3 Replies Latest reply on Oct 20, 2011 10:32 AM by JRR

    Alternative investment: solar energy

    Durward
      If you are thinking about investing a portion of your portfolio in a lifetime annuity, consider the alternative of getting a higher payout by investing in a solar photovoltaic system for your home.  In certain areas of the U.S. you can get a 6 percent (non-taxable) yearly payout (divide the savings by the system cost) that will exceed the payout you can get from an annuity contract.  And you will be well-protected against inflation because savings will rise as electric rates rise, unlike an annuity.
       
      How much would you need to invest?  Probably somewhere between $20K and $40K for a 5 to 10 kilowatt system delivering $1000 to $2500 in savings, depending on where you live.  Not much to be sure, but worth thinking about in many regions as part of a safe, long-term investment in a diversified portfolio.   
       
      Solar PV is not for everyone.  Those living in more north central areas may not find solar very efficient, but even there, subsidies and other incentives can make it worthwhile for the individual homeowner.
       
      Full disclosure--I'm not an investment advisor but a retiree living in the desert southwest who is very satisfied with the performance of a 10K solar PV system that has provided 90 percent of the power for my home over the last three years. 
       
       
        • Re: Alternative investment: solar energy
          JRR
          Yours is the best advice I have received to date on prudent investment of retirement nest egg...I would consider solar right now, but I plan to live in my current home just another 1-2 years; but when I retire and move in 2013, going solar will be olne of the first things I will do - thank you for sharing your thoughts and experience - 
          JRR 
            • Re: Alternative investment: solar energy
              JerryD
              We have an energy consultant, architect, ex-government energy employee in our area that did solar and then gave up on it due to poor payback. He also represents electric co-ops in many states.
               
              The idea of investing in energy saving items is however one of his big themes. He says that it has a better return than many investments. So the advice is good just do the numbers very carefully before concluding that solar is the best choice. This guy swears by geothermal, especially in a new home and with Federal and state credits. He will also review your house plans for a reasonable fee and guarantee a monthly energy cost if you make minor adjustments in construction. His argument on a new house involves comparing the additional cost of doing it right versus the energy saved which results in a net lower operating cost you can pocket for the life of the house if you finance the upgrades. 
            • Re: Alternative investment: solar energy
              JRR
              I realize that all energy saving technologies have a downside - especially in recouping the initial investment - this may be more so with home heating, given the current glut in the natural gas market - my gas bills remained unchanged or declined a little last  five years.  Part of the appeal of alternate energies is the hype and glamor; my nice and her husband made their Boulder,CO 100% energy neutral and even feed a little into the power grid, spending more than 50% to the home's purchase price! But their home was featured on Discovery Channel and they attract lots of friends! 
               
              My Toyota Prius, with tax credits, cost me $3,000 grand more than a Corolla, but over 80,000 miles, saved about $2,000 in fuel  costs...and, given its very high quality of engineering, will easily do another 80,000 miles.