You want to do something good for the environment. You’re considering maybe a new hybrid car — the new models cost in the same ballpark as a solar electric installation for your home. You might need to get a loan in either case. It’s a quandary. Apples and oranges, you say. But is it? Let’s compare…
The Case For a Prius
A 2017 Toyota Prius Two Eco is priced at about $25,165. You may be able to get a better deal than that, of course, so just for discussion purposes and ease of calculation, let’s say you get it for $23,000. Let’s say also that you are able to sell your old car for $6,000. So the net cost is $17,000.
Maybe your car loan for the remainder costs about $306 a month for 5 years. And there is insurance, and gas & upkeep. They hold their resale value pretty well, but still, they depreciate. So you’ve got an outflow of around $5-6,000 each year for your nifty Prius.
The Case For a Solar System
If we take a look at a typical 7.5 Kw solar electric system, the gross cost is about $22,875, and then we knock $6862 off of that thanks to the one-time Federal residential energy tax credit of 30%. So the net cost is $16,013.
If you borrowed $16,000 for this, at 4.5% for 5 years, you’d pay about $298 a month. But every day, your new solar array would be eliminating your electric bill (conservatively, about $500 a year). It would also be generating excess power for which your utility company would pay you to the tune of $950.00 to $4,600.00 per year, depending on the type of modules that you chose to install and your particular utility company.
Photovoltaic modules manufactured in the State of Washington have the highest incentive rate.
Thus, each year, your solar electric system is earning you the money to pay off the loan. In essence, the utility company is buying your solar system for you! And it adds to the sales value of your property.
A solar installation on the roof is admittedly not so flashy as a new car in the driveway. But it is not depreciating from the moment you buy it. It is not out there looking for fender-benders on the road and requiring a week and a thousand dollars at the mechanic’s every so often. The value of the car keeps going down and the expenses go up the older it gets. In contrast, after the utility company has bought your system for you, your solar array keeps earning money for you, and you keep doing good for the environment.
Now that is seriously nifty.