When it comes to going solar most people focus on the environmental aspect. At this point nearly, everyone can agree that collecting energy from the sun is more environmentally friendly than fossil fuels. Honestly living in the Southern Adirondack area, acid rain pollution in the area from coal plants in Ohio in the 1950's through 70's as well as fresh water withdrawal is more relevant than clean air to me. However, there are more personal benefits that people do not focus on. In this I will be illustrating the micro-economic benefits of purchasing a solar system and how it benefits individuals and communities.
Investment vs Divestment
Most people have either heard or told a story about when a loaf of bread was a quarter or a brand new Trans Am off the showroom floor was 2 grand. If you were to ask any of those people if they could have locked in the price of bread or milk at those prices, how much more money would they have today, they would respond, A LOT!!! The truth is, we are conditioned to make reoccurring payments for things like energy, cable, phone or etc.. We have just given in to the fact inflation exists and there is nothing we can do because we need these things no matter what. One thing people overlook is the solution. There is something you can do.
When people think of the cost of solar they say it is expensive. In fact it is replacing a bill that you already pay and is actually cheaper. Lets take a look. According to the U.S. Bureau of Labor Statistics, prices for energy were 760.34% higher in 2018 versus 1970. In fact, the average rate of inflation on energy costs is 4.9% per year, while the overall average rate of inflation is 3.9% for the same period. In affect you are losing more purchase power against energy bills than the dollar itself. For someone in 1970 who was paying an energy bill of $25 would being paying $215 today, while that same $25 in 1970 would only be worth $163 today (a $52 difference). Pretty raw deal right? This is essentially why the rich get richer and poor get poorer. They own the assets and we hold the liabilities that pay for their assets. Why not own your energy as an asset rather than hold a monthly reoccurring never ending liability.
The average solar system size in NY is 6 kilowatts. Supposing the system makes 100% of your energy (500KwH per month). Let's take a look at an example.
So as you can see, turning your energy liability into an asset is one of the best investments you can make. Aside from saving tens of thousands of dollars over the long term, since energy inflation rates track 1% per year higher than the dollar, you have an asset that outpaces the dollar. That is why the rich get richer, they bet & hedge against the dollar, and any homeowner that qualifies can do the same thing with Solar and all you need to do is replace a bill (liability) your paying anyway with an asset. Statistically homes with with solar sell faster and for an average of 15% more. If you put the net cost of $8164 into an interest barring instrument at that same 4.9% for 30 years, your return would only be $15,598. With Solar your savings are far greater as you can see above.