One of the biggest problems for residential solar electricity generation is that it just costs too darn much to install those panels on your roof. Over the next five and ten years this will change significantly as new developments from the labs make it into large-scale production. Eventually houses will be generating all their own electricity using photovoltaics as a matter of course.
But is there a way to think about the cost today that makes the cost even seem reasonable?
Well, if you’re thinking about buying a new car, you should read on. Each year you don’t buy a new car and continue to drive the one that you’ve already paid for, you pays for another year of your solar panels. At the end of the loan period (seven years in my example below), you’re getting free electricity from a system that increases the value of your home and has another 20 years of life at the minimum. If you’d bought a car, in seven years you’d be driving a rapidly depreciating vehicle that you’d probably have to replace soon.
For my house, after rebates, putting up solar panels today would cost about $22,000. This would be a 4kw system, offsetting about 92% of my electric bill, according to the solar power calculator at Clean Power Estimator. With a $3,000 down payment, and using SunPower’s “Smart Financing” with a seven year term, my monthly net cost would be about $250, after subtracting out my electric bill.
So, $22,000 total cost, $3,000 down payment, $250 monthly – that sounds just about exactly like buying a new car, doesn’t it? In fact, if I go to carsdirect.com and price out a new Honda Accord EX, that comes out to $22,372. My current car, a 2000 Honda Accord, is worth $4,000. So I need to finance $18,000. With a four year loan, I’ll be paying about $420 per month.
Netting it out, for each year that I make the decision to buy solar panels versus a new car, I actually save about $170 per month. At the same time, according to the solar power calculator, I eliminate almost four tons of CO2 (worth an additional $320 at the currently accepted value of $80/ton). After seven years, all that electricity will be free to me, for at least the rated life of the panels. And I’ll get most or all of the cost of the panels back when I sell my house. When I sell the new Honda, I’ll get a lot less than I paid for it.
As an additional note, if you’re thinking about buying a new BMW, such as an M3. If you chose a BMW 335i with Sport Package instead, you could put up the solar panels with the difference in cost: 1 BMW M3 = 1 BMW 330i + Sport Package + solar panels. You’d get nearly the same performance – much more than you can effectively use anywhere in the U.S. except on a race track – and you’d offset all the CO2 you’d be generating with your new car.
Definitely let me know if I’ve convinced you to put up solar panels instead of buying a car this year! Or if you have any other comments on this topic – I’d love to hear from you.