Your roof is a better place for your money than your bank, says a UA researcher, who compared returns on investment from solar power installations to certificates of deposit. An $11,700 investment in solar photovoltaic panels for your home, under the current system of rebates and tax credits, will net you $28,000 more over the next 30 years than that bank CD, the study concludes.
Of course, these days just about anything is a better investment than a 2-to-3 percent CD, but Lon Huber, a policy program associate with the Arizona Research Institute for Solar Energy (AzRISE), based his conclusion that solar beats banks on the historical CD interest rate of 6 percent.
Huber’s scenario, published this week on the AzRISE Web site, is based on a 4.5 kilowatt photovoltaic installation that would generate about 63 percent of the energy used annually by a typical Arizona household.
Its installed cost of $31,500 would be partially offset by $13,500 in utility company rebates, a $1,000 Arizona tax credit and a 30 percent tax credit from the federal government, leaving the homowner with a tab of about $11,700, Huber calculated.
Homeowners would save $700 in electrical costs the first year, a savings that would grow to $2,300 a year at the end of 30 years, assuming an average annual increase for electricity rates of 4.7 percent.
Those savings, invested at the same rate as the hypothetical bank CDs, would net $28,284 more, the report says.
Results would, of course, vary, Huber said, but the calculator he developed for the study showed solar to be a better deal than CDs in all scenarios, so long as the rebates are in place and the homeowner can take advantage of the generous tax credits.
The study also assumes no special problems with installation. “Bring me a tile roof and I’ll get higher numbers than that,” said solar installer Kevin Koch, of Technicians for Sustainability.
Koch, who reviewed Huber’s numbers six months ago, said prices have actually come down since then. Solar panel production is outpacing demand. Two recent price reductions for solar panels have allowed his firm to lower its overall prices by 9 percent to 10 percent.
The reductions and the extension of federal tax credits have kept the three-year-old business booming, Koch said. “We’ve been steadily growing since 2006,” he said. “Today we’re confirming two new hires and interviewing for a third.”
Huber said his report is “tilted toward people with money to invest.” If you borrow to install your solar system, he said, “It still makes sense but the benefit is significantly reduced.”
But choosing to invest cash in your roof or in a bank should be easy, said Huber.
“If you have capital and you’re looking to protect your purchasing power and make money off your savings, then solar is the way to go,” Huber said.