DISQUS

Steve · 3 weeks ago

I wonder how much interest you'll all be paying to stretch that over 11 years. I once lived in an apartment complex that not only had us pay the water bill (the water bill was paid by the complex and then billed to all of us based on square footage and number of residents in the unit), which isn't inherently unfair, but the rub was that we got charged $3 bucks or so a month for the service of being billed. That was all so the complex could avoid raising the rent to cover the water bill. This sounds like a similar situation.

ericabiz · 3 weeks ago

"Imagine having $8,000 to spend."

Have you or Flexo run the demographics of Consumerism Commentary readers lately? Last time I talked to him, he estimated that probably half the readers were in a high-income demographic. I'd be curious to see these numbers.

Anyway, I think that would be an easy choice for many who have $8K sitting in a 0.x% interest savings account. (That might well be a majority of CC readers.) I know Boston Gal from bostongals.com installed solar panels last year, so there are other PFbloggers with relevant experience in this area.

-Erica

smithee · 3 weeks ago

I think it's fair to say that our regular readers have their financial houses in order much better than I do.

Flexo · 3 weeks ago

I think it's fair to say the purchase of solar panels is about more than just having $8,000 to spend. It's having $8,000 to spend on something that would be nice but isn't a necessity and would take a long time to recover the cost in energy savings.

ericabiz · 3 weeks ago

Hi Flexo,

I'm not sure about that. $8,000 invested in a savings account returning 0.75% (pretty typical for the "big banks") returns about $60 in a year. I think solar panels pay higher returns than that!

Of course, so would some stocks, corp bonds, and other investments. In this low-yield climate, and with high tax subsidies, solar panels might not be a bad choice. (Of course, that assumes you have no high-interest debt and a well-funded emergency fund.)

-Erica

Flexo · 3 weeks ago

I wouldn't suggest anyone compare returns after the purchase, installation and maintenance of solar panels with the returns of a savings account. With your money in a savings account you have liquidity -- funds (your entire principal, plus interest) are available if needed for something else. Solar panels, which are decidedly not liquid "investments," have different purposes than savings accounts. You give up your principal when you buy something. It's not a choice between solar panels and savings, it's a choice between solar panels and having money available for something else.

Here in New Jersey, for a house with a $100 per month electricity bill prior to solar panel conversion, it would take almost 14 years for you to earn back your principal through energy cost savings (assuming the system's cost is $8,000) if you use the system to provide 50% of your energy usage. (And it's doubtful that's a realistic price here.) If you want to compare, with a savings account you never lost your principal in the first place, *and* you earned interest. In other words, you break even at 14 years with solar panels (unless you sell them) but you come out ahead with a savings account.

I think we both agree that if you have the money to spend solar panels are worth considering, but the fact that a product might save you more than you earn in a savings account right now doesn't make it an automatic "yes."

MoneyProgress · 3 weeks ago

I actually live in Dallas too and use Green Mountain Energy. I also noticed that Oncor just installed these new meters at my apartment complex (went from old analog style to new digital things.) Do you know if this "smart" data is available for me to look at now?

MoneyProgress · 3 weeks ago

I did a little research on my own and it looks like a website to view the information is not available yet :( I wonder how long before that comes online...

Brandon · 3 weeks ago

You have to keep in mind that the $291.72 is all in today's dollars, so it will be worth less in 11 years. Also, you are paying the labor costs for installation and the interest that the power company is paying on this money as they try to pay off the loan they will get to buy the meters.