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Published on November 8th, 2013 | by Zachary Shahan

12

Is Solar Worth It?

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November 8th, 2013 by Zachary Shahan
 

Originally published on Cost of Solar.

This question is a popular one these days, and it’s getting more and more popular every day, as more and more people think about going solar and then actually go solar. But the question remains for hundreds of millions of people: is solar power worth it?

Well, on a solar power website, what do you expect I’m going to write?

Yes, solar power is worth it! (In general.) A ton more people should be going solar than are actually going solar today. Society-wide, we need solar power big time. On an individual level, many people would benefit financially by going solar. There’s massive money to be saved by going solar… for many or even most households.

I started writing about solar power not out of necessity — I could have chosen to write on anything (writing about Kim Kardashian and Justin Bieber probably would have paid better). Several years ago I chose to starting writing about solar power because I knew solar power was necessary and that it was also a good deal for numerous homeowners. The number of homeowners it’s good for has grown exponentially since then. (Yes, exponentially.) So, in my mind, solar power was worth it back then, but it is even more worth it now, and it is certainly worth it to many more homeowners these days when you are simply looking at the finances.


Solar Power Isn’t Worth It For Everyone

However, that doesn’t mean going solar is a good deal for everyone. There are some cases in which people simply don’t have an ideal roof or land for solar panels. A handful of states still have pretty horrible solar power policies. In such cases, the answer for “is solar power worth it?” can actually be a “no.” I’m not going to lie to you about that just because I’m a fan of solar or employed by a solar power company.

In the end, though, the obvious answer to “is solar power worth it?” is a very simple one: “I don’t know — you should look into it!”

The relative worth of solar power for different households in different states or countries can vary tremendously. You have to get an actual solar quote to see if solar power is worth it for you.

Solar Power Is Worth It For A Ridiculous Number Of People

If you just want some general facts and statements regarding solar power’s worth for individual households, I’ll quickly run down a handful of key, general points.

As I wrote in August in an article about solar power’s return on investment, in a whopping 86% of states, going solar offers a better return on investment (ROI) on average than investing that same money into a 5-year certificate of deposit (CD), according to one recent study. Not familiar with CDs? CDs are the things your bank is probably repeatedly offering you as a better option than a savings account. They are also helpful to the bank, since you promise to leave your money in there for the specified period of time, which is why the bank pays you more interest than in a typical savings account. The short and simple summary: they offer better interest than a general savings account, but you can’t touch your money for awhile.

More generically, in 49 states, investing in solar is projected to earn the average homeowner at least some money over the course of 20 years (which is really the minimum number of years a solar panel system should last for — many of the first solar power systems are going strong well after 30 years).

If you actually invest money on the stock market, the above may be a little too “low risk, low reward” for you. A common point of reference for a good investment for stock market investors is the S&P 500. So, for you, “is solar power worth it?” may actually mean, does investing in solar beat the investing in the S&P 500? (Of course, this ignores the local air quality, climate, economic, and “feelgood” benefits of going solar, but nonetheless….) In over 25% of state (13 states), going solar actually beats investing that same money in the S&P 500 — at least, that’s the projection for the average homeowner in those states.

Here’s an infographic for more on all this solar power investment jazz:

solar roi

Is Solar Power Worth It For You?

I think the above should have convinced you that you should at least find out more about your situation. Every home is different. Even if you’re in Mississippi, you may have a better-than-average situation that makes going solar worth it. There are a lot of things that actually come into account when evaluating the worth of solar for an individual situation, such as:

  • how much money you spend on electricity
  • whether or not your utility has a time-of-use electricity pricing system (hint: if it does, electricity is probably much more expensive at the time that solar panels would be generating the most power, so going solar can save you much more money)
  • whether or not your utility will adopt a time-of-use electricity pricing system in the future (this is a growing trend, and it makes a lot of sense, so I wouldn’t count it out)
  • the age of your roof
  • whether or not your roof is shaded by trees that you aren’t going to cut down or trim back, or even by other buildings
  • whether or not your state or city has net metering, solar rebates, a feed-in tariff, or various other solar incentives
  • whether or not you have or will buy an electric car that could charge up on the electricity generated by your solar panels
  • how much you value fighting global warming, air pollution, and water pollution
  • and so much more….

The bottom line: in the end, the answer to “is solar power worth it?” is a very personal one. You need an answer specifically focused on your home and personal details. The best way to get that answer? Get a solar quote from a local installer.

Just do it.

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About the Author

spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



  • mailina

    I DISMISS solar cells completely for the following reasons:
    - you must consider that you could put solar thermal collectors there instead and at a FRACTION of the cost. These could go straight into your heat water tank. Add this alternative investment into the calculations. (you may also be interesed in Rocket Stove Heaters / Rocket Mass Heaters)
    - if you break even with solar cells after, say, 20 years you’ll have something that is as modern as a CD player is now. Or a fat TV. There will probably be solar cells solutions or other solutions by then with much shorter payoff time.
    I should add that I’m no expert on the matter and I live in Sweden (which is not as cold as you think).

    • Bob_Wallace

      No allcaps shouting.

      Hot water in your tank will not power your light bulbs and computer.

  • Matt

    Also if you work to stop the government from giving your money to coal/gas then not only do you save on taxes and health costs; but the value of your solar goes up. Since depending on which study you look at coal power would cost 2-6 times more is subsides cut and externals added. The US government picked a “winner” by making the cost for coal lower that it really is. If that were removed then solar would be a lot better cheaper. So as the number of PV users grow, the political power of solar will grow, and hopefully the government will begin to remove its giveaways to coal/gas.

  • RobS

    The one comment I would make about the chart showing where treasury bonds and the S&P fall in compared to Solars IRR is that when you earn earnings on an investment or have capital growth you generally pay tax on those gains reducing the IRR by ~30% or so. When you pay less for your electricity you pay no tax on those savings rendering the comparitive IRR on solar considerably better than the chart suggests.

    • http://www.aimcustom.com/ Greg Magnus

      Great point RobS. It isn’t obvous that you need to make $130 working to equal $100 in savings.

  • RobS

    The other really important part of the answer to the question “is solar worth it” is “look into it AND if you find it’s not make sure to check back once a year or so because prices are dropping and power tariffs are rising and if it’s not now it will be at some point”
    I have come across so many people here in Australia who when they find out I have solar say ” I looked into it and the payback wasn’t worth it” you ask them when they looked into it and it will be regularly be three or four years ago. In that time solar costs have fallen by 75% and retail power tariffs have nearly doubled. We need to get people to recognise that a snapshot in time is useless, it’s a moving target and if the economics are negative or marginal now theyre likely to be positive within a short space of time so keep on checking occasionally.

    • Ben

      The newly appointed advisor to the Abbott government says that solar power cost 30 times more than standard cold fired generation energy. After the removal of the carbon tax and the subsidisation of solar power, solar power will cost 40 times more. Furthermore, says the program is complete waste of money, elevated electricity prices, and cause hardships to Australian households and manufacturing to subsidise those with solar power.

      It’s good news that Australia is the first country in the world to turning back the clock on renewable energy.

      It was 70% of Australian population voted to go back to coal energy two months ago to bring back coal electricity.

      • Bob_Wallace

        “The newly appointed advisor to the Abbott government says that solar power cost 30 times more than standard cold fired generation energy”

        What do we call someone who makes statement which are not true? Can you think of the word?

      • A Real Libertarian

        I’m sure solar power costs “30 times more than standard cold fired generation energy” just as much as “70% of Australian population voted to go back to coal energy two months ago to bring back coal electricity”.

        • Bob_Wallace

          I don’t exactly understand why the current government was elected. I saw one source claiming that it was due to fear of a few dark-skinned people entering the country.

          Any idea what the real reason was/reasons were?

          • A Real Libertarian

            Pretty much.

            Unfortunately for Abbott he’s now in charge of policy, not slogans, so he’s got no clue what to do.

          • Gogreen

            Yes he’s got Direct Action, more trees , no need for renewable energy now, we can cut the trees down in 20 or 30 year and use that stored carbon to make power.

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