Are Solar Panels Worth the Cost?

ABSOLUTELY NOT FROM A PURELY MONETARY PERSPECTIVE.

This is mainly because of the fact that the initial investment you placed in the solar panel installation could had been invested in the stock market.  This is what’s called “opportunity cost.”

You can’t simply look at the break even point of solar panels, but you have to look at the break even point versus investing in the stock market.  Unfortunately, they never meet.

The cost benefit analysis clearly shows that the gap between payback period is HUGE, even if you want to consider in minor other variables.

For example, an initial investment for $20,000.00 in solar panel with a 9 year break even point and 7% average return (post-tax) would result in cash value displayed below.  At the 9 year break even point for the solar panels, your stock investment would be valued at $36,769.18.  The spread between solar panels and your stock values only grows exponentially larger from there.

You can click this link to see the spreadsheet I used to make the calculations here:

https://docs.google.com/spreadsheet/ccc?key=0Ar8ivt6iydY7dFYyWDM0QlNRb1d4Z2c1eHoyQXAwV2c#gid=1

Now if you want to argue all the extra “green” benefits items, I guess that’s your prerogative.  From a strictly monetary “return on your investment” perspective, the data greatly favors alternative investment options.

One thought on “Are Solar Panels Worth the Cost?”

  1. A viewer asked this question: Jefferson, I watched your recent video of the Solar
    Panel Investment Analysis. It was something I have always wondered about. Thank
    you for sharing the video and the excel spread sheet. Even though it may not
    make sense as a logical short term investment I would like to further
    investigate the details in regards to buying and installing solar in my local
    region. I am curious to know what region of the country you live and what the
    average price per kWh is? It hard to distinguish the overall rate from your
    spreadsheet. Thank you again.

    MY ANSWER:
    I live in Orange County, California. My kWh is a tier based system, so I actually calculated it based on the tiers on the “TIER 1” etc columns. The cost ranges from 0.04 to 0.24.

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