I'm wrestling with a tough decision here. I've got $18k set aside, and I'm trying to decide whether to invest it in an index fund or go for solar energy. Here are my assumptions:
- The upfront cost for solar is $18,000.
- I expect to offset about $1,800 a year on my power bill, with a 2% increase yearly.
- I anticipate a 7% average return on an index fund after inflation.
- Maintenance for solar will cost about $8,000 over 25 years due to removing and reinstalling panels and one inverter swap.
After running the numbers for both options, I noticed that investing in solar plus using the bill savings could yield significantly higher returns compared to just putting the money into an index fund. I'm curious if anyone can verify my calculations or share their experiences related to solar versus stock investing. What do you think?
4 Answers
You should definitely dig more into the variables around solar energy. Consider whether your system is grid-tied without storage, which might mean buying electricity back at night. Also, think about your area’s reliability in terms of power outages. If you get significant outages, the value of having solar in emergencies could be a major benefit.
I’d recommend getting more solar quotes. You might find that a system costing $18k should be able to save you more like $3,600 a year. If the savings are only $1,800, the setup should be cheaper—maybe around $9,000. Once you have a clearer idea, you can weigh your options better!
Keep in mind that your situation will vary based on local energy prices and regulations. Everything you’re calculating here will differ significantly based on where you live. Prices for kWh or even the cost of installation can change the whole game. Make sure to look into local specifics!
I think there’s a flaw in your calculations. The way you’re treating the $1,800 is inconsistent between the two scenarios. You either subtract it from your investment each year or acknowledge that with solar, you aren’t paying that energy bill, so you could invest more. The comparison would be clearer if you picked one method consistently for both options. Just something to consider!
Yeah, you’re spot on here. That makes a huge difference in the numbers.