electricity costs will have significant rise year over year, and solar installed at your residence is a way to hedge against possible substantial increases in electricity

#2- you live off grid, and solar panels offer benefits over a diesel generator (such as not having to have diesel delivered)

#3- you live in the bay area, work in high tech, make big bucks, and need something to talk about with people while you wait in line for your Starbucks


Other than those three reasons, I have yet to identify why solar is a good use of an individual's capital. Of note, I am assuming a $47k USD solar loan, likely worth about $15k USD, and no warranty.

I agree with your thinking, especially #3. I think another reason would be that you are in part of the country that gets lots of sunny days. My neighbor here in WV installed panels on her roof. They told her she'd get a check back from the power co. About 2 years later she got a new roof. Another company came out and removed the panels, metal roof was installed and they came back to install the panels. It turns out that she had been getting nothing from the panels as they weren't hooked up correctly. We were wondering why she hadn't been bragging. WV is not a high sunny day state but they are helping her out on her bill. Power company here doesn't pay for excess electricity.