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Actual Roi On Solar Panels

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Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
So the local paper was trumpeting how cost effective solar was and how someone had spent $100K less rebates to effectively zero out their electric bill. But then it proceeded to cite costs for the typical person. A $15-$17K system would save you...wait for it...$40 a month. So you are looking at a 30 year amortization, maybe 22-25 with some increases in electric costs. But over that time you have maintenance, additional insurance costs to cover the panels, etc., so that the ROI is very minimal.
 

David Thompson

Sophomore Member
Joined
Jul 12, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Did one yesterday, a refi with new solar panels. Owner was very proud, said they had just been installed and only cost $40,000, they should save $2,000+/-/year on electric bills. They asked what value I could give them... I explained paired analysis and said I could only find value for that feature if I could a sale of a similar home that also had solar panels and sold for XX$ more than a home without them.....
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
and only cost $40,000, they should save
@ 6% interest then they make a negative $400 plus depreciation. Assume straight line depreciation of 40 years = $1,000.
So they actually "contribute" nothing in savings. To make a profit, the loan amount would need to be under 2% annually. Alternative Cost of Capital. If you had $40,000 couldn't you get at least 3% on a 40 year bond?

So you are depending upon some bizarre tax scheme and energy credits to "profit" you.

FYI, someone is running around here trying to get solar land leases and the economics of solar power should be pretty poor compared to places where the sun shines more.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
PV factors will decimate the returns.

It seems almost certain that the tech will continue to mature and the costs will continue to come down. The premium you pay in order to bask in the virtue signal factor from a 2017 install will be scant comfort 10 years from now when the costs are halved.
 

leasedfee

Member
Joined
Oct 14, 2007
Professional Status
Certified General Appraiser
State
Colorado
If you have a true economic positive ROI (not counting tax credits/rebates), would not solar panels be the elusive perpetual motion machine? Creating energy in defiance of the First Law of Thermodynamics, i.e., the Law of Conservation of Energy. But I'm not a physicist or an engineer. The best reason for solar -- with the credits/rebates -- is that it gives you independence from the uncertainties of price fluctuations or inflation.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Leasedfee: you are not free from fees, etc. Nevada recently changed the rules on net metering, subsidies, etc, and effectively put the solar panel ndustry out of business.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
ROI is 3%. Which isn't great, but not minimal, but for a 25 year investment isn't bad. [nothing should be construed that I'm supporting spending scarce resources on solar].
 
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