I have sitting on my table a very intriguing proposal from a local company to install solar panels on our roof to supplement our electricity. Should I go with it?
There are many important considerations in this decision, but the most significant one for me is what it would be for most people (unless you are an Obama millionaire of billionaire!:), and that is the cost. Let’s focus on the cost factor.
The total purchase price is $47,610. So far it’s a no, right? Hold on. We need to adjust this price for rebates from NYSERDA (New York State Energy Research and Development Authority) and tax credits (not deductions, actual credits which reduce your tax bill dollar-for-dollar) from New York State and the Federal government. Subtract these from your purchase price and the number magically turns into $19,752. That’s $27,858, or a 58% price reduction!
It sounds great, but only so far. The way I think and in my tax bracket, $19,752 is $35,000 of gross income, and I’m not ready to spend that on this.
So now we factor in the energy cost savings. My roof captures full-day sun, and it will be a relatively effective system for our area (after all, this isn’t Florida). The system will store electricity for us, and it will even put excess back onto the grid for others to use, providing us a credit during such times! The analysis shows, based on my current energy usage and a fair rate for electric price inflation, that in 8.5 years my system will have paid for itself. Look at it over a longer period and the system will essentially be “paying me”.
(Editor’s Note: Since this is primarily a political blog, I must ask this question. Taking a pure economic point of view, without tax incentives, this system would take 20 years to pay for itself. This makes for a very interesting debate. Should we be funding with our tax system an energy source that takes 20 years to pay for itself? Especially considering that within that 20 years the system is likely to be obsolete and no longer in operation?)
8.5 year payback has me on the edge. Other considerations come to mind, including: Will this system be obsoleted in just a few years by new technology with twice the efficiency? Will my roof leak? What happens when it’s time to replace my roof? What happens when the panels are covered with snow? Who do I call if the system stops working? Wouldn’t it be nice to go green and reduce my carbon footprint? Is 8.5 years right, or will it be more like 12 years? How long do we plan to stay in this house before moving? How will having 2011-vintage solar panels on my roof effect the market value and sell-ability of my house when it’s time for us to sell? And, most important of all, will my brother-in-law Cyril think I’m turning into a liberal?
My wife and I are still working through our thoughts on this and aren’t leaning one way or another. We’ll do our due diligence and get another quote from a different dealer, we’ll speak with realtors in the area about the value impact of solar, and talk to reference customers. We’ll also read and consider any feedback from my subscribers!
When we make a decision we’ll let you know, and keep you posted along the way.