I started this as a comment on Bob Waterstripe’s diary, but as it grew in length I thought it might be useful to make a separate diary with detailed financials to help others considering converting to solar electric.
We recently installed solar and converted our home to (almost) all electric for heat/AC, hot water and stove, plus only EVs. I say “almost” because our home had a radiant hot water heating system, which we connected directly to an electric Air to Water heat pump so we didn’t have to change our existing nice radiant heating system. However in the coldest days (below 18 degrees or so) , we will likely need a boost from the existing propane boiler to stay warm.
I originally did this mainly because I wanted to personally stop using fossil fuels, I’m kind of a nerd who likes the superior EV, and induction tech, and I had the money to put up front so I thought it would be fun. I was hoping not to pay too much more than before in the long run, but wasn’t really worried about the exact savings and timeline to pay back the cost.
What’s been a real surprise to me is just how much money doing this saved us. Our panels are running everything in our home including our EV, and last month alone we generated over 2.6 MegaWatts, just from our modest sized roof (home is 1800 sf with 2 floors) — and this is in New England, not San Diego or Hawaii. We are covering 100% or more of our electric costs even in most of the winter months, and generating thousands of dollars a year overall in excess electricity back to the grid. We can’t get a check from the power company for our excess, but we can sell the excess to our neighbors. My neighbor next door has a large house with a high electric bill, so I directed the power company to send all our excess to him and I charge him 10% less than the power company rate (win-win) for all those clean, locally sourced electrons. With this high performing solar, and all the state and federal credits, plus the income stream from my neighbor, it’s ridiculously favorable financially. Here’s a quick breakdown:
Upfront all-in cost to install 16 KW (annual) of solar panels: $50K
30% rebate from Federal solar tax credit (thank you Joe Biden and Mitch McConnell for the Bipartisan Infrastructure Act, and Dems for the IRA!) : $15K
MA renewable tax credit: $1K
Future MA state credits for solar generation: $13K over 10 years
Net cost for install after tax credits and rebates: $21K
In 12 months our solar panels produced a whopping 18.2 Megawatt hours, which is worth over $6,850/year at current rates in our town!
So in only THREE years after install, I will have paid back the entire install cost! The panels are warranted for 20 years, so years 4-20 actually generate a net profit of over $116K! And inflation and electricity price increases are now our friend, since our profit goes up if the power company raises rates (last year they jumped 43% which would be really annoying if I had to buy their electrons rather than sell them at this rate). And with our EV, we pay nothing for gas, so any inflation of gas prices doesn’t directly affect our home budget.
Obviously these numbers are based on a combination of State, Federal, local factors and YMMV depending on your individual situation, but I’ve been gobsmacked by how profitable this was for our family and thought I’d share it as a reference for other considering doing the same.
*** UPDATE***
WOW — thanks for all the positive comments for my very first diary! I’ve had a lot of questions in the comments for details of our system and about other states, so I thought it would be easier to add some more info in the diary rather than comments:
— Our panels: We have two arrays of a total of 44 Hanwha Q-cells, Model Q Peak Duo-G6 340. My impression is that while they are not the newest and highest efficiency they are very common, reliable, and affordable. The annual production is supposed to be 16K KWh, but I guess we’re getting more than that in practice since our total for the past year is actually 18.2.
- Other states: I can’t speak to other states policies and how they’d effect these numbers. But overall I think the 3 year payoff plus six figure lifetime profit we’re getting is probably on the extreme end. This likely due to my state having very high electric prices, and fairly generous solar incentives. However, with panels that last 20-30 years, a payoff timeline of 5, 7, 10, or even 20 years is still cost saving compared to paying for grid electricity at today’s prices (better if prices go up as they always have. So even if your electric is ½ the cost of mine it’s still a great deal. Of course if those geniuses across the river at MIT get their Fusion reactor going and start cranking out limitless nearly-free fusion energy, then prices could always collapse and make rooftop solar a very bad investment. I’m not worried about this happening before my breakeven point in 18 months, but in 20 years maybe?
- Financing: I paid up front, so I have no experience with financing myself and didn’t include it in the diary, but my state and many others have a lot of low cost loans and options available for solar panels to make this affordable without massive upfront payments. My upfront payment is in no way the only way to do it, and in fact I believe I could have saved money with a low cost solar loan, but didn’t want the extra trouble of the process and payments.
Hope this is helpful.