Apr 10
22
Celebrate Earth Day with Solar Panels
A few weeks ago we had an article from Steve Stillwater on going green to attract buyers and tenants to your rental properties … well today is Earth Day so I invited Steve to contribute another post on another earth friendly topic that just might interest real estate investors: Solar Panels!
I am a big believer that little actions done consistently produce big results. Little things like turning off the lights when you leave the room, changing the lightbulbs in your house to CFL’s, unplugging appliances when they aren’t in use, turning off your computer at night and turning off the water while brushing your teeth done consistently over many years will result in significant benefits for your pocket book and for the earth.
Sometimes though doing something big can produce massive results fast. Today we’re going to talk about one of the bigger earth friendly moves you can consider making on your own home or even your investment properties. And having installed solar panels himself Steve is going to talk about these energy savers from a first hand experience.
Solar Panels: A Green Home Improvement and Also An Investment
Installing the solar panels on Steve's house
Solar panels have received a lot of attention as a way to “go green.” But, due to the relatively high up front cost of installation, the financial benefits are less clear. In fact, the most direct benefits of solar panels are financial ones, and the return on investment is probably a lot better than you think. Here’s why.
First, your solar panels will enable you to generate your own electricity as long as the panels are receiving direct sunlight. The cost of electricity at your home will go down significantly. During periods when your solar panel system generates more electricity than you are using (essentially the times when you are receiving sunlight), you will often sell electricity back to your provider if you have net metering. As an example, my electric bill two months ago was $14 (compared to about $250 BSP (before solar panels). Last month my bill was $0; in fact, I built up a credit that will offset future usage.
A significant benefit, and the one that is most often overlooked, is the following: Solar panels add value to your home. Any potential buyer will take into consideration the value of the panels and the lower electricity cost they will enjoy as new owners, especially if you make that part of your promotion.
Your return on investment from solar panels is probably better than you think. The upfront installation cost may seem high, but depending on the tax credits and rebates that are available where you live, a return on investment of around 6-10% is reasonable to expect. In my specific case, the initial investment after applying credits was about $29,000 for professionally-installed panels (if you are handy, you can lower your cost by doing some of the work yourself), with current annual savings of about $3000, equating to a return of just over 10%. Bear in mind that this a highly reliable rate of return that will only get better in the future as electric rates rise. Don’t get fixated on payback time. Think of solar panels as a long-term investment that pays off over a number of years like a bond.
Another benefit: solar energy generated at your home emits no greenhouse gases—at all. The electricity produced is green and clean. The knowledge that solar energy is “greener’ and reduces your carbon footprint is an intangible benefit that will help encourage a purchaser.
Solar panels are also silent. Unlike gas or oil-powered generators, the only sound you will hear is a faint, pleasant-sounding hum from the transformer that converts DC from your solar panels to AC for your home electricity.
Installed on your roof or another location that receives direct sunlight, solar panels are an excellent way to save energy, promote a greener lifestyle, add value to your home, and provide a decent return on investment. Then, when you decide to sell your home, the presence of solar panels will raise the profile of your home compared to other comparable houses on the market and provide added value, both tangible and intangible, that will encourage stronger demand and a higher selling price.
To your greener lifestyle,
Steve Stillwater
Steve Stillwater promotes healthy, green lifestyles, with easy-to-implement ideas to use less energy, conserve resources and save money. He writes regularly about practical tips and ideas for developing a greener lifestyle at http://www.LivingGreenandSavingEnergy.com
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Web site and blog: http://www.LivingGreenandSavingEnergy.com
