Anyway, with one thing and another, I figure our total energy bill is about $1100 less per year than it would be if we didn't have that PV system on our roof.
We installed the system when the Republicans' renewable energy policies were in effect, which meant (big surprise) that businesses could deduct a percentage of their installation from their taxes but homeowners could deduct a percentage up to a (modest) total number of dollars. It's better now: homeowners and businesses get the same deal.
So I figure that we're getting a partially tax free financial return of about 4.4% on our PV system investment. Why tax free? Because we're not generating income; instead we're lowering costs. That's not bad. Plus, it's locked in as long as the price of electricity doesn't drop precipitously. I suppose that's a possibility. Do I hear hysterical laughter at that prospect?
Several times people have asked me "when's the payback?" for my PV system. This was usually asked with a somewhat superior smirk that implied I was stupid for installing the system at all. The implication that something that wouldn't pay for itself in five years or less was a waste of money. Now I've decided that the whole payback question is bogus.
We have to buy electricity anyway. The house is energy efficient (HERS index ~50... we use about 6.3 kW-hr/sq. ft.), so we're not using the PV system to offset a profligate use of energy.
If you were to invest in a bond fund that gave you a 4.4% rate of return that is likely to rise with energy prices, you wouldn't be considered stupid.
Would you?
2 comments:
With an annuity investment you'd get your capital back someday. While it's possible that the solar installtion will still be an asset when it comes time to sell the house, I think that's much more iffy.
But then, I still question the impact of a hybrid :-)
dt
That's a good point re: the annuity investment. Solar energy advocates claim that a PV array on a roof does indeed add a similar value to the sale price, but I sort of doubt that - especially in these times of weak housing markets. It's more likely to me that a nice looking PV array could be enough of a deal sweetener to make a prospective house buyer choose between two, otherwise similar houses, but of course that depends on taste.
Bottom line: Today, PV systems, wind systems, hybrid autos, etc, are less about making money on an investment than they are about encouraging changes that some of us would like to see.
I do, however, think that the cost of PV generated energy is more in line with the true costs of the commodity than the rates we pay to utility companies.
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