The question that first arises when one talks of solar PV or photovoltaic arrays is "is it cost effective?" I have to ask in what sense?. Our cars, may not be cost effective as compared to an elephant which runs on peanuts, or a mule. We choose it to be so by comparing apples to apples. We make a list of specifications, how fast it will go, how many it will carry, about the heat and cooling and such.. Likewise with your home. It is unlikely that you will get $150,000 in benefit from the home on the first day so to consider the economics of it we must factor in the convenience, comfort and amortize the cost over the life. So it is with the solar panel system. Why do you want one. What do you expect of it. Why do you want to play.
For me I expect electric power to go to 30 cents in the next few years. Three times the present rate. Along with that, if you read the news, we can expect $6 gasoline. I paid $5.35 for propane last week. If a person can put in a 4KW system for $20,000 and pay it back over 5 years at the end of the loan the 4Kw free power is just gravy. You got something back over the original period.
I also expect the armadillo problem to be as bad or worse. By this I mean that if you look at the number of solar days since the 80's when this was last popular you see that 40 years ago the sunlight for 35 degrees latitude was more like Cincinnati than Denver. Today not so much. I don't know who to blame global warming on but I know an armadillo when I see one.
The bad news is that right now a 4Kw panel is likely to generate only $86 a month in power on average while costing something like $400 a month to pay back the $20,000. Not immediately economically feasible as they say. But in simple terms without factoring in the future value of a present sum or other time value of money we see that the system will need 232 months to pay for itself. But like a home that is paid for in 20 years and has a fifty year life, the solar PV array should live and work at least 50 or 60 years.
Now all this is considering power at the current rate. If you believe that it will stay cheap forever then solar is not for you. But if, like me, the news crawler on FOX about Egypt and China makes you nervous then consider what happens if energy goes up. Consider a not unreasonable factor of three. At 27 cents the panel only takes 77 months to pay for itself leaving a reasonable expectation of 523 additional months of trouble free operation.
The other thing to consider is inflation. We know that stimulus money, borrowed money, and just spending money we don't have is inflationary. It is also reasonable to expect that a solar PV array will actually appreciate in value.
I know this is contrary to what everyone expects. As they become more popular, the price is supposed to come down. And down it will come in absolute dollars but in Obamadollars the price will continue to go up. It just might be a good idea to get some of that gold out of the basement and put it on the roof.
I know this is a lot of numbers when all you wanted me to say was that it would pay for itself in five years. Sorry. The truth however is that you can pay for it in five years with money you earned elsewhere. And like a new car you can enjoy it for the rest of your life if you want. It adds value to our home and as the energy costs keep going up for your neighbors and they don't for you.. You can enjoy that bit of internal smugness too.
For me I expect electric power to go to 30 cents in the next few years. Three times the present rate. Along with that, if you read the news, we can expect $6 gasoline. I paid $5.35 for propane last week. If a person can put in a 4KW system for $20,000 and pay it back over 5 years at the end of the loan the 4Kw free power is just gravy. You got something back over the original period.
I also expect the armadillo problem to be as bad or worse. By this I mean that if you look at the number of solar days since the 80's when this was last popular you see that 40 years ago the sunlight for 35 degrees latitude was more like Cincinnati than Denver. Today not so much. I don't know who to blame global warming on but I know an armadillo when I see one.
The bad news is that right now a 4Kw panel is likely to generate only $86 a month in power on average while costing something like $400 a month to pay back the $20,000. Not immediately economically feasible as they say. But in simple terms without factoring in the future value of a present sum or other time value of money we see that the system will need 232 months to pay for itself. But like a home that is paid for in 20 years and has a fifty year life, the solar PV array should live and work at least 50 or 60 years.
Now all this is considering power at the current rate. If you believe that it will stay cheap forever then solar is not for you. But if, like me, the news crawler on FOX about Egypt and China makes you nervous then consider what happens if energy goes up. Consider a not unreasonable factor of three. At 27 cents the panel only takes 77 months to pay for itself leaving a reasonable expectation of 523 additional months of trouble free operation.
The other thing to consider is inflation. We know that stimulus money, borrowed money, and just spending money we don't have is inflationary. It is also reasonable to expect that a solar PV array will actually appreciate in value.
I know this is contrary to what everyone expects. As they become more popular, the price is supposed to come down. And down it will come in absolute dollars but in Obamadollars the price will continue to go up. It just might be a good idea to get some of that gold out of the basement and put it on the roof.
I know this is a lot of numbers when all you wanted me to say was that it would pay for itself in five years. Sorry. The truth however is that you can pay for it in five years with money you earned elsewhere. And like a new car you can enjoy it for the rest of your life if you want. It adds value to our home and as the energy costs keep going up for your neighbors and they don't for you.. You can enjoy that bit of internal smugness too.
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