Are Solar Panels Worth the Cost? (Cost Benefit Analysis / Break Even Point) – Bad Investment



SOLAR PANELS ARE NOT WORTH IT FROM A PURELY MONETARY PERSPECTIVE (DEPENDING ON YOUR CIRCUMSTANCES)

This is mainly because of the fact that the initial investment you placed in the solar panel installation could had been invested in the stock market (or other investment vehicle). This is what’s called “opportunity cost.”

You can’t simply look at the break even point of solar panels, but you have to look at the break even point versus investing in the stock market. Unfortunately, they never meet.

The cost benefit analysis clearly shows that the gap between payback period is HUGE, even if you want to consider in minor other variables.

For example, an initial investment for $20,000.00 in solar panel with a 9 year break even point and 7% average return (post-tax) would result in cash value displayed below. At the 9 year break even point for the solar panels, your stock investment would be valued at $36,769.18. The spread between solar panels and your stock values only grows exponentially larger from there.

Other disadvantages to consider compared to other investment vehicles (like stocks):
- When you sell your house, you may not recover the value of your initial solar panel investment while stocks are completely mobile.
- At the end of life of your solar power investment, your solar panels are worth essentially $0 and depreciate, whereas your stock investment continues to have compound interest.

You can click this link to see the spreadsheet I used to make the calculations here:

https://docs.google.com/spreadsheet/ccc?key=0Ar8ivt6iydY7dFYyWDM0QlNRb1d4Z2c1eHoyQXAwV2c&usp=sharing

Now if you want to argue all the extra “green” benefits items, I guess that’s your prerogative. From a strictly monetary “return on your investment” perspective, the data greatly favors alternative investment options.

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Post time: Nov-21-2017
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