Solar Saves $ If You Don't Finance

Residential - January 2021

Happy with solar but don't finance. 5 year payoff

Quick Facts

Average Annual Savings

$4,000

Net Investment

$24,000

Return on Investment

16.7%

Property

Owner:: Joe O
Type:: Residential
Address:: Round Rock, TX 78681
Size:: 3,400 sq ft

Technology

Type:: Solar PV
Installed:: January 2021
Size of System:: 14.6 kW
Purposes:: To generate electricity

Financial Details

Gross Cost of System:: $32,000
Value of Tax Credits:: $8,000
Net Cost of System:: $24,000
Annual Savings:: $4,000
Own or Lease:: Cash Purchase
Additional Financial Notes:: Whatever you do pay cash or find a bank loan. Let me first say....I only asked my chosen vendor for their cash price. After learning from other vendors the financing details it only made sense to purchase with cash. My electric bill was $350 per month using average monthly billing. I wanted to see how I could spend less knowing that eventually something would happen to spike prices. In round numbers. I wanted a 75% system since my kids will move out in the next few years. The initial offer for the system was $42K. It would not cost me anything. I would take out a 20 year loan for 42K. The loan payment would be $250 and that would save me $100 per month. In addition the finance company wanted my $8K tax rebate to keep my loan payments at $250. They factor in getting the tax rebate to keep the monthly payments as low as possible. If I kept the tax rebate then my loan payments would go up to over $300. I asked them what happens if my tax rebate doesn't really return 8K and they said pay the difference out of pocket I thought this was ridiculous so I asked how much would it be to buy the system with cash. Wow what a difference. The total price dropped to 32K so there was a 10K loan origination fee. If I paid cash I would be able to keep my $8K rebate. I could not believe the cost of using a solar loan. I want to my bank and asked about a 32K loan and the payments were less than their 42K offer. I decided to pay cash because this was about decreasing monthly expenses. Just to make sure this wasn't an odd ball. I asked several different vendors the cash price and they were all remarkable similar. Find a way to pay cash for the system. Don't use their solar financing companies. It sounds good to save $100 a month but the long term cost is to high.

Professionals & Suppliers

Products:: LG Energy Solution
Installers:: Lighthouse Solar

What You Need to Know

Description:

14.76 Kw system split across 2 arrays. I also added a generator after installation of the solar panels

Other Benefits:

I've become the guy all my neighbors ask questions about solar so I've enjoyed the conversations and meeting new people. Most are amazed how it worked and the costs of purchasing with cash

Maintenance Requirements:

None really so far after 2.5 years. A squirrel chewed through a wire and it had to be replaces

Efficiency or Sustainability Improvements:

I wanted to install battery backup. I have 2 air conditioners. The upstairs one was 5 years old and the downstairs one was 20 year old. Because of this and my power I needed 4 batteries at 10K each. 40K for battery backup was to much so I spent 14.5K on a whole home generator. That price included a 10 year maintenance contract. When I ran the numbers the batteries would carry us through 12 hours at full home usage. It would then take them 12 hours to recharge using the solar panels. Assuming the electric went out at dark and we ran on battery until the next morning we would be about out of battery power. The next day almost all the panel output would be needed to charge the batteries for the next night. If we used power during the day which we would then we have less power for night 2. By day 3 we would not have enough batter power to keep the house running. Yes we would conserve but 40K for 2 days at best was just to much.

My Motivation:

I wanted to reduce my monthly electric bill to almost $0 and recoup the savings as fast as possible to offset the cash purchase price. I figured it would also help with home value.

Advice:

Get bids from multiple suppliers. Ask them for both loan and cash prices. Get info from a bank on their loans and compare. In my case I'll recoup my cash investment in 5 years and then have 20 years of free electricity. Solar can save you $ over the long run if you plan to stay in your house

Experience with Installer:

Lighthouse Solar of Austin was awesome. They communicated well and have been there to answer questions and support me now that the system is active.

Additional Notes:

I created a giant spreadsheet that had all the vendors and multiple columns of each vendors offers. Everything from price to warrant to repair costs. It sorted itself based on what my key items were and helped me settle on the top 3 vendors to negotiate with seriously. I am happy to share the spreadsheet if contacted and talk thru my whole experience

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