Reply #2: Unfortunately economical solar remains elusive. [View All]

[Statistical]

Over the years I have contemplated installing PV array on my home and even have software to calculate return on investment.
Often times people look at "break even time" but that is a useless metric.

If you have a break even time of 20 years that means after 20 years you have paid back the principle but "earned" 0%. The money spent on solar instead could be put into 20 year treasury bond. After 20 years you won't have broken even (which is 0.000% return) you would have 98% more money (at 3.5% compounded over 20 years). So for solar to make financial sense (there are other non-financial reasons to install solar) the lifetime return on investment should be higher than what can be earned with no risk (Treasury bonds).

With current prices and subsidies plus free labor (DIY) over a 30 year lifetime an array generates a return of less than 1% in my area (4.95 solar insolation) vs 4.67% on 30 year Treasury bond. With no federal subsidy it is a negative return. Which means over lifetime of the array the electricity produces will be worth less than the cost of the array.

That is even with taking into account favorable assumptions like grid energy prices rising 5% per year, solar panel outputs only decaying at 0.4% per year (about half of warrantied output), free labor/install, being able to finance via HELOC at 6%, and being able to deduct entire interest expense.