Going Solar Vs Taxable Investments
Low Risk, High Return, Non-Volatile, AND Tax-Free
A typical solar installation, after considering local, state, and federal rebates will pay for itself in 8-12 years. If you are an investor, this is an equivalent of 12.5 – 8.3% return.
In addition, California Solar Rebates can add up to several thousand dollars each year, cutting down pay off time and increasing Return on Investment (ROI). Positive cash flow starts in Year One!
With that said, you still cannot compare a solar system to a typical investment due to being tax-free. In addition, a solar system has zero-risk since the only factor it depends on is the sun.
Simple Solar Investment Payback Formula
This formula gives you a rough estimate of payback time for a grid-tied solar system:
Total System Cost ÷ Value of Electricity Generated ÷ Your Annual Electricity Usage = Payback Time
Solar Panels Increase Home Values
There is some early research showing that adding a solar system to a home can increase its resale value by $15,000 on average, and even more for larger systems.
Contrast this with the leased solar panels that many bigger companies offer, which can actually hurt your home’s resale when potential buyers don’t want to take over an existing lease that hasn’t been fully paid off or can’t qualify for the credit score required.