We are once again looking into how we might be able to install a solar array on our roof. The finances are tough for us right now, but there is some incentive to get some installed because the Buckman Historic Association has decided to go through with submitting a nomination for our neighborhood as a historic district… Were this to go through, the installation of solar panels in our part of Buckman would become nearly impossible.
So anyways, with this in mind, we have run through what our expenses would look like under three different scenarios:
The chart above shows the cumulative income at each year were we to purchase panels outright (blue), get a loan which we would pay down fast as our tax credits roll in (red), and get a loan that we would just pay off simply (Yellow). In this analysis, we are primarily interested in two things: payback time, and peak deficit (size of deficit, and when it occurs). Things to note on this, this is for a 2.04 KW system priced by Solterra Systems (who also estimated energy savings), the up front costs to us after energy trust incentives would be $9,728. Under the purchase outright option that would be our peak deficit at the end of year zero, but because there would be a large tax credit just a few months later, we start this chart with year one. The loan is an Umpqua Bank Green Streets loan (no down payment, 6.5% interest, 60 month term).
The interesting thing about this, is that the no loan option has about a 7.5 year payback, both of the loan options have us in deficit for about 9.5 years… The option where we pay back fast starts that deficit immediately with a peak deficit of $3,962 at year two, while with the one where we don’t aggressively pay off, we are at positive cash flow for the first three and a half years and are then negative until year 13 (2026) with a peak deficit of $2,514 on year five. So that third option is in some ways the easiest financially with the least risk, but it also most relies on the feel good aspect of a solar installation, not seeing a for real benefit until way in the future.
Having said all this, we have yet to reach a decision on what to do.