Investing in solar power is a lot like investing in real estate, with a few added benefits. Here's why solar pays off in the long run.
Have you ever considered owning an investment property? Whether you have thought about it or have done it, most people would agree that it is a solid addition to any portfolio.
After you make that buying decision, you focus on getting a quality renter into the property as soon as possible, so you can use their rent money to pay the mortgage. You hope to make a little money, keep the workload down, build equity and have the investment pay for itself.
Smart investors will take their net gain, apply it to the principal and pay it off in a much shorter period. When the mortgage is paid in full, all the rental income flows to you, the investor.
What does this have to do with solar?
A lot! In fact, solar is a much more stable and safe investment. Unlike real estate, you already have a built-in renter – your utility company. When you purchase a solar system for your home, you are not paying anything extra out-of-pocket each month. You are simply reallocating the money.
Did I pique your curiosity? Let's look at a simple example below:
You pay $200 per month on average for your electricity.
Stay with your utility company:
- $200 per month – electric bill
- Rates increase
- No added home value
Switch to solar:
- $25 per month – electric bill
- $160 per month – solar
- Save $15 per month
- Rates are leveled (net metering)
- Added home value
You are spending $200 either way, but switching to solar comes with a few added long-term benefits that will ultimately put money back in your pocket.
Now, let's say your electric company knocked on your door today.
KNOCK, KNOCK, KNOCK.
Electric Company Representative: "We here at XYZ Electric company want to thank you for the thousands of dollars you’ve paid us over the years. Because you are such a great customer, we are going to give you a FREE solar system for your home. You pay nothing extra. Simply pay your bill every month and we will give you the system in 12 years. After that, you won’t owe us a dime and you can keep the solar system forever."
Would you do it?
My guess is most people would. You are not paying any more than you normally would, you are adding home value, and you have a light at the end of the tunnel: After that 12-year period - it’s yours! You now own your power and are not at the mercy of the electric company’s regular rate increases.
I don’t think your electric company will come knocking anytime soon. However, buying an investment property (solar) and finding a great renter (your electric company) can happen now. You are simply using them to pay your mortgage (monthly solar payment). Seems like a no-brainer to me.