The cost to homeowners to install solar is rather prohibitive for most. Not only would we have to buy all the equipment and the installation but we would be making those payments for several years. I read it is estimated to take 20-25 years for solar to actually pay for itself. If you can afford it, great! It’s like buying an EV. Couldn’t afford it and having to install a charging station is pricey.
Agree 100% that it's not for everybody. As far as the upfront costs go, I paid for almost all of that with a HELOC. As you said, I'll be making payments for years. But my system will pay for itself on about the 12th year, that includes the extra I paid to buy an EV (vs buying my wife a used ICE crossover since it was about time to replace her older crossover anyway). It also includes other home energy improvements done to the house (insulation, replacing my two natural gas appliances with high efficiency electric ones). But before you say it's crazy, think about these things:
1. My HELOC has a fixed interest rate of 3.5%. By making about 80% of our overall energy costs go away (no natural gas bill, almost no gas bought at the pump unless we drive our ICE pickup, and our power bills are a lot smaller), I've basically insulated our home finances from 80% of whatever future runaway energy costs are. At least that part of my retirement financial planning is now a non-issue. (I'll worry about other costs having high inflation, but not energy costs.) I'll take a fixed 3.5% interest rate any day over the Dims' proposed future energy costs. (In my calculations for payoff I assume only a reasonable 3% inflation rate for all costs. Thus, my payback period will be sooner if the Dims have their way.)
2. My HELOC payment goes down as the HELOC balance is paid down. Even though it's a 2nd mortgage and has a fixed interest rate, the minimum payments are calculated like credit card payments are instead of like most mortgage payments (fixed minimum payment). If you think of the HELOC payments as the cost to save money on energy, then each future year it costs me less money (lower future HELOC payments) to save more money (avoiding future higher energy costs).
3. The EV in conjunction with the solar makes the overall system better than the sum of its parts. My wife asks that the EV be charged for at least 100 miles on any given morning to handle whatever random chores need to be done. (We have the ICE pickup as a backup in case we underestimate the next day's driving needs, and I usually work from home while my wife is retired.) So when we bring the EV home and plug it in to charge, we have a choice between two 240V outlets to charge it in. If we come home with less than 100 miles left or plan to go on a trip in the EV the next day, we plug it into the constantly powered outlet. But if we come home with over 100 miles left to charge and no future trip planned, we plug it into the intermittently powered outlet that my solar inverters power only when my home solar batteries are at least 80% charged (configurable). Since most of a day's chores are done with a 40-mile round trip, and since the EV can hold up to 200 miles of charge (charged to 80% like the manual suggests unless going on a trip), that means we have a few days we can go without having to charge the EV. In other words, most of the time we can be patient and wait for a good solar day to charge the EV. The end result: most of our EV charging is done with "free" power from solar in a way that doesn't add to our power bill. In fact, I pull a lot less from the grid than I used to before I had an EV and when I still heated my home and water with natural gas (but had no solar to give me free power).
4. Other things that save money better than most are things that liberals pay extra for. For example, we don't sell power to the grid. If we did that we'd have to pay a large monthly fee (about $130/month in my case with my system and my utility's rules) for the utility to pay me a few dollars back each month. I don't do that, therefore, my payback period is quicker. Another thing is our choice of EV: it's not a Tesla because I'm not wanting to pay extra as a statement that I've joined the warmageddon cult. Not only is it a lower up front cost than a Tesla, but replacing the battery 10 years from now would cost me $10K in today's money (assuming I didn't have a warranty today, and assuming a 3% inflation rate when I'll replace it 10 years from now). In reality we paid a little extra for a higher end model with extra luxuries, but I count that part of the cost as fun money.
5. One last thing that most people forget is the cost of the ICE car itself. If, like us, you always buy used cars (until we got an EV), then there's the issue of having to replace the used car. In our case the average was every 7 years. So, yeah, I'll have to replace the EV's battery in 10 years (in today's prices that's $10K, 10 years from now it'll be about $13,400 assuming 3% inflation rate). Well, as I said I was looking at replacing my wife's used ICE crossover anyway with another used ICE crossover. Even a used one was going to cost me $10K. Assuming a 3% inflation rate, replacing it 7 years from now would be $12,300. Therefore, by not having to buy an ICE car for $10K that I would have paid for from savings (no car payment), that's $10K more cash I have on hand the first year while making car payments on the EV ($10K more in our Roth IRA's growing tax free). 7 years later that's $12,300K more I'll save (by not having to buy another used ICE car).
I'm making the car payments in part with the $400/month budget item I used to put into a car savings account (to repair or replace our cars with) and in part by pulling the excess from the HELOC (slowly increasing the HELOC balance while making car payments). I also pay down the HELOC each year I get tax credits (the solar tax credit is non-refundable, but it carries forward to future years). I hate the tax credits because I hate government intrusion in our lives. Besides, all the tax credits did was artificially inflate my costs anyway, so they hurt me more than helped me. But it is what it is, so I use them to pay down the HELOC, which in the end helps make the car payments on the EV.
When the EV is paid off in the 4th year the tax credits will end. I told my wife I'll continue using the $400 car savings portion of our budget for 3 years after that to pay down the HELOC sooner to pay back the solar project for the extra we spent on a EV to have nicer luxuries in the only new car of our marriage. After that the only part of my budget going to paying off the HELOC will be the $450/month that we were paying in year 2019 for power + natural gas + gas at the pump for one of our cars (we had two cars then, but now that we do one car's worth of driving I'm using 2019's gas costs for just one car). Basically, I'm already winning the game by the energy portion of my budget being like it's year 2019 (as though the past 3 years' worth of energy cost inflation didn't happen). When my HELOC payment + tiny power bill is less than $450, I pay extra on the HELOC. When it's less than $450 I pull from the HELOC (which increases the HELOC balance, but not as much as the HELOC payment lowers the balance). Right now when I'm making car payments, the budget math is $850/month for HELOC payment + power bill + car payment). Since the combination of those is always more than $850, I pull that from the HELOC (my budget feels like it's year 2019 as far as energy costs go).