My last post discussed how solar has come down in price, but is still about 50% more expensive than tradition fossil-fuel electricity. So, I wanted to quickly post my "pro-solar" arguments, especially for those who say its price prohibits its use. And although nobody or almost nobody chooses solar based on economics alone, the latest decreased cost, combining rebates and recent increased federal tax credits, makes possible the argument that solar is now a good long term investment, in strictly economic terms.
So, the solarDweller, pro-solar arguments:
1**It is the cleanest, greenest option available that allows a family to produce all or the majority of its own electricity, helping to majorly reduce emissions of carbon, greenhouse gases and mercury from traditional utility-run power plants. Try producing your own power with a coal power plant on your roof.
2**Your neighbors will think you're cool being so green.
3**Electricity price inflation: your neighbors will be at the mercy of utility electricity prices, which will continue to follow the pattern of increasing by 6% or more per year. Your $16,000 investment works out to about $.22/kWh over the 20 year life of the PV system (see previous post). Although your neighbor is paying $.15/kWh to the utility today, in eight years they'll be paying the same as you are, $.22/kWh; and in 15 years, they'll be paying $.33/kWh. And by the way, as prices go up, the utility pays you that increased price for the solar electricity you sell back to them on the grid. Now who's looking smarter? It pays to be a long-term energy planner!
4**Economic payback: your system is guaranteed to pay for itself between 15 and 20 years, and it probably will be producing electricity up to 25 years, so those last years of production are actually pure profit. The payback time represents a return on your investment of about 4-6% per year. And if you sell your house before that, you can include the future value of the PV panels' electricity production in the resale value of the house. So, strictly on economic terms, solar is a good long term decision. When is the last time your car paid you back 100%?
As for me, the main motivation would be the provided environmental benefits of solar, and that it's something concrete that I can do to help clean the air. I'm also in the category of people willing to pay more for this "better" green energy; but solar only costs "more" for the short term. Long term, I can also now justify making the solar decision because of the predictable return on my investment.
Categories: solar, energy, green, sustainable, EconomicsOfSolar