Solar payoff....worth it?

[Mach1E]

Right, cash has never funded these, has it?

Yes, nerds got smart and made up 6,500 fake currencies and convinced people to pay real cash money for their fake money.

This will end eventually and end badly for most people. Especially those that got in late.

But those early nerds* be fine with their waterfront mansions driving their Ferraris.

*not an insult. Nerds are my people.

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[Mach1E]

if you got Premium panels (with a true 25 year parts and labor production warranty, as opposed to many that have a 25 yr degradation rate warranty, but only 10 years on production in the fine print)... regardless when you sell your home, the minimum total value of the panels if utility rate never went up is determined by the 25 year warrantied production value.... 25 * $795 = $19890
... and the panels usually have a 40 yr 'design life' so likely to keep going, but not warranteed.

I wanted to reply specifically to this point.

This “value” is the only value of the panels after 25 years.

After 25 yrs (if they die right when the warranty runs out), you would have invested $10k and got $20k back.

So you doubled your money after 25 yrs. We are back to a 3% return again.

Now if they last 30 yrs? It’s close to 4%. 40 years? Close to 5%.

But you (and the panels) will be long dead before you hit an 8% return.

 

[dtbaker61]

This “value” is the only value of the panels after 25 years.

no, there is annual value. the amount you don't pay the utility is annual ROI.
$795 savings dividend/$10000 net investment = 7.95% ROI

After 25 yrs (if they die right when the warranty runs out), you would have invested $10k and got $20k back.
So you doubled your money after 25 yrs. We are back to a 3% return again.

I don't know what kind of math you think you are doing, but to me if you invest $10k, get $20k back, and still have an operational system, thats a 200% return over 25 years, or an average or 8% annually. Ignoring inflation, escalation of utility rates, and likely production past 25 year warranty.

 

[DYohn]

Also, a point that has been made but which deserves to be clarified, solar PV panels do not just stop working after a certain amount f time. The 25 year expected lifetime given for most silicon or thin film panels is based on still achieving 80% of rated output, and it is a statistical average. Some will output 80% much longer, some will lose output much sooner. Some of them drop off with steep output declines, others with much more gentle slopes. But NONE of them will just stop working unless they are damaged. There is no published data on the ultimate life of PV panels, but some manufacturers have done simulations showing 50% output at 50 years. So they are likely to last a lot longer than 25 years, it's just that the output drops off.

By the way I have purchased a few used panels @ 5-years used and their cost is significantly less than new (like $250 per panel VS $400.) I'll take that savings, thanks.

 

[Mach1E]

no, there is annual value. the amount you don't pay the utility is annual ROI.
$795 savings dividend/$10000 net investment = 7.95% ROI



I don't know what kind of math you think you are doing, but to me if you invest $10k, get $20k back, and still have an operational system, thats a 200% return over 25 years, or an average or 8% annually. Ignoring inflation, escalation of utility rates, and likely production past 25 year warranty.

I’ve explained the math, it’s the simple financial formula for rate of return. Probably the first thing they teach in a finance course.

I think this is the issue, you’re just simply using the wrong formula.

I posted the ROI formula before, but at this point I think you’re just going to have to either buy/download a financial calculator or Google one.

Inputs are present value, future value, payments, periods and solve for I (interest).

If you invest $10k and get $795/yr for 25 years, your return is 6.17% not 8%. You’re completely ignoring how payments and compounding interest work.

Here is a screenshot from the financial calculator. You can’t argue with the calculator (or apparently you can).

And you may ask “why is it 6% and not the 3% you said before?”

It’s because we’re talking about 2 different calculations. Investing 10k today and getting 20k in 25 yrs (like a zero coupon bond or loan investment) isn’t as good as annual payments. The 6.17 is more accurate for this example. I was trying to keep it simple before based on your minimum value of the future payments point.

 

[Mach1E]

While we are deep into math class. I’ve referenced the rule of 72 a few times. Here is how it works:

Divide the interest rate into 72 and it gives you the rough number of years to “double your money.”

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