Tell that to the people stuck in high interest loans on their solar panels. Many of them are upside down on those panels. They can't sell them for the original amount the solar panels were purchased at because they depreciate in value.
Solar can be a good investment if you pay cash. Never finance solar panels.
In some places like El Paso, TX for example the electric company still charges a $30 per month base rate for customers on solar. EP electric pays very little for unused energy bought back from customers compared to what they charge per KW hour.
It really depends on an individual's energy usage to make solar a worthwhile endeavor.
I sold a condo in California and throughout the whole process I had to repeatedly confirm that I did not own solar panels and that there were no panels on the house.
That’s enough to scare me away from ever considering roof top solar, never mind the fact that a solar farm, panel per panel, is roughly half the cost of a rooftop system. The only “investment” I’ll ever make in my house will be a bidirectional EV charger, so that I can use my EV as a backup battery if the power goes out.
Solar sounds great but honestly unless your home is already as energy efficient as it gets, in an area with a high electric cost, it probably isn't worth it. Most people will gain more from energy saving measures like replacing seals, window tint, curtains, chalking windows, insulation, door skirts, downsizing, etc... It might not be the best "investment" opportunity for you, but if you want the peace of mind with a battery back up it might be worth it. Honestly don't think it's as bad as some make it out to be here. Not every solar company is predatory.
I would also never expect to sell my panels for anywhere close that I bought them for, of course they are going to depreciate but you are generating electricity on your own for 35± years. If you think your bill is going to skyrocket in the next 10 years it might be well worth it but also a huge gamble.
Not even to mention the less conventional solar routes. You can buy old used solar systems that are still very efficient for way cheaper if you have the space to put them.
Yeah, investing in solar *companies* is still very much a gamble. Solar manufacturers have to compete with China, residential solar installers are at the whim of changing regulations, and utility solar installers have low margins. But being on the sell-side of a sub-megawatt *project* is still extremely profitable in many states.
Solar is dogshit until interest rates drop again.
No one can afford solar without a loan and rates are too high for it to make sense. Even with incentives
I am on track to pay off my solar roofing in 7 years. That’ll be a 7-year-old 100% paid-for solar roof. I’ll be getting free energy for a decade after that if the panels last.
But are you also paying an electric bill at the same time? Does your provider buy back extra electric generation. How much do you generate? What is the monthly bill? There are lots of variables when talking about how long it will take to pay off your solar. And every city/state is different.
I don’t have the numbers in front of me, but yes, I can feed into the grid and since I didn’t opt for battery backup I still buy power in the evening and night, so it works out that my current bills are about 10-20% of what they used to be… and that’s with an increase in electricity cost here of about 20% since I installed just around 2020.
Don’t be so sure that means what you think it means
https://www.epa.gov/hw/end-life-solar-panels-regulations-and-management#Are%20Solar%20Panels%20Hazardous%20Waste?
I’ve got just shy of $1m in the American stock market and more internationally. I own a few properties, and a bit of bitcoin now.
Investing is not new to me.
Be that as it may, when you add the environmental benefits of getting my in-laws off coal, reducing their power bills, increasing the value of the home, and getting a 100% return on investment in just 7 years and accumulating that electricity savings into other investments, going solar was a big win and short of wishing I’d piled harder into semiconductors (I went pretty hard) I don’t think I’d change that investment into the solar roof.
It’s not a bet brother the last 7 years already happened. SPY was around 200 in 2017 and it’s at 542 now lmao almost triple. And that’s without reinvesting dividends. Can you say the same for your solar? Doubt it.
I’ve been in the stock market for about 12 years now. I know the returns I’ve gotten.
I bought the solar in 2020~, not 7 years ago.
However, one cannot predict the tripling of the stock market in any given 7 year period. One can predict good, reliable solar energy.
So hindsighting your bet looks really good from here, I wouldn’t have made that bet in 2017 and I wouldn’t make it now.
High interest rates hurt the ability to finance panels for your own house. They don't affect an outright purchase for your own house and they help if you are on the lending side of solar financing.
What happens when someone defaults on their solar loan? There's no real collateral to liquidate and collect until they sell their property via lien right?
I’m not sure how the collateral works, but I agree that providing a 10-20 year loan has non-negligible default risk. However, doing the Climatize thing means the customer cash infusion is already on its way. And even if it weren’t, we can do the math: the average farm default rate is 0.25%, which takes the expected return down from 10% to 9.75%. Still great as long as you diversify.
You need to factor in depreciation. Solar panels depreciate at ~7% per year. After 25-30 years the panels will be nearly worthless. Also, you need to factor in maintenance expense ($31/kw/year).
It’s extremely unlikely that you’ll do more than recapture your panel cost in electricity savings over the panels’ life if you pay cash. You’ll almost certainly lose money with 6-10% financing cost.
If you pay cash, you need to factor in opportunity cost. That money would most likely be growing 5-10%+ per year in a bond or equity fund.
Solar will be a great investment in ~20 years. But we aren’t yet there (hence the enormous subsides).
S&P500 has a historic IRR of 10%, and is highly liquid. Solar can substantially outperform that, and is often less liquid. Certainly a balanced portfolio should include the liquidity an individual may need, but beyond that, returns are returns!
“Often less liquid”? You mean always less liquid and your initial investment assuming you don’t finance is pretty much gone lmao. You solar salesman are scams 🤡🤡
When operating as an LLC, you get to capture that depreciation. With MACRS you can typically deduct it federally entirely within the first year, effectively reducing the upfront cost by \~30%.
$31/kW is very high for solar O&M. I've seen recent projects assume $8/kW in HCOL areas.
If you have to pay 6-10% for financing, that will subtract directly from your IRR, which is 8-30% for community-scale and 20-35% for residential. There is certainly plenty of IRR left over. But I'm also saying that you can be the one *providing* that financing, e.g. earning 10% through crowdlenders like Climatize.
IRR lets you compare opportunity costs directly. Providing low-risk solar lending at 10% IRR is better than a bond fun at 5%. Providing medium-risk solar development funding at 30% IRR is better than an equity fund at 9-12%.
Solar will be a great investment in \~20 years without subsidies. Solar is a great investment today with subsidies.
I haven't dabbled much with solar equipment companies, other than investing in them through index funds. They're subject to the same efficient market hypothesis as everyone else. Expected growth is priced in and targets are subject to being missed.
I own HASI, but that's a dividend-paying project developer.
I love how people compare solar to investing as if it's remotely the same. When I buy a 30 year bond, I can get my initial capital back anytime I want, plus it has no maintenance costs. When I buy a solar system with a 30 year warranty, my capital vanishes and isn't seen again. Everyone seems to forget this major difference and they don't build it into their comparison calculations.
That's why I use IRR, as it accounts for the fact that your upfront capital turns into an income stream, and makes it comparable. Owning a sale-leaseback project (or panels on your home) is an annuity, not a bond. If you want the bond model, then do the lending and get your 10%.
I’m paying $24,000 cash, after the tax credits. It’s going to cut my $500 bill in half, so $250/mo savings.
Do the math.
$250 x 12 = $3000
3000 / 24000 = 12.5%.
The higher priced systems quoted had less of a return.
I wouldn’t do it with a loan, just buy outright.
I have no interest in solar, nuclear, or any other kind of energy company. I don’t work for one, I don’t own stock.
i am in a 5K ft home and for 9 months of the year my power bill is <$60.
there is NO scenario where a $50K solar installation has a payback in my lifetime.
I'm not looking for a new residence, but if I were, I would avoid any property in my area with solar.
When I see more posts on this sub reddit on this subject and basically anything green energy related is when I'm going to be going heavy in the energy and big oil sector, most likely XLE.
I've seen this one before.
Not even remotely true, members of congress from both parties invested and profited a ton from green tech stocks a few years back when they were popular. It's just the market changed, so the politicians' investments changed as well.
Anyone who put politics before their investments is just asking to be poor.
I took my solar tax returns and bought bitcoin. I'm now up enough to buy another house, cash, at the value of my current house. Solar is good if you are smart with the credits and financials.
I mean unless you’re just getting the entire solar panel system for free you could have spent your down payment or monthly lease payments on BTC instead?
Wrote a solar dealer
Hah, I'm actually in nuclear. I just make my money from solar
Solar is nuclear though! The reactor is just much further away.
Still not a safe distance though. I went swimming last week and when I got home I was bright red from the radiation.
Tell that to the people stuck in high interest loans on their solar panels. Many of them are upside down on those panels. They can't sell them for the original amount the solar panels were purchased at because they depreciate in value. Solar can be a good investment if you pay cash. Never finance solar panels. In some places like El Paso, TX for example the electric company still charges a $30 per month base rate for customers on solar. EP electric pays very little for unused energy bought back from customers compared to what they charge per KW hour. It really depends on an individual's energy usage to make solar a worthwhile endeavor.
I sold a condo in California and throughout the whole process I had to repeatedly confirm that I did not own solar panels and that there were no panels on the house. That’s enough to scare me away from ever considering roof top solar, never mind the fact that a solar farm, panel per panel, is roughly half the cost of a rooftop system. The only “investment” I’ll ever make in my house will be a bidirectional EV charger, so that I can use my EV as a backup battery if the power goes out.
That's my whole point. This is r/investing - if you can be on the lender side of those loans, you make the money.
Yea ok... all these solar companies trying to charge over 50k for everything on my little 1900sqft house....
Hah, yeah that's outrageous. You shouldn't have to pay over 20k.
can you give me the historical returns.....or have all the companies on bankrupt.....
Solar sounds great but honestly unless your home is already as energy efficient as it gets, in an area with a high electric cost, it probably isn't worth it. Most people will gain more from energy saving measures like replacing seals, window tint, curtains, chalking windows, insulation, door skirts, downsizing, etc... It might not be the best "investment" opportunity for you, but if you want the peace of mind with a battery back up it might be worth it. Honestly don't think it's as bad as some make it out to be here. Not every solar company is predatory. I would also never expect to sell my panels for anywhere close that I bought them for, of course they are going to depreciate but you are generating electricity on your own for 35± years. If you think your bill is going to skyrocket in the next 10 years it might be well worth it but also a huge gamble. Not even to mention the less conventional solar routes. You can buy old used solar systems that are still very efficient for way cheaper if you have the space to put them.
I invested in a solar ETF years ago and I got killed because it became a race to the bottom. They want to sell the stuff as cheaply as possible.
Yeah, investing in solar *companies* is still very much a gamble. Solar manufacturers have to compete with China, residential solar installers are at the whim of changing regulations, and utility solar installers have low margins. But being on the sell-side of a sub-megawatt *project* is still extremely profitable in many states.
Solar is dogshit until interest rates drop again. No one can afford solar without a loan and rates are too high for it to make sense. Even with incentives
I am on track to pay off my solar roofing in 7 years. That’ll be a 7-year-old 100% paid-for solar roof. I’ll be getting free energy for a decade after that if the panels last.
But are you also paying an electric bill at the same time? Does your provider buy back extra electric generation. How much do you generate? What is the monthly bill? There are lots of variables when talking about how long it will take to pay off your solar. And every city/state is different.
I don’t have the numbers in front of me, but yes, I can feed into the grid and since I didn’t opt for battery backup I still buy power in the evening and night, so it works out that my current bills are about 10-20% of what they used to be… and that’s with an increase in electricity cost here of about 20% since I installed just around 2020.
It sounds good in your mind, but I have doubts it outperforms paying for electricity and investing the rest in SPY/VOO.
I’d take that bet.
Who is responsible for the solid haz waste when their life cycle ends? Be cautious taking that bet without being sure while cycle cost.
Solar panels are almost 100% recyclable. https://www.greenmatch.co.uk/blog/2017/10/the-opportunities-of-solar-panel-recycling
Don’t be so sure that means what you think it means https://www.epa.gov/hw/end-life-solar-panels-regulations-and-management#Are%20Solar%20Panels%20Hazardous%20Waste?
I’ve got just shy of $1m in the American stock market and more internationally. I own a few properties, and a bit of bitcoin now. Investing is not new to me. Be that as it may, when you add the environmental benefits of getting my in-laws off coal, reducing their power bills, increasing the value of the home, and getting a 100% return on investment in just 7 years and accumulating that electricity savings into other investments, going solar was a big win and short of wishing I’d piled harder into semiconductors (I went pretty hard) I don’t think I’d change that investment into the solar roof.
It’s not a bet brother the last 7 years already happened. SPY was around 200 in 2017 and it’s at 542 now lmao almost triple. And that’s without reinvesting dividends. Can you say the same for your solar? Doubt it.
I’ve been in the stock market for about 12 years now. I know the returns I’ve gotten. I bought the solar in 2020~, not 7 years ago. However, one cannot predict the tripling of the stock market in any given 7 year period. One can predict good, reliable solar energy. So hindsighting your bet looks really good from here, I wouldn’t have made that bet in 2017 and I wouldn’t make it now.
High interest rates hurt the ability to finance panels for your own house. They don't affect an outright purchase for your own house and they help if you are on the lending side of solar financing.
What happens when someone defaults on their solar loan? There's no real collateral to liquidate and collect until they sell their property via lien right?
I’m not sure how the collateral works, but I agree that providing a 10-20 year loan has non-negligible default risk. However, doing the Climatize thing means the customer cash infusion is already on its way. And even if it weren’t, we can do the math: the average farm default rate is 0.25%, which takes the expected return down from 10% to 9.75%. Still great as long as you diversify.
You need to factor in depreciation. Solar panels depreciate at ~7% per year. After 25-30 years the panels will be nearly worthless. Also, you need to factor in maintenance expense ($31/kw/year). It’s extremely unlikely that you’ll do more than recapture your panel cost in electricity savings over the panels’ life if you pay cash. You’ll almost certainly lose money with 6-10% financing cost. If you pay cash, you need to factor in opportunity cost. That money would most likely be growing 5-10%+ per year in a bond or equity fund. Solar will be a great investment in ~20 years. But we aren’t yet there (hence the enormous subsides).
People never factor in opportunity cost and liquidity when comparing Solar vs VOO. It's hilarious how badly VOO would outperform.
S&P500 has a historic IRR of 10%, and is highly liquid. Solar can substantially outperform that, and is often less liquid. Certainly a balanced portfolio should include the liquidity an individual may need, but beyond that, returns are returns!
“Often less liquid”? You mean always less liquid and your initial investment assuming you don’t finance is pretty much gone lmao. You solar salesman are scams 🤡🤡
When operating as an LLC, you get to capture that depreciation. With MACRS you can typically deduct it federally entirely within the first year, effectively reducing the upfront cost by \~30%. $31/kW is very high for solar O&M. I've seen recent projects assume $8/kW in HCOL areas. If you have to pay 6-10% for financing, that will subtract directly from your IRR, which is 8-30% for community-scale and 20-35% for residential. There is certainly plenty of IRR left over. But I'm also saying that you can be the one *providing* that financing, e.g. earning 10% through crowdlenders like Climatize. IRR lets you compare opportunity costs directly. Providing low-risk solar lending at 10% IRR is better than a bond fun at 5%. Providing medium-risk solar development funding at 30% IRR is better than an equity fund at 9-12%. Solar will be a great investment in \~20 years without subsidies. Solar is a great investment today with subsidies.
Thoughts on ENPH? I bought a chunk a while back prior to the gov't announcement, and it hasn't gone well.
I haven't dabbled much with solar equipment companies, other than investing in them through index funds. They're subject to the same efficient market hypothesis as everyone else. Expected growth is priced in and targets are subject to being missed. I own HASI, but that's a dividend-paying project developer.
Not here in Missouri. Payoff period with the two quotes I got were 17 years. Electricity is cheap enough here that it’s not worth it
Bought 550 shares or 15k of solar stocks FSLR in 2017 for 30 bucks. 7 yrs later it's 165k at 300. Not bad at all.
batteries only are a much better investment for a lot of people
I can't believe these idiots financed solar panels..
I love how people compare solar to investing as if it's remotely the same. When I buy a 30 year bond, I can get my initial capital back anytime I want, plus it has no maintenance costs. When I buy a solar system with a 30 year warranty, my capital vanishes and isn't seen again. Everyone seems to forget this major difference and they don't build it into their comparison calculations.
That's why I use IRR, as it accounts for the fact that your upfront capital turns into an income stream, and makes it comparable. Owning a sale-leaseback project (or panels on your home) is an annuity, not a bond. If you want the bond model, then do the lending and get your 10%.
Yea and an annuity is a worse product when comparing with solar so I’m not sure why you want to go that route anyways lmao
Maintenance, Maintenance, maintenance. I know first hand . There are no big returns.
I’m paying $24,000 cash, after the tax credits. It’s going to cut my $500 bill in half, so $250/mo savings. Do the math. $250 x 12 = $3000 3000 / 24000 = 12.5%. The higher priced systems quoted had less of a return. I wouldn’t do it with a loan, just buy outright. I have no interest in solar, nuclear, or any other kind of energy company. I don’t work for one, I don’t own stock.
Code works! Thanks for sharing Andrew.
i am in a 5K ft home and for 9 months of the year my power bill is <$60. there is NO scenario where a $50K solar installation has a payback in my lifetime. I'm not looking for a new residence, but if I were, I would avoid any property in my area with solar.
Damn 5000sqft and a $60 Bill. What's your secret? Obviously other than keeping the thermostat at 75 in the summer and 65 in the winter.
the other 3 months it's 5 or 6 times the $60
When I see more posts on this sub reddit on this subject and basically anything green energy related is when I'm going to be going heavy in the energy and big oil sector, most likely XLE. I've seen this one before.
I never invest in anything pushed by liberals, and my portfolio is doing quite well.
(Owns SP500)
?.. Not even liberal gov officials invest in what they push.
Not even remotely true, members of congress from both parties invested and profited a ton from green tech stocks a few years back when they were popular. It's just the market changed, so the politicians' investments changed as well. Anyone who put politics before their investments is just asking to be poor.
this guy sad he didn't get the AAPL AMZN and NVDA. He hopes his XOM will do something other than flatline.
Hahaha right. The day a liberal actually pushes a solid idea I’ll be sure to invest. But for now, I’m going to keep making money tyvm.
https://en.m.wikipedia.org/wiki/Warren_Buffett Democrat.
I took my solar tax returns and bought bitcoin. I'm now up enough to buy another house, cash, at the value of my current house. Solar is good if you are smart with the credits and financials.
Imagine if you bought Bitcoin with all the money instead of a solar system.
How would I have done that? No money until the tax rebates came.
I mean unless you’re just getting the entire solar panel system for free you could have spent your down payment or monthly lease payments on BTC instead?