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Are solar panels worth it?

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  • Are solar panels worth it?

    I mean this in the economic sense, not the environmental sense. We are poised to purchase a newly constructed home and am torn between a 2Bd 2Ba $385k home or a $405k option with solar panels. They are the same models, only difference is the solar panels.

    We plan to put down 20% which would be $78k vs $81k. Our mortgage rate quoted was 2.5% interest, 30 year fixed. We plan on eventually turning this house into a rental. Either way, the mortgage will be covered and then some if we are able to rent out our current home.

    Would we be able to get the federal tax credit for the solar panels since it already comes with the new home?

    Has anyone experienced any issues with solar panel maintenance? How often do they break down and do they ever need cleaning? How much do those things cost?

  • #2
    I imagine a lot depends on your location and the cost of electricity. Also I would be wary if you do not plan to live in the house a long time. I am not sure if you will be able to make up the difference in rent.

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    • #3
      Check out this website. If the house is not completed, maybe try using an address for a similar sized and oriented house close by.
      https://www.google.com/get/sunroof#/p=0

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      • #4
        You can also check out the national renewable energy lab website....pretty neat way to estimate your solar production potential, based on geography, direction of the roof, angle of the roof, and size of the system you might install.

        ​​​

        https://pvwatts.nrel.gov/

        As far as maintenance:. You can get systems with microinverters that will report specific output from each panel, so if something breaks it's easy to troubleshoot.

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        • #5
          20k for a 2br/2ba? that's either an oversized array or paying a pretty premium for it. What's the size of the house and the array? Really depends on the utility's charging rates and the person's usage and timing too. All factors. Usually ROI break even when done right is 5-7 years. Sometimes as low as 3 or high 10. Take into consideration most parts have 10-25 years warranty on them.

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          • #6
            We installed solar in 2011 and got a big tax credit then, both state and federal. They don't break down per se, but have had to replace (all under the 15-year warranty) some of the micro inverters. We also get SRECs - so you should check what they're paying for them in your state, and factor that into your decision based on how much you expect your system to generate. The SRECs (solar renewable energy credits) are sold on the open market and you can often contract with your solar company to sell them for you - they just send you a yearly check.

            they don't need cleaning, etc. Just calculate how much energy you'll produce, what your expected electric bill will be, and initial cost, and SRECs. It can be a 5-10 year time to pay for themselves, generally.

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            • #7
              general rule i think is financially not worth it without tax credits which seem to be becoming more and more scarce.

              i would also be a little wary of having an array put on a home you are planning to sell fairly soon (<10 years). not an expert but not sure these things are universally considered to be a feature and might be perceived as a bug by someone hostile to the politics of renewable energy. i think you are way more likely to lose a buyer over hostility to the idea than you are to entice a buyer who sees it as a big plus but that's just me.

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              • #8
                Thank you everyone for the response. After looking at our energy usage and average costs for solar panels, it would be cheaper to just set them up ourselves. I think the $20k definitely includes a no-hassle premium.

                Originally posted by Lordosis View Post
                I imagine a lot depends on your location and the cost of electricity. Also I would be wary if you do not plan to live in the house a long time. I am not sure if you will be able to make up the difference in rent.
                That’s a good point. I think if we purchase solar panels we should plan to live in the house until they have paid for themselves, hopefully in 5-6 years. Afterwards, I wonder if we could have a slightly higher rent price ($50/mo?) compared to the market since the renters should be able to save on electricity costs.

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                • #9
                  Originally posted by MPMD View Post
                  general rule i think is financially not worth it without tax credits which seem to be becoming more and more scarce.

                  i would also be a little wary of having an array put on a home you are planning to sell fairly soon (<10 years). not an expert but not sure these things are universally considered to be a feature and might be perceived as a bug by someone hostile to the politics of renewable energy. i think you are way more likely to lose a buyer over hostility to the idea than you are to entice a buyer who sees it as a big plus but that's just me.
                  Oh I never considered it as a political statement...hmm...

                  Edit: There is federal solar tax credit of 26% of cost for year 2020, but goes down to 22% for year 2021. If I had it done last year, it would have been 30%!

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                  • #10
                    Originally posted by TheQuietOne View Post

                    Oh I never considered it as a political statement...hmm...

                    Edit: There is federal solar tax credit of 26% of cost for year 2020, but goes down to 22% for year 2021. If I had it done last year, it would have been 30%!
                    meh i mean everything is nowadays.

                    i would definitely consider my geography if i were looking at this decision.

                    in certain areas i would just worry that this definitely could lose me a buyer but the lack of panels wouldn't turn away someone of another persuasion in the same way. don't you think?

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                    • #11
                      Originally posted by MPMD View Post
                      general rule i think is financially not worth it without tax credits which seem to be becoming more and more scarce.

                      i would also be a little wary of having an array put on a home you are planning to sell fairly soon (<10 years). not an expert but not sure these things are universally considered to be a feature and might be perceived as a bug by someone hostile to the politics of renewable energy. i think you are way more likely to lose a buyer over hostility to the idea than you are to entice a buyer who sees it as a big plus but that's just me.
                      I think the bigger issue is people who sign a lease to have panels put on the roof (you know, those guys that knock on your door and say "it's totally free, just sign here and we'll put up the panels at no cost to you and lock in a low electricity price for you for X years"). Then, when you want to sell the house, you don't own the panels on the roof...

                      If you own the panels outright, that's not an issue.

                      If you have an ancillary structure (ie garage), think about putting panels on the garage roof only, not the main roof of the house. A small leak in the garage isn't nearly as big a deal as leak on your main house.

                      There are also ways to do it cheaper - you can buy kits and install yourself. I did this with https://www.gogreensolar.com/ and installed on my garage roof. There's definitely a steep learning curve here, so if you're not reasonably handy and interested in learning stuff, this isn't for you. I think this saved me about half of the price of the project. For me, was a win/win/win - reducing carbon footprint/saving money (eventually)/fun project to learn a bunch of stuff. Also was an excuse to buy some more tools (30% off - thanks to the tax credit!).

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                      • #12
                        I would not prioritize solar panels if you plan to rent or sell the house in the near future. I would see the panels as another maintenance expense item but unlikely to actually increase your rent or selling price by an equal amount.

                        The google sunroof calculation would be helpful. If the payback time is something really low like 3-5 years and you'll be there for longer then I think it would be ok.

                        These solar threads always get a me a bit depressed. My house has a large roof but is oriented the absolute wrong direction for solar. The google calculator puts me at a 17 year payback!

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                        • #13
                          Originally posted by Dicast View Post
                          These solar threads always get a me a bit depressed. My house has a large roof but is oriented the absolute wrong direction for solar. The google calculator puts me at a 17 year payback!
                          same

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                          • #14
                            ^^^ Same here, live in Arizona so sunny almost every day, but smaller roof (2 story house) and the largest slope of the roof faces north. Oh well, gotta pay attention to stuff like that in my next house.

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                            • #15
                              Didn't crunch numbers on solar or EV purchase. Had solar panels installed 3 separate times over the years and got 2 EVs. It hasn't steered us away from our investment goals.

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