“Right now, buying an average-sized, fully-financed solar PV system costs less than electricity from their local utility for 93 percent of single-family homeowners in America’s 50 largest cities, and in most places, is a better investment than many of the stocks that are in their 401(k),” said Jim Kennerly, project manager for the Going Solar in America report. “Nevertheless, most people are unaware that solar is this affordable for people of all walks of life.”
Many customers mistakenly think going solar requires having a lot of sunshine. The report points out that solar’s value to the customer is more about how much grid energy it can offset.
One of the fundamental problems here is that most people in the US have a poor understanding of how to calculate the value of different investment options. High schools, and even colleges, don’t teach basic business math such as calculating net present value. If you can’t calculate the terms of your own investment, you set yourself up to be exploited by the power companies that benefit from your ignorance.
Solar is not just competitive in markets with high electric rates.
It’s no surprise that places with high electricity rates — New York, Boston and several cities in California — claimed some of the top spots on the list. But the study found that solar is also competitive in Kansas City, Atlanta, Charlotte, Milwaukee, Wichita, Columbus and other smaller markets.
That’s because low electricity prices don’t necessarily mean consumers save money. U.S. Energy Information Administration (EIA) data shows that customer in regions with the lowest rates tend to use the most energy and pay the highest bills. For instance, in 2012, the latest year with vetted data, customers in the South Atlantic region paid 11.4 cents per kilowatt-hour on average and $123 for their monthly bill, whereas customers in New England paid 15.7 cents per kilowatt-hour and only $100 on their monthly bill.
The rate/bill comparison is one I have made on The Power Line in the past.
The report also compared an investment in your own solar power with an investment in stocks. Low interest rates and investment returns are a big problem for a lot of small investors. The study shows that in a lot of US cities, investing in your own solar panels is the best way to invest for retirement.
The report finds that for many of America’s 50 largest cities, the net present value of a dollar invested in solar (what the lifetime of the system is worth in today’s dollars) is greater than a dollar invested in the stock market.
In twenty of the 50 cities, customers paying upfront with cash for a 5-kilowatt system will see greater returns than on the stock market over the 25-year life of the system. In 46 of the 50 cities, customers with a fully financed solar project will see better performance than the stock market. Financing over time benefits more people in all cities. San Jose ($23,171), San Francisco ($21,859) and Oakland ($21,839) came out on top.