Money Talks

Share

Money Talks: Solar Panels

Friday, October 18, 2019




Let The Sunshine In!



For quite a while, I’ve been interested in solar. Fifteen years ago, when I began investigating, there was no one in Mississippi selling or installing solar systems. It seemed just a pipe dream.


Lately, more and more companies are popping up to provide this service. So I decided it was time to get serious. The other thing that pushed me to pursue this option was the lucrative tax credit offered on a solar installation and the fact that this credit was disappearing at the end of the year.


I had to convince my husband to go down this path. Wouldn’t the panels on the roof of our house detract from its appearance? Would future buyers really care about having solar panels? Did this really make financial sense?https://www.nerdwallet.com/blog/finance/save-money-putting-solar-panels-roof/


We met with two different companies. The first was all sales. There was no schematic showing where the panels would be located. No spreadsheets showing usage and payback period. Just a promise that the sun would provide ALL our electricity, and we would only pay a small connection fee each month. Wow! That sounded great.


Of course, if you install solar panels on your roof, you need to consider the age of the roof. Solar panels are designed to last about 25 years, which matches the age of a new roof. If you put on a new roof 10 years ago, this changes the calculation. Most installers prefer to put their panels on a new roof. So now you’re not just paying for solar panels, you’re paying for a new roof.


Of course, we were told if you couple the two, you may be able to get the tax credit applied to BOTH the panels and the roof. That sounded appealing. What is the tax credit, and when does it expire? It’s 30% of the cost, and it IS a credit, not a deduction. That means a dollar for dollar savings on about a third of the project. To qualify for the year-ending tax credit, I would need to sign up quickly (or so I was told).


A few qualifiers…


You are only supposed to take the credit on roofing for the portion of the roof actually under the panels. And in order to get the full advantage of that credit, you need the income (and the tax associated with it) that is big enough to offset that 30% break. Many retired people don’t have enough tax to pay now to take full advantage. Again, a change in calculus.


The second guy showed up with a laptop full of charts and graphs. He pointed out the direction the house was pointing, how the sun changes during the year, and the many shade trees surrounding our roof. He climbed on the roof with his many gadgets to verify his estimates. Full electricity? Not so much. He expects we could supply about half of our electricity with solar, and this would take many more panels than the first group suggested.


And now we’re confused. I really wanted to go solar. It seems like a great idea. We would be using a renewable resource. If the power company keeps getting rate increases, won’t that eventually pay off?


Turns out our payback period would be about 12 years, under a generous set of estimates. Also, we would have to load up our roof to get the most of the system. My husband is shaking his head now. Ultimately, the overall cost of panels and a new roof was now hitting the $40,000 to $50,000 range. Even with a generous tax credit, the dollars made my head spin.


One caution—many solar companies sell customers on a system by offering financing that matches what you were paying on an electric bill. Sounds good, right? But the rate on those financings is in the 7-8% range—not cheap! Also, what happens if you sell the house before you pay off the loan? Maybe you move, but you still have to pay that monthly bill.


We planned to pay the full bill up front to make this a purely economic decision. The problem we encountered is that our electricity is pretty cheap. The price per kilowatt in our area makes going solar unreasonable. I tried. I really tried, but in the end, it just didn’t make sense.


So we’re not going to spend $40,000 to $50,000 on an environmentally friendly and sustainable source of energy. We’re not going to be the progressive family in the neighborhood doing our part on climate issues. I had to give up my pipe dream.


Instead, I’m going to redo the kitchen.


https://newper.blogspot.com/2019/10/let-sunshine-in.html

More Episodes

5/19/2020

Money Talks: Whats New?

What's going on in Mississippi this week?We are still under the Safer-at-home Executive Order number 1477 that was extended and remains in effect until Monday, May 25th. Governor Tate Reeves is encouraging all of us to stay at home unless engaged in Essential Activities or Essential Travel. Gov. Tate Reeves has expanded social distancing guidelines for Attala, Leake, Scott, Jasper, Neshoba, Newton, and Lauderdale counties. Businesses in these counties must screen employees for the coronavirus. People have to wear masks if they cannot social distance at their jobs and masks must be worn during retail, live auction and flea market shopping.https://www.sos.ms.gov/content/executiveorders/ExecutiveOrders/1477.pdfhttps://www.sos.ms.gov/content/executiveorders/ExecutiveOrders/1480.pdfThe governor added some benefits for the unemployed. https://www.coronavirus.ms.gov/2020-04/governor-reeves-extends-unemployment-workers-impacted-covid-19Calls concerned:credit card ratesa 2nd EIP check?wife lost workdo dependents get checks?where's my check?unemploymentyou need your AGI for "Get My Payment" at the IRSchecks to deceased individualsLooking for a way to make more money?consider online tutoring sites like Chegg or VIPKidselling handmade products such as jewelry or greeting cards on ETSYdelivering food for DoorDash or GrubHubDelivering groceries for companies such as Shipt or Instacart selling books on Amazon Marketplace or other items locally on Facebook Marketplace offering to your services to neighborsyards maintenancedog walkingsupervising childrenoutside or in a park – if you already have a relationship with the family.https://www.inhersight.com/blog/how-to/make-money-during-coronavirus-pandemic?_n=92545989#Also consider taking a class in contact tracing so you'll be ready for the job market when Mississippi starts hiringhttps://www.coursera.org/learn/covid-19-contact-tracing?edocomorp=covid-19-contact-tracing
5/12/2020

Money Talks: Credit Counseling

Guest: Bruce McClary from the National Foundation for Credit Counseling https://www.nfcc.org/DATES TO KNOW: Submit your banking information to receive direct deposits of Economic Impact Payments by 11am Wednesday, May 13th, 2020. Mississippi Income Tax Returns and Payments are now due July 15th, 2020.Topics on the NFCC's website include - 10 Smart Ways to Reduce Expenses and Tighten Your Budget to Make Your Stimulus Check Last, Tips for Making and Managing an Emergency Budget; Should You Access Your Retirement Funds Early Due to COVID-19You can hear Bruce McClary give additional information on NFCC's Fin Bit Podcast https://open.spotify.com/show/6I2jbwF7mg9BxU3ywhdEUQDiscussions coveredEviction and Foreclosure Suspension for Homeowners Facing Difficulties Making Mortgage Payments https://www.nfcc.org/resources/blog/eviction-and-foreclosure-suspension-for-homeowners-facing-difficulties-making-mortgage-payments/Mortgage ForbearanceRefinancing https://www.nfcc.org/resources/blog/5-ways-to-still-refinance-your-mortgage-with-a-less-than-perfect-credit-score/Warning about " housing relief" scams https://www.nfcc.org/what-we-offer/foreclosure-prevention-counseling/foreclosure-rescue-scams/Credit card debt https://www.nfcc.org/what-we-offer/emergency-credit-card-help/Free weekly credit report https://www.annualcreditreport.com/index.actionBruce was a guest on the July 3rd 2018 Money Talks broadcast http://moneytalks.mpbonline.org/episodes/5cd31f1533f6c1be55607d7c