Anyone have solar panels on their house?

[Bodhisattva]

This will perhaps be the last major enhancement to my house, but I'm starting to have second thoughts. I'll be talking to several contractors, but the first estimate I received was over $40k. Even with a tax credit (IIRC about $12k), it would still take about 10 years of $0 power bills to recover the investment. Seems like too long a timeline to lay out that much money now. Anyone have any advice on this?

 

[Elefantman]

Seeing how you live in FL, my concern would be how will home owners insurance handle roof and solar panel damage in a storm. I could see them denying a claim because you altered and added weight to the structure. Today, they may say no problem. But in a couple of years they may say we won't cover your roof unless you remove the panels.

 

[Tidewater]

This will perhaps be the last major enhancement to my house, but I'm starting to have second thoughts. I'll be talking to several contractors, but the first estimate I received was over $40k. Even with a tax credit (IIRC about $12k), it would still take about 10 years of $0 power bills to recover the investment. Seems like too long a timeline to lay out that much money now. Anyone have any advice on this?

My son, "First Name Redacted," did it, but honestly for ideological reasons. He wanted to live off the grid as much as possible. In Virginia, the power company has to approve before you set them up and limits how much power generation you can install. You can only install 90% of the power you intended to use on the property.
It was a large expense, but he is reaping the benefits now. Overall, I'm not sure he would do it again. Maybe, but it is not a slam dunk.

 

[Bodhisattva]

Seeing how you live in FL, my concern would be how will home owners insurance handle roof and solar panel damage in a storm. I could see them denying a claim because you altered and added weight to the structure. Today, they may say no problem. But in a couple of years they may say we won't cover your roof unless you remove the panels.

Good advice. Thank you.

 

[Bodhisattva]

My son, "First Name Redacted," did it, but honestly for ideological reasons. He wanted to live off the grid as much as possible. In Virginia, the power company has to approve before you set them up and limits how much power generation you can install. You can only install 90% of the power you intended to use on the property.
It was a large expense, but he is reaping the benefits now. Overall, I'm not sure he would do it again. Maybe, but it is not a slam dunk.

Interesting. I wonder what the justification is for the 90% rule. Here, based on the first estimate, the plan is to produce a little more than you use to sell it back to FPL (Florida Power and Light). Most of that excess is to cover the monthly FPL connection fee. The rest comes back to you yearly as a (very modest) bonus check.

The biggest hurdle for us is that we aren't sure we are going to stay in this house (as much as we love what we have built) for more than 10 years. We are definitely looking at living abroad several months a year; that could start as soon as a few years from now. I may take early retirement in less than two years. My wife wants to keep working (but not as much) and is strongly considering shifting to a travel nurse job to give us even more flexibility with our vacation time. We could very well down-size depending on how much travel we are doing yearly in the near future.

Hmmm. I have to noodle this out for a bit since I don't have a crystal ball to see the future.

 

[crimsonaudio]

My parents did it a few years ago in west Tennessee - they put up 30 panels and had a Tesla Powerwall battery - while the initial estimate was a 10 year payoff they were on pace for the system to pay for itself in just under eight years.

We'll likely do a solar/battery system here once we replace the roof (in a few years).

 

[4Q Basket Case]

A cost that not many people consider -- on any major expenditure, not in any way limited to solar panels -- is opportunity cost.

As in, at 8% a year on average, you could earn $3,200 a year if you put the $40K in the stock market as opposed to something else.

So (ignoring tax impact for a minute) the real cost for the example at hand is not only the $40K initial one-time outlay, but an additional $3.2K per year, every year, in foregone income.

Then the tax considerations come in. Their net effect varies greatly from person to person depending on your specific tax situation and can get complicated.

If you get a $12K income tax credit, the net one time cost becomes $28K. If that results in an additional $12K refund on top of what you would have otherwise gotten, and if you invest it, you still have a net $2,240 opportunity cost ($28K net investment x 8% foregone earnings).

If you would have paid more than $12K in federal taxes otherwise, and now have a $12K tax reduction, you'd need to invest the $12K you would have paid in taxes in order to reap the same partial offset. If you don't do that, the opportunity cost reverts to the original $3,200.

In short, the true calculation isn't simple, and you might want to consult a tax advisor to arrive at the number that applies to your specific circumstances.

I think the technology will eventually get there. But right now, the large upfront outlay makes it really hard for the numbers to work.

You might still do it for other reasons. A pro who knows your personal situation can help you determine your true all-in cost. Once you know that, you can make an informed decision.