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I entered an address. It said $14K savings for 20 years. It takes $15K to install solar roof. So break even is like 20 years - which is half the productive life

I entered an address. It said $14K savings for 20 years. It takes $15K to install solar roof. So break even is like 20 years - which is half the productive life time. It doesn't motivate me to install Solar panels.

fastest963 4y ago
You also get 30% back in the form of a tax credit when you purchase solar. So that might mean that the cost is only $10k. I'm also not sure if the Sunroof website is just doing straight math based on today's electricity rates or if it assumes some amount of inflation. If the past predicts the future your rates could be 75%+ higher in 20 years making solar much more lucrative.
- edmundsauto 4y ago
  I researched historical rates in San Diego (upcoming solar install prework) and prices have increased an average of 5%/year for 10 years running. This felt like a reasonable assumption to me, although to be cautious I used 3%. Rates will change! Energy doesn’t look like it will get cheaper, especially with EV fleet rollouts. Accounting for planned 2 EV purchases at 10k miles/year, the largest system I can build on my roof has something like $150k savings against <$50k cost over 20 years. That gives a lot of room for unexpected issues and feels like a wise bet to take.
  - the_arun 4y ago
    Yep, I missed counting energy rate increase. Would the output of solar panel degrade over time? Or is it constant?
    - cinntaile 4y ago
      It degrades and the amount of degradation is dependent on the PV technology used, but you can find the percentages online. You should still be at 80+% of the original output by the time you retire your panels (20-30yrs later).
ec109685 4y ago
It depends on what your electricity price is. For our house, it's way higher than the estimate (and they let you bump up the estimate). The cost to put panels on was pretty spot on to the quotes I've received.
rconti 4y ago
Sounds like it worked, then.
Matthias247 4y ago
It might be assuming no energy price increases. Given that energy e.g. increased in many german cities from 30ct/kWh to > 60ct/kWh, it might break even much faster. On the other hand it might however also not include maintenance costs.
- olalonde 4y ago
  In that case, you should probably account for the time value of money and the depreciation of your solar roof. 15,000$ today is worth almost 50,000$ in 20 years at 6% interest rate (long term stock market returns are about 7%). Let's say the solar roof depreciates by half in 20 years and produces 14,000$ worth of electricity. You end up with 14,000$+7,500$=21,500$. Energy cost would have to increase a lot to make the solar roof a wise investment. Also, a quick Google seems to indicate that the inflation adjusted cost of residential energy tends to go down over time (e.g. nominal price goes up, but not as fast as inflation).
  - peter422 4y ago
    Stock market is not guaranteed to gain 7% over the next 20 years, but you can effectively guarantee your electricity usage is probably going to stay the same or go up and can somewhat guarantee the performance of the panels (given the warranties). It also is a useful form of diversification. If you only had $15k, it might not be the best overall investment, but if you have more money than that lying around it probably isn't a bad place to invest some of your money assuming you plan on using lots of electricity over the next 20 years. At some point having all your money in the stock market isn't the best money allocation either.
xyzelement 4y ago
Agree it's not the most exciting (if it was, everyone would have solar.) But there's a bunch of other ways to think about it: you save about a K a year on average. Not a ton but not bad. You are hedged against electricity pricing going up. You are somewhat protecting against electricity outages in your area. I think panels keep your roof cooler. Plus tax benefits.

fastest963 4y ago

You also get 30% back in the form of a tax credit when you purchase solar. So that might mean that the cost is only $10k. I'm also not sure if the Sunroof website is just doing straight math based on today's electricity rates or if it assumes some amount of inflation. If the past predicts the future your rates could be 75%+ higher in 20 years making solar much more lucrative.

edmundsauto 4y ago
I researched historical rates in San Diego (upcoming solar install prework) and prices have increased an average of 5%/year for 10 years running. This felt like a reasonable assumption to me, although to be cautious I used 3%. Rates will change! Energy doesn’t look like it will get cheaper, especially with EV fleet rollouts. Accounting for planned 2 EV purchases at 10k miles/year, the largest system I can build on my roof has something like $150k savings against <$50k cost over 20 years. That gives a lot of room for unexpected issues and feels like a wise bet to take.
- the_arun 4y ago
  Yep, I missed counting energy rate increase. Would the output of solar panel degrade over time? Or is it constant?
  - cinntaile 4y ago
    It degrades and the amount of degradation is dependent on the PV technology used, but you can find the percentages online. You should still be at 80+% of the original output by the time you retire your panels (20-30yrs later).

ec109685 4y ago

It depends on what your electricity price is. For our house, it's way higher than the estimate (and they let you bump up the estimate). The cost to put panels on was pretty spot on to the quotes I've received.

rconti 4y ago

Sounds like it worked, then.

Matthias247 4y ago

It might be assuming no energy price increases. Given that energy e.g. increased in many german cities from 30ct/kWh to > 60ct/kWh, it might break even much faster. On the other hand it might however also not include maintenance costs.

olalonde 4y ago
In that case, you should probably account for the time value of money and the depreciation of your solar roof. 15,000$ today is worth almost 50,000$ in 20 years at 6% interest rate (long term stock market returns are about 7%). Let's say the solar roof depreciates by half in 20 years and produces 14,000$ worth of electricity. You end up with 14,000$+7,500$=21,500$. Energy cost would have to increase a lot to make the solar roof a wise investment. Also, a quick Google seems to indicate that the inflation adjusted cost of residential energy tends to go down over time (e.g. nominal price goes up, but not as fast as inflation).
- peter422 4y ago
  Stock market is not guaranteed to gain 7% over the next 20 years, but you can effectively guarantee your electricity usage is probably going to stay the same or go up and can somewhat guarantee the performance of the panels (given the warranties). It also is a useful form of diversification. If you only had $15k, it might not be the best overall investment, but if you have more money than that lying around it probably isn't a bad place to invest some of your money assuming you plan on using lots of electricity over the next 20 years. At some point having all your money in the stock market isn't the best money allocation either.

xyzelement 4y ago

Agree it's not the most exciting (if it was, everyone would have solar.) But there's a bunch of other ways to think about it: you save about a K a year on average. Not a ton but not bad. You are hedged against electricity pricing going up. You are somewhat protecting against electricity outages in your area. I think panels keep your roof cooler. Plus tax benefits.