While I’m waiting for the solar panels to be installed I’ve been thinking more about the economics of investing in Solar and what the return on my financed investment will be. Here is some information about the Return on Investment (ROI).
2.9 KW SYSTEM in Albuquerque, New Mexico
System Price $20,738
Fed Tax Credit (30%) -$6,221
NM State Tax Credit (10%) -$2,073
Net Effective Purchase Price $12,444
Assumptions:
My 2008 Electric Bill = $552
5% average yearly increase in utility rates
Annual SREC Credit from PNM = $720
Total Payments on $12,444 over 15 years at 6.25% = $19,200
Data:
Return on Investment (ROI) or Rate of return (ROR) is the ratio of money gained on an investment relative to the amount of money invested.
Return on Investment Information (25 Years)
Gain on Investment $27,749
Investment Term: 25 years
Return on Investment: 144.5%
Simple Annualized ROI 5.8%
Another interesting fact that I learned since going solar was that a recent study shows that the average homeowner gets $10 - $25 dollars for every $1 dollar decrease in utility bills. Thus, after my solar panels are installed and successfully tied to the grid, I should see the value of my home increase by $5,520 to $13,800. If going solar adds $10,000 to the price of my home then the Return on Investment would be as follows.
Gain on Investment $37,749
Investment Term: 25 years
Return on Investment: 196.6%
Simple Annualized ROI 7.9%
It looks like I’ll be getting an annualized 6 to 8% interest rate over 25 years on my decision to go solar. This number includes financing charges! Who knew that going solar could be such an amazing investment –both for my wallet and in our future!
For more information on going solar check out "Dear Solar Fred" at www.solarfred.com Solar Fred is very knowledgeable about the solar industry and has several articles to help you determine if solar is right for you.
2.9 KW SYSTEM in Albuquerque, New Mexico
System Price $20,738
Fed Tax Credit (30%) -$6,221
NM State Tax Credit (10%) -$2,073
Net Effective Purchase Price $12,444
Assumptions:
My 2008 Electric Bill = $552
5% average yearly increase in utility rates
Annual SREC Credit from PNM = $720
Total Payments on $12,444 over 15 years at 6.25% = $19,200
Data:
Return on Investment (ROI) or Rate of return (ROR) is the ratio of money gained on an investment relative to the amount of money invested.
Return on Investment Information (25 Years)
Gain on Investment $27,749
Investment Term: 25 years
Return on Investment: 144.5%
Simple Annualized ROI 5.8%
Another interesting fact that I learned since going solar was that a recent study shows that the average homeowner gets $10 - $25 dollars for every $1 dollar decrease in utility bills. Thus, after my solar panels are installed and successfully tied to the grid, I should see the value of my home increase by $5,520 to $13,800. If going solar adds $10,000 to the price of my home then the Return on Investment would be as follows.
Gain on Investment $37,749
Investment Term: 25 years
Return on Investment: 196.6%
Simple Annualized ROI 7.9%
It looks like I’ll be getting an annualized 6 to 8% interest rate over 25 years on my decision to go solar. This number includes financing charges! Who knew that going solar could be such an amazing investment –both for my wallet and in our future!
For more information on going solar check out "Dear Solar Fred" at www.solarfred.com Solar Fred is very knowledgeable about the solar industry and has several articles to help you determine if solar is right for you.
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