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The fact that the return is not compounding makes a very large difference here. $16,500 returning 10% of the original principle per year isn’t a great investme

The fact that the return is not compounding makes a very large difference here. $16,500 returning 10% of the original principle per year isn’t a great investment. 25 years you have $41,000 + 25 yr old solar panels. $16,500 returning 10% compounding over 25 years gets you $162,000 + the $16,500 principle. Considering opportunity cost spread evenly over 25 years, those panels cost over $5000 per year. There are plenty of reasons to go solar, but return on investment is not one of them.

dap 4y ago
This is a good point!
- Sankozi 4y ago
  No it is not. It assumes you store money gained under the bed and do not reinvest it in any way.
ninjinxo 4y ago
You're not adjusting for inflation (cash + increases in electricity costs), ambitiously assuming an equivalent 10% return on other investments, or re-investing the amount saved per year in your calculations (that $1650 you save in the first year also compounds to ~$16.25k). Make those fixes and the numbers are much closer.
tdhoot 4y ago
Just take the money you save on electricity and put it into the market...?
deleted 4y ago
[deleted]
mrep 4y ago
You are ignoring investing the savings which if the stock market returns 8% vs the panels at 13%, you would get a 50% higher return with the panels + investing the savings in the stock market vs just the stock market after 30 years. Albeit, it does take 13 years to come out ahead. >>> x = 0 >>> for y in range(0,30): ... x *= 1.08 ... x += 2125 ... print(y, x) ... 0 2125.0 1 4420.0 2 6898.6 3 9575.488000000001 4 12466.527040000003 5 15588.849203200003 6 18960.957139456004 7 22602.833710612485 8 26536.060407461486 9 30783.945240058405 10 35371.66085926308 11 40326.39372800413 12 45677.50522624446 13 51456.705644344016 14 57698.24209589154 15 64439.10146356287 16 71719.2295806479 17 79581.76794709972 18 88073.30938286771 19 97244.17413349713 20 107148.70806417691 21 117845.60470931107 22 129398.25308605596 23 141875.11333294044 24 155350.1223995757 25 169903.13219154175 26 185620.3827668651 27 202595.01338821434 28 220927.6144592715 29 240726.82361601325 >>> x = 16500 >>> for y in range(0,30): ... x *= 1.08 ... print(y, x) ... 0 17820.0 1 19245.600000000002 2 20785.248000000003 3 22448.067840000003 4 24243.913267200005 5 26183.426328576006 6 28278.100434862088 7 30540.348469651057 8 32983.57634722314 9 35622.26245500099 10 38472.04345140108 11 41549.806927513164 12 44873.79148171422 13 48463.69480025137 14 52340.79038427148 15 56528.0536150132 16 61050.29790421426 17 65934.32173655141 18 71209.06747547553 19 76905.79287351358 20 83058.25630339466 21 89702.91680766625 22 96879.15015227956 23 104629.48216446194 24 112999.8407376189 25 122039.82799662842 26 131803.0142363587 27 142347.25537526738 28 153735.0358052888 29 166033.8386697119

dap 4y ago

This is a good point!

Sankozi 4y ago
No it is not. It assumes you store money gained under the bed and do not reinvest it in any way.

ninjinxo 4y ago

You're not adjusting for inflation (cash + increases in electricity costs), ambitiously assuming an equivalent 10% return on other investments, or re-investing the amount saved per year in your calculations (that $1650 you save in the first year also compounds to ~$16.25k). Make those fixes and the numbers are much closer.

tdhoot 4y ago

Just take the money you save on electricity and put it into the market...?

deleted 4y ago

[deleted]

mrep 4y ago

You are ignoring investing the savings which if the stock market returns 8% vs the panels at 13%, you would get a 50% higher return with the panels + investing the savings in the stock market vs just the stock market after 30 years. Albeit, it does take 13 years to come out ahead. >>> x = 0 >>> for y in range(0,30): ... x *= 1.08 ... x += 2125 ... print(y, x) ... 0 2125.0 1 4420.0 2 6898.6 3 9575.488000000001 4 12466.527040000003 5 15588.849203200003 6 18960.957139456004 7 22602.833710612485 8 26536.060407461486 9 30783.945240058405 10 35371.66085926308 11 40326.39372800413 12 45677.50522624446 13 51456.705644344016 14 57698.24209589154 15 64439.10146356287 16 71719.2295806479 17 79581.76794709972 18 88073.30938286771 19 97244.17413349713 20 107148.70806417691 21 117845.60470931107 22 129398.25308605596 23 141875.11333294044 24 155350.1223995757 25 169903.13219154175 26 185620.3827668651 27 202595.01338821434 28 220927.6144592715 29 240726.82361601325 >>> x = 16500 >>> for y in range(0,30): ... x *= 1.08 ... print(y, x) ... 0 17820.0 1 19245.600000000002 2 20785.248000000003 3 22448.067840000003 4 24243.913267200005 5 26183.426328576006 6 28278.100434862088 7 30540.348469651057 8 32983.57634722314 9 35622.26245500099 10 38472.04345140108 11 41549.806927513164 12 44873.79148171422 13 48463.69480025137 14 52340.79038427148 15 56528.0536150132 16 61050.29790421426 17 65934.32173655141 18 71209.06747547553 19 76905.79287351358 20 83058.25630339466 21 89702.91680766625 22 96879.15015227956 23 104629.48216446194 24 112999.8407376189 25 122039.82799662842 26 131803.0142363587 27 142347.25537526738 28 153735.0358052888 29 166033.8386697119