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My ROI is about 14 years, are there any other hidden savings that could help this make sense?
- Thread starter spooky981
- Start date
In MD, there is a $1,000 grant for going solar (though that would be taxable at the federal level) in addition to the federal credit. If you are looking at Powerwalls, there is up to a $5,000 tax credit, but, since it seems like much of MD does not have time of use rates, I am guessing you are not, or are not factoring PWs into any payback period.
Maryland also has an SREC credit program where buyers (generally utilities) pay you for each MW you generate. The last one I generated sold for $80 ($74.40 net after fees.) Note that the value of the credits is set to decrease over time, but it is another benefit.
There is a law in MD that says that property values for tax purposes cannot factor in solar, so you can at least know property taxes won't rise as a direct result. So the question then is what value, if any, a buyer might place on having solar installed - in theory, the buyer would take the 14-year ROI into account and pay the appropriate amount for what is left (though it does not always work that way in practice.)
Beyond that, I am not aware of any state-wide incentives. There may be county-level ones (somebody mentioned a property tax credit in Prince George's, for example, though it has a multi-year waiting list.)
I do think it is more likely than not over the next decade that we will see energy rates rise faster than inflation, and I am also expecting to see time of use rates come back (utilities in MD are currently running pilot programs with TOU rates.) But that is definitely speculative so hard to factor into an ROI calculation.
There are various studies showing that solar increases the resale value of the home (with solar that was purchased outright; not some goofy lease arrangement). It’s not going to add 100% of its cost to the value of the home but I’ve read that 40 to 50% is not unreasonable. That’s what compelled me to install solar, knowing that I’d come out okay even if I sold my home halfway to my break even point.
Merrill
Merrill
I’m glad your power is cheap, but where does it come from. I did not do solar only based on it ROI I did it to generate power from the sun and not a coal power plant.
henderrj
Active Member
when we added solar here in Washington state our accountant told us that in fact the value of the home goes up more than the amount of the solar at this time. Thus he advised that I go ahead and take the tax credit and put the solar on my house. We are planning to sell in the next few years. The text credit, remember, stays with you, even if you sell the house.
On the "Home value increases with solar on your home", cant really be used as a blanket statement. Like most things real estate, it depends on your location (and not only your state, or city, but your neighborhood). Just like the value of a home is calculated based on "comparable homes in the neighborhood", whether solar increases value and by how much depends on what the buyers in your neighborhood think about solar, in general, and how much value they place on it.
In order to see if it increases the value of a specific home, one should contact a neighborhood realtor in your specific neighborhood. Saying that, however, in general I think solar is not something that has the potential to reduce home value (purchased solar), like leased solar can, or like something like a pool can. A pool (for example) is something that in many areas does not increase home values and actually makes a home less desirable for some buyers.
Anyway, If one is looking to calculate some sort of value to the solar by saying it adds value, contact a local realtor who can tell you what they experience when helping people buy and sell homes in your neighborhood.
Where I am, purchased solar does increase home values by close to (or more than) what it costs you to put it on, especially at teslas rates.
In order to see if it increases the value of a specific home, one should contact a neighborhood realtor in your specific neighborhood. Saying that, however, in general I think solar is not something that has the potential to reduce home value (purchased solar), like leased solar can, or like something like a pool can. A pool (for example) is something that in many areas does not increase home values and actually makes a home less desirable for some buyers.
Anyway, If one is looking to calculate some sort of value to the solar by saying it adds value, contact a local realtor who can tell you what they experience when helping people buy and sell homes in your neighborhood.
Where I am, purchased solar does increase home values by close to (or more than) what it costs you to put it on, especially at teslas rates.
Merrill
Merrill
Yes, I know that just a reference for the OP. Our rates are ridiculous thanks to Pacific Graft and Extortion.
While true there's no coal in California as of 2018 coal was still used for 4% of the state's consumption thanks to imports. California - State Energy Profile Analysis - U.S. Energy Information Administration (EIA).
Merrill
Merrill
Also I find as I get older I want to do what makes me happy, the less time you have left on this planet the more important it is to make it livable for the future generations.
This is why the solar reps I talk to, when ROI's are that large on either solar and or batteries, smart folks do not do them. Now, the but you are going to be green comment, IMO, is well, great if you have money to burn.
I'll just add that there may also be value in a system that's not accounted for in the straightforward payback period calculation, especially with batteries. If you consider the ability of a solar + Powerwall system to bridge power outages, you may be able to assign a chunk of the up-front cost to keeping your power on when the grid goes down. This could considerably shorten the payback period.
charlesj
Active Member
Been through many outages. If I wanted to just do the best bang for the buck, as most do, buy a 500 buck generator, an extension cord. Hook to your refrig. Get some portable lights. Simple, easy cheap. I have family members who did this. Multi fuel generator. Use propane tanks to run in the safest mode. Have gas for backup if needed. Luckily in Calif, power does not go out for long. IN 31 years, worst was once for 4 days.
@jjrandorin is spot on.
I love solar! Anecdote is not data but here is my take, if I was the buyer of property you will not get what you put in for solar from me. That's simply because new solar is still cheaper than old solar. This would be true for purchased or leased. I would calculate how much new solar would cost and adjust the value of the any existing solar.
I tell people these days, know your motivations, it doesn't have to be one. It could be multiple and they can have different weights.
We went through ROI estimates when considering going solar last year - with cheap electricity rates in Texas (at the time, we were paying $.11/KWh).
Based on our initial it looked like break-even was 18-20 years out - a very, very long time!
When our utility notified us they were planning to increase our electric rate by 30% the next year, that reminded us to factor inflation into the projected long term energy costs. When we factored in the projected 2020 electricity rate and then added 3% annual inflation, that brought us down to 11 years for break-even.
Since we live in an area subject to hurricanes - part of the reason we installed our 15.4 KW of solar and 4 PowerWalls was to provide backup power for multiple days during a post-hurricane power outage. If we subtracted out the cost of a whole-home generator, that reduced the break-even down to 9 years.
After running our system for 5 months, our current electric plan (we were able to get a 6 month plan at $.09/KWh) was up for renewal. Based on the actual solar/grid usage using a combination of smart meter data and data from the Tesla app, we projected costs under various electricity plans and determined the best plan for us was a Free Nights plan, providing us free electricity from 9PM to 9AM and paying $.20/KWh between 9AM to 9PM. By using Time-Based Control for our PowerWalls, the system is configured to use solar and PowerWall power as much as possible during the daytime - and we've pushed some usage (pool pumps, EV charging) to night time. The combination has reduced our electricity bill even further, which could shorten our ROI by an additional year or two...
When we made the commitment to go to solar - we knew this would have a large up front cost and take years to make financial sense. Went through a similar total lifetime cost projection for my first Tesla (2012 S P85) which similarly showed a large up front cost, but if I kept the S for close to 100K miles, it would end up costing less than a luxury ICE.
We decided it was worth the longer ROI - and plan to stay in our house for at least 10 years after installing solar - so we should break even by the time we sell the house.
As for how much you'll get for solar in resale price - in the short term, we're not counting on seeing any more than getting credit for installing the equivalent of a whole-home generator ($15-20K). Our realtor advised us to expect quite a few prospective buyers to be reluctant to purchase a home with solar, since there are so few homes with solar in our area so far - and the buyers are concerned about increased maintenance and complexity.
But, we expect that attitude to change long before we sell our house. After we installed our solar, we've seen quite a few installations done in our community - and at some point, solar and battery storage will become a huge positive on home resale values...
And... it's great to see the much lower electric bills each month! Even though our system was sized to provide about 50% of our annual power consumption - using the Free Nights plan, through the first 7 days of November, we used only $.32 of electricity!!!
Based on our initial it looked like break-even was 18-20 years out - a very, very long time!
When our utility notified us they were planning to increase our electric rate by 30% the next year, that reminded us to factor inflation into the projected long term energy costs. When we factored in the projected 2020 electricity rate and then added 3% annual inflation, that brought us down to 11 years for break-even.
Since we live in an area subject to hurricanes - part of the reason we installed our 15.4 KW of solar and 4 PowerWalls was to provide backup power for multiple days during a post-hurricane power outage. If we subtracted out the cost of a whole-home generator, that reduced the break-even down to 9 years.
After running our system for 5 months, our current electric plan (we were able to get a 6 month plan at $.09/KWh) was up for renewal. Based on the actual solar/grid usage using a combination of smart meter data and data from the Tesla app, we projected costs under various electricity plans and determined the best plan for us was a Free Nights plan, providing us free electricity from 9PM to 9AM and paying $.20/KWh between 9AM to 9PM. By using Time-Based Control for our PowerWalls, the system is configured to use solar and PowerWall power as much as possible during the daytime - and we've pushed some usage (pool pumps, EV charging) to night time. The combination has reduced our electricity bill even further, which could shorten our ROI by an additional year or two...
When we made the commitment to go to solar - we knew this would have a large up front cost and take years to make financial sense. Went through a similar total lifetime cost projection for my first Tesla (2012 S P85) which similarly showed a large up front cost, but if I kept the S for close to 100K miles, it would end up costing less than a luxury ICE.
We decided it was worth the longer ROI - and plan to stay in our house for at least 10 years after installing solar - so we should break even by the time we sell the house.
As for how much you'll get for solar in resale price - in the short term, we're not counting on seeing any more than getting credit for installing the equivalent of a whole-home generator ($15-20K). Our realtor advised us to expect quite a few prospective buyers to be reluctant to purchase a home with solar, since there are so few homes with solar in our area so far - and the buyers are concerned about increased maintenance and complexity.
But, we expect that attitude to change long before we sell our house. After we installed our solar, we've seen quite a few installations done in our community - and at some point, solar and battery storage will become a huge positive on home resale values...
And... it's great to see the much lower electric bills each month! Even though our system was sized to provide about 50% of our annual power consumption - using the Free Nights plan, through the first 7 days of November, we used only $.32 of electricity!!!
Also in Texas, North Dallas, with a free nights 7 day, 8pm to 6am plan.
I have a 7500kw system with 2 powerwalls configured for time of use.
My electric bill dropped from 230.00 averaging per month to 15.00.
I calculate my savings as monthly ROI not payoff. If I took the same amount and invested what would the return yield compared to solar.
Solar does not carry the same risk as an equity investment. Payoff means free electricity which nobody gets.
if you have time of use rules, powerwalls can have their own roi.
if instead you have net metering, powerwalls are a convenience with the payoff being backup during power outages.
in both cases pws also allow you to use solar during outages.
in either case you can keep powerwalls out of the panel roi and assess their benefit and value to you (payoff from TOU and/or power during outage) separately
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