Why Residential Solar Power is Such a Sound Investment: The owner of SunHarvest Solar describes his thought process about adding solar panels to his home. Brandon Cheshire crunches the numbers.
May 30, 2014 09:06AM
● By Brandon Cheshire
The biggest obstacle I have encountered within the solar industry has to do with misconceptions, education and misinformation. Even with my being in the energy sector for 20 years, the owner of a solar company for the last five years and installing solar for two years before that, I only recently installed solar on my own roof in October 2010. Why did it take me so long to invest in solar for my own home? What was holding me back?
Like many people. I thought it was too expensive and assumed that it was well out of my price range to afford, so these uninformed opinions kept me from inquiring. Once I started thinking about my investments in a broader scope with the long-term implications that I will continue to consume energy for the foreseeable future, I sat down with my energy bills, broke down the costs and did the math. I was genuinely shocked when I realized just how affordable it is to own solar—there is no secret. You can go solar today for less than you are paying the utility company now, and your investment is cash flow-positive immediately.
My solar system has already paid for itself. I gain an additional $250 every month, or $3,000 every year, and while the system is under warranty (25 years) I won't pay APS a minimum of $63,000 over those years, because I locked in my energy rates and I own the method of power production.
Here are the numbers that explain the changing energy economy, based on the typical cost of an 8kW solar system, which will produce an annual minimum of 13,600 kwh, to offset an average-sized, 2,000-square-foot home’s utility bill of $250 per month. Solar panels cost 90 cents/watt. Inverters (equipment that converts solar power to grid power) cost 51 cents/watt. Attachment hardware (that affixes the solar panels to the structure) costs 54 cents/watt. Installation labor (skilled NABCEP trained installers to integrate your solar system) costs 55 cents/watt. Engineering and permitting costs 15 cents/watt. The total cost is approximately $2.65/watt, or $20,960, for that home.
Then, deduct the federal tax credit of 30 percent ($6,288) and the Arizona state tax credit of $1,000, for a total of $7,288. The balance comes out to $13,672. If you currently pay $250 a month to the utility company, it would it take just 4.55 years to replace the utility company.
This is as simply as I can break down the costs, and homeowners should certainly consult a professional accountant to nail down the details, because financing the system through a loan will add a little bit. Many programs are available with low interest rates, as well as home equity loans for those that qualify, based on credit worthiness.
Then there’s the instant equity of approximately $20,000 that your home accrues once you have gone solar, based on industry appraisal experts. Be smarter than I was—don’t wait.
Brandon Cheshire is the chief technical officer for SunHarvest Solar & Electrical, serving the greater Phoenix area. For more information on going solar, call 623-755-8323 or visit SunHarvest-Us.com.