I recently read a great article in the Contra Costa Times’ financial section about solar as a viable investment. The columnist, Steve Butler, compared investing in solar as opposed to other more “traditional” investments, such as money market funds. Spoiler alert: guess which ended up being the better investment? You got it – solar, hands down.
Now, why would that be a surprise to some? Solar has been fighting misconceptions for years, the most common one being that it’s too expensive and will take too long to recoup the initial investment. Not true once you dig a little deeper.
Fortunately, Mr. Butler has provided some numbers for us to work with. His model is based on a rough estimate of a general solar power system, about $30,000, and a comparable investment in a money market fund.
With a money market fund, you might make $300 per year max. Minus about $100 of that for taxes and you’re down to $200 of actual income. Doesn’t sound like that great of a return, does it?
But with solar, instead of concentrating on how much you’ll be shelling out, take a look at what you’ll be making. The $2,500 per year of free electricity you’ll be getting cannot be taxed, so you’ll receive the full value of that $2,500 to be used elsewhere. And since most Californians pay about 35% on their taxes, $2,500 would be like earning an extra $3,750 of additional taxable income. That’s a whopping 13% return. How many guaranteed investments do you know like that, which even include a performance warranty?
The whole point of this comparison is to see the bigger picture. People invest money to make more money – it’s that simple. Investing in solar not only earns you income, it’s also going to increase the value of your home without increasing your property taxes. And it becomes a perfect trifecta when you throw in the fact that it’s an environmentally responsible decision.
This has been one of the messages of The Solar Company for the past 7 years. We’ve been able to assist our customers in making the smart financial move to invest in solar. It’s an especially rewarding investment for retirees who are generally on a limited income, need control over their expenses, and are planning on riding the Prop 13 train down to the last stop.
If you don’t have solar on your home yet, it’s definitely worth checking into. You’ve got nothing to lose and everything to gain. And if you do have solar, congrats – you’ve made a wise investment for the future.