Investing in solar energy can free up a significant amount of money that would otherwise be spent on monthly utility bills. This extra money could be utilized for various purposes such as travel, home renovations, children's education, retirement planning, hobbies, or upgrading your vehicle. However, it's important to assess the viability of solar energy as an investment option. How does the return on investment (ROI) of solar panels compare with other investment alternatives?
In this regard, let's examine the ROI of solar energy and make a comparison with the ROI of other investment options.
REASONS TO INVEST IN SOLAR
When asking yourself if solar energy is a good investment, it’s important to look at all the financial benefits solar can provide. The financial benefits of solar include reducing your monthly energy costs, eliminating future energy expenses, freeing up money for other investments, providing price stability, increasing home value, and powering battery backup to prevent loses for power outages.
SOLAR REDUCES ENERGY COSTS
The largest benefit of solar energy is reducing your energy costs. Most of us dread the energy bill that comes every month, always wondering how high it will be this time. It always seems higher than last month, no matter how much you try to conserve energy.
Unfortunately, that monthly energy bill adds up quickly. You might not realize it, but that monthly energy bill adds up to tens of thousands of dollars in no time. This problem is only compounded by energy inflation.
SOLAR FREES UP MONEY FOR OTHER INVESTMENTS
Take another look at the chart above. Look at how much you spend per month on energy and how much that expense accumulates over time. Imagine if you have invested that money instead of sending it to the utility company. How much could that money have grown if it wasn’t spent on renting your energy instead of owning it?
For example, let’s imagine that instead of wasting your money on energy you invested that amount into the stock market. If you invested $100 per month every month for 20 years, and we assumed a 7% ROI from the stock market, you would have seen your portfolio grow to a whopping $52,000! That’s…insane.
But that’s the amazing thing about solar energy. Instead of being chained to a monthly expense to your utility company, you can instead invest in solar panels and use those savings to grow your wealth and realize huge gains over time.
SOLAR INCREASES HOME VALUE
Another huge benefit of solar that often gets overlooked is its impact on home value. Solar panels have been shown to increase home and property values. Multiple studies have shown that homes with solar panels sell for more money.
There are several reasons why homes and properties with solar panels sell for more money. The largest reason why solar homes and properties sell for more money is because of the savings potential. Homes with solar panels can produce their own electricity, which is a large monthly expense for most households. Being able to save that money each money leads to homebuyers paying a premium for solar panels.
This home value increase is even more prominent in areas with high electricity costs. If a household is being charged more per kilowatt, the potential cost savings from solar panels is even greater.
Another reason home values increase with solar panels is because of an increase in environmental concern. Many individuals and families are increasingly concerned about the future of the planet and environment, as well as the future they will leave for their children and grandchildren.
To these individuals and families, solar is not just about financial benefits, but also the opportunities of future generations. To be able to do their part in creating a better future comes with a price they are willing to pay.
SOLAR POWERS BATTERY BACKUP
So far, we have talked about the savings and investment potential of solar energy, but there is one benefit of solar that often gets overlooked: loss prevention.
Power outages cost Australian businesses so much every year. That is a massive chunk of our economy that suffers from a situation that can be easily prevented with solar panels and battery backup.
With solar panels and battery backup, you can charge your batteries during the day and use that power overnight to power your home, business, and charge your electric vehicle (EV). And when the power grid goes down, you can rely on your energy storage to keep you warm, safe, and keep business running.
Imagine the huge costs of losing power during a peak hour of business. You could lose your ability to process payments, communicate with clients and employees, lose power to your equipment, and lose valuable products and customers all within a matter of minutes. But with solar and battery backup, you can keep your operations running, your communications connected, and maintain your valuable products and customer relationships.
And for homeowners, solar panels and battery backup can keep your family safe and warm during a power outage. Energy storage can keep your heating and air conditioning going, your refrigerator and freezer on, and security systems up and running until the power grid is fixed. Those costs are hard to calculate, but many homeowners don’t want to find out the true costs of not having backup power during an extended power outage.
ROI OF SOLAR PANELS
The ROI of solar panels depends on several factors, including how expensive energy is in your area, how much energy your solar system will produce, and how you plan to pay for your solar.
In short, the more expensive your energy costs, the more you stand to gain with solar energy. And the more energy you can produce on your own with solar panels, the more you can offset those energy costs and increase ROI.
IS INVESTING IN SOLAR PANELS WORTH IT?
Looking at the average ROI of various investments, the ROI of solar panels is a strong contender. Compared to other investments that have high ROI, solar energy has much fewer risks and a steady reward and nearly guaranteed ROI. The only thing safer than solar energy might be bonds, but the ROI of bonds is nearly half that of solar panels.
But the question remains: Is investing in solar panels worth it? Is investing in solar panels right for you?
The answer is different for every person or business. Solar panels can significantly reduce or eliminate an ongoing expense that never goes away and constantly increases. But there are several factors that determine if solar panels are right for you.
Solar Secure can provide you with a free solar analysis and calculate how much you could save with solar panels. We can even use advanced solar software to create a 3D model of solar panels on your home.