Solar? Is it Worth it?

Hey, DIY Money.

This is Ronnie from Honolulu.

I wanted your take on investing in a PV solar system with a battery.

Here in Hawaii, I feel it would be a great investment, and AI stated that the projected return on investment would be about five to nine years, which might be longer now since the federal tax credit has lapsed.

Uh, my follow-up question to this is, if we were to invest in a solar PV system, is it worth it to take away margin to pay off a mortgage or debt to reinvest in this PV system? Um, looking forward to hearing your take on this.

Love your show.

Aloha.

[notification sound]

All right, Ronnie.

Uh, love Hawaii, love the question.

So in full disclosure, I recently put solar on my home.

Now, this is the second time I have looked at this as an option.

The first time was four or five years prior.

I did not pull the trigger at that time.

Mm-hmm.

And I'll tell you why.

Um, I ran the numbers, and I run out a spreadsheet that shows our projected utility bills every month going up.

I have a variable on the spreadsheet that basically, okay, if it goes up by 3% and it, you know, changes all the variables, it goes up by 5%, yada, yada.

Okay, then I took the cost of the solar, I put that on another line.

I, I c- I put a 5% annualized return on that amount- And I, I factored that out, uh, to the right as well.

And I looked at it, I said, "Okay, 10 years, 20 years, 30 years." It never made sense.

Okay? It, it never made sense.

And I thought it was humorous because the guy who came to me to pitch it to me, this is years and years ago, he said...

He, his calculation had to do with, um, a pay- like borrowing the money, you know, paying off the interest, and his whole principle was this: You are going to pay the same, uh, payment roughly f- that you, you would pay us that you're paying in your utility bill, okay? Mm-hmm.

However, it's fixed.