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| Joined: | Mon Nov 21st, 2005 |
| Location: | California USA |
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Yes, I'd Do It Again
The eternal question of price/performance always crops up. Clearly, I'm saving money, but I also sank around $38,000 into the system. At $3,000 per year in savings (which assumes a constant rate for power cost and the same power usage pattern), that's a 12.5 year payback.
Power will be consumed or power will be "saved", so the equation isn't exactly as follows:
Total cost = 38,000
Production per year 3,000
Total time of production 25 years (not confirmed)
25 years times 3,000 = total production of power
25 x 3,000 = 75,000
Total production minus total cost equals total profit
75,000 - 38,000 = 37,000
How much is that profit when comparing that rate of increase, which is almost 100 percent increase in 25 years, to a typical interest rate charged to a typical buyer for a loan on 38,000 dollars, straight interest for 25 years?
http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx
That page defaulted to 7% interest rate and that page didn't show the total sum of payments where the borrower pays interest and principle for 25 years.
The monthly payments are 268.58
Try 5.5 percent interest and get 233.35 per month
Times the monthy payments by 300 total payments to get the total: 70005.00
The idea here is to look at the Solar Panel investment as if you are a Banker loaning out 38,000 dollars to see how much your borrower will pay you back in interest payments over that 25 years when the loan is being paid off. At 5.5 percent interest the 38,000 dollar loan pays you back a total of 70,005, which means that the Solar Panel investment returns more than 5% interest since the total return on investment (cost of the Solar Panel plus the power produced after the Solar Panel was paid off in full) is 75,000.
See?
Last edited on Fri Jun 26th, 2009 09:24 am by Joe Kelley