Solar can be viewed as not only free but can actually start MAKING you money from day 1. Let’s look at a scenario to prove the point.
A 5kW solar PV system is a rather typical solar project. For most homes it will produce between 65-85% of the yearly electric needs. A 5kW roof mounted solar PV system facing south with an 8/12 pitched roof will produce 7,222 kWh per year in our area (taken from an actual Pathfinder Analysis Software with minor shading). An average cost for a relatively easy installation is about $8,204 (final cost after incentives and tax credits). National Grid charges ~$.155 per kWh, making the savings on solar $1,119 in year one. With a 5% inflation rate on electric prices and projecting out over 25 years, the savings accumulates to $53,426. This comes out to a 6+ year payback and a 21.2% tax free ROI.
The National average per kWh was $.08 in 2002. Most of my customers are currently paying $.15 in the Capital Region today, some more, some less. When I propose a system to my customers I use a conservative 5% inflation on energy prices. But whether you are paying $.11 to $.19 (the range I have seen in our area), one thing is for sure, it is only going to go up.
Many folks look at payback when thinking solar. But payback is really the wrong way to look at solar. When someone asks me about payback I usually ask them what is their payback on National Grid. Although a 6+ year payback is consider great by most there is an even better way to look at solar. Solar can be FREE from day one AND can actually start making you money immediately.
The person with the 5kW solar system scenario above is paying $93.25 per month ($1,119 / 12) to National Grid or their local electric company for the equivalent amount of electricity that the solar system will produce (601 kWh/month). If the person finances the solar system, their monthly finance charges payment is $83.06 per month ($8,204 @ 4.07% for 10 years). So from day one the person is actually making $10 per month by buying solar. In 5 years the National Grid bill will be up $113 per month (with 5% inflation) but the finance charge will STILL be $83.06. So they will be making $30 per month by buying solar.
By year 10 if they did not do solar they would be paying $145 per month to National Grid and then by year 25 they will be paying a whopping $300 per month. If they did invest in solar, then in year 10 they would have paid their solar system off and have a bunch of money left over from all the savings over the years and into the future. The only “probable” maintenance to the system would be a new inverter sometime after 20 years. Your installation may be more challenging (read, a bit more costly) but still I’ll be glad to show you the numbers for investing in solar will work out very much in your favor.
So looking at solar this way (the right way – IMHO) makes it very difficult for someone NOT to install.