Solar Basics: Is Solar Power a Good Investment?

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Yes! With proper sizing of your system and smart financing, solar can pay off big time. In addition to adding appraisal value to your home, solar panels will secure your future energy costs. Over a 30 year period this can be equivalent to banking $35,000 or more!

Solar Basics Contents

Top 5 reasons to consider solar energy.
How much does an average residential solar system cost?
Is solar power for my home a good investment?
Is my home and location suitable for solar power?
Who are the major manufacturers of solar equipment?
I'm going solar! How do I get started

Investment Comparisons

Most solar systems pay for themselves in 7-10 years. After that you're making money for 20 or more years to come. Real Goods Solar gives one example of a 3 kW home system, which turns out to perform as a comparable 8.8% stock return. This scenario is based on a very conservative 5% annual energy increase. Many people are predicting a much higher increase in the years to come, so locking in your solar energy could result in a ROI of 10% or more!

Here's an example if you live in California: Your particular situation may differ as rebates and costs and solar outputs change from state to state.

In 11 years or less you will be getting paid double for the energy you produce, (the cost of electricity has gone up 6.7% a year since 1970.)

In 11 years time, your are still producing power for what it cost you when installed your power station, because you have virtually no running or maintenance costs.

Your power station will last at least 25 years - probably up to 35 or even 40 years. So you will get at least 25 years of savings, maybe more.

For an average family home, the stats are:

KW Hours Per Year 12,000
KW Hours per month 1,000
KW Hours per day 33.
Power station Kw Required 6 KW per hour.
Cost per KW installed $5,500
Cost of Solar Power Station $33,000
Solar Energy Grants $15,000
Net Cost 18,000.00

Let's say...

You borrow $18,000 at an average interest rate of 6.00%
Repayment per Month 107.92
Ave Cost Per KW Hour 0.11
Yearly Price Increase 6.00%
Inflation Rate 3.00%

Here is how it adds up:

In the First Year your new power station is saving you $110 a month in electricity.

1000 KW hours * 11c = $110

You are paying 107.92 in interest.

So your 1000 kw hours actually costing 2.08 less a month

By year 10 you are saving $77 a month or $935 a year

Over the 30 life years you actually save $65,000 in power bills or $34,000 in today's money from your power station on top of paying back the $18,000 plus the interest it cost you. '' In other states rebates are not as large but is possible to make savings in less than 2 to 5 years.''

This example was provided on Squidoo - Facts About Solar Energy