Aeolus
Well-known member
This "payback time" conversation needs to be framed differently, with the idea that a PV system is an investment, and that you should be looking at the return on that investment in the same way that you would be looking at the return on a bond or some other equity.
Here's how I calculate it.
After rebates and taxes, the cost of my solar system and car charging dock will be around $25,000. The value of my house increases by $25,000, although my property taxes do not increase, so I have really moved a chunk of my money from one asset class into another asset class.
What is the return on this new asset?
If my calculations prove correct, I will be eliminating $150 a month in electric bills and also generating enough electricity to replace the $150 a month I would spend on gas with a 40 mpg car.
That translates into an 14.4% return on my investment, far better than anything else I can earn.
But wait. The $3,600 a year I am earning is equivalent to tax free income.
And it's protected against inflation, because I expect the price of gas and electricity to continue to rise faster than inflation.
So I have an inflation-proof return of 14.4% tax-free.
I just wish I could find more investments like this.
There are some caveats here. At some point, I will have to replace the inverter, just as I have to replace other major appliances, water heater, furnace, etc. I might have to replace the solar panels, but I don't have to duplicate the labor that went to installing the brackets and wiring or the costs for upgrading my electrical service and supply panel. At some point twenty or thirty years from now, I might switch out panels to improve the output of my system. But in my mind, these are now home maintenance costs, rather than some cost that needs to calculated as part of a payback. Does anybody ask what the payback is when you buy a new refrigerator after your old one has died?
And part of the savings comes from using time of use rates where SCE pays me substantially more to generate power during their peak hours than they charge me for power during the super off-peak period when I am charging my car.
) see the increase in resale value of the home deducted from the payback period calculations. Even a partial value to compensate for the fact that you don't know when you will move next would seem to be in order.
