02
Jul 2008

The Road To Solar Panels

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We’ve added a new financial goal to our list. We want to install solar panels. We’ve been talking about it for years, but the price made the possibility unrealistic (at least $12,000 to put in enough panels to power our house, and even that would require that we cut back further on our electricity use). Last week, we decided that $12,000 only seems unrealistic because we’re looking at it as one big chunk. So we opened an ING account called “solar panels” and put $300 in it. We’ll be putting $300 into the account each month, until we have enough to install solar panels on our roof. Our other financial goals will still be priority – funding our IRAs and our HSA, paying off our HELOC, and funding our son’s 529 plan are all above the solar panels on our list. But we’re determined to make it work anyway. This year, we’ve already made the maximum contributions allowed to my husband’s IRA and to our HSA. We’re working on the HELOC every month (goal is for it to be gone in the summer of 2010). My IRA still needs $4000, but that will be a priority this fall. Our son’s college plan is set up with an automatic contribution every month. So even though it’s a lot to juggle, we’re feeling pretty on top of our various money goals. One more should be manageable.

I quit my job at the library in order to be home with our son – he now has two work-at-home parents. I’ll be going back on a very part time basis (12 – 16 hrs) in the fall, but for now all of our income comes from our insurance agency. Happily, we’ve been busier than ever this year, and our income is nearly at the same level as last fall, when I was working both jobs. I was putting 25% of my pay into a retirement account, so the take-home pay from the library job wasn’t too high anyway – we should be fine without it. But in the last few weeks, we’ve added $400 to our monthly money commitments ($100 for our son’s college fund, and $300 for the solar panels). So things will be pretty tight around here again. We don’t mind – we’ve been there before, when we were paying off debt. And it feels much better to be on a tight budget because we have lots of savings projects going on, than to be on a tight budget because we’re paying off debt.

Related posts:

  1. Painting, Solar Cooking, and Hot Water
  2. A Solar Oven
Category: Debt, HELOC repayment, organic living, savings
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  • http://www.grovesfamilyhappenings.blogspot.com/ Kelly

    I have heard that you can lease or rent to own solar panels. That way you don’t have to wait until you have all the money saved up to start using them. Installation is part of the price. Of course, I haven’t priced them out, so I don’t know if they end up costing more in the long run, but it might be something to check into. I would love to do solar panels, but I don’t think Chicago gets enough sun.

  • http://www.unknownfutures.blogspot.com MP

    Doing solar panels on your roof sounds like a fine idea. Have you decided on a specific system? Have you considered doing a solar hotwater heating system too?

    What part of the nation are you in? My sister and her husband are considering a couple of small windmill type generators in addition to solar panels. They are in an area of the Pacific NW where it is very windy and sunny. After installation, they will be completely off the grid. They aren’t radicals, they just don’t want to be dependent upon the utility companies with rising utility costs.

  • http://www.unknownfutures.blogspot.com MP

    Opps – I forgot to mention it – my condo building was interested in installing solar panels as a means of reducing our rising utility costs. We knew the cost of the system, but we wanted to make sure we would achieve a decent ROI, so we had an energy consultant come and review. Turns out that solar panels was not a good solution. There would be very little ROI, and, for the most part, it would be as if we threw our $$ away. So, we’ve invested in flourescent light bulbs throughout the complex – every light fixture in every home and public space. The result – our year-over-year cost is 6% less!

  • http://almostfrugal.com Kelly from Almost Frugal

    Sounds great!

  • http://notesfromthefrugaltrenches.com Frugal Trenches

    How brilliant! Here in England lots of people are getting solar panels, we do have some grant schemes, which once I downshift,I plan to take advantage of and get solar panels, possible a small wind turbine and an outdoor oven and shower.
    Really enjoy your blog!

  • http://www.unknownfutures.blogspot.com MP

    In response to the first post regarding the renting of panels – if the goal is to “save” money, this won’t work. The programs where you “rent” the panels monitor your energy usage and then your “rent” is based upon your per kilowatt charge from the utility company. With this program, you are “going green” but not saving $$.

  • http://frugalbabe.com Frugal Babe

    Thanks for all the comments everyone. We’re still in the early stages of planning this, and haven’t settled on any one system yet. We just know that whatever we get is going to be a lot more expensive than we can afford unless we save for a few years beforehand, so we’re starting now. And maybe if solar energy becomes more popular as the price of oil rises, more manufacturers will get into the game and the price will come down.
    We know that solar is not a frugal solution – it’s a lot less expensive to just buy electricity from the power company. But we also feel that solar energy use is good for the planet and it would be nice to be “off the grid” so we’re willing to save up our money and do this, even if it’s not the most financially practical solution.

  • PaidTwiceSpouse

    I read in a news article about a year ago that solar panels have been dropping in price over time. If true, then hopefully the cost will be less than 12k by the time you have the money saved. Any idea how long panels are supposed to last?

  • http://www.outofdebtagain.com Mrs. Accountability

    FB, I thought of you as I ran across this site: http://www.professorshouse.com/your-home/environmentally-friendly/questions-about-solar-energy.aspx It says some states, like New Jersey and New York rebate up to 70% of the cost of installing solar panels. Wow! They say 24 states offer rebates. Maybe your state is one of the ones that do. I have wished we could get solar panels. We are spending such outrageous amounts on electricity ~$4000/year, ours would pay for themselves within three years. I have heard in our state we can actually sell electricity back to the electrical company.

  • FrugalBabe

    Mrs. A – We looked into that, but our state doesn’t rebate any of the cost :( We can sell back to the grid though, if we make more electricity than we use. We have pretty low energy bills (average of about $110/month over the whole year, including gas and electric and the wind energy surcharge) so it would take a while to recoup our money. We’re doing it more for the purpose of reducing our carbon footprint. Hopefully the cost will come down by the time we can afford them, or maybe our state will get on board with rebates!

  • Msnln

    With cost of electricity rising with everything else, it may be prudent to take out a loan to have solar panels installed. Where I am, electric utility paid about 40% of intallation cost with the rebate and with state and federal tax credits, I ended up paying less than a third of actual cost. With increased installations, electric utility’s rebate was coming down so I did not want to wait any longer.

    I got mine installed two years ago and estimated my return on investment at the time to be eight years. Since then I have not had to pay any more than basic line fees for most months, and on top of that, I am using electric space heaters to use up excess electricity generated by the panel during winter months, which cut my heating oil bill be a third. We took out a home equity line of credit to pay for the panels and having panels installed was one of best things we did, especially since we did not anticipate such quick rise in rates. Now, I think we can recoup of costs in 5-6 years.

    We would like to have solar water heater installed for hot water but we do not have enough roof space for it. Since natural gas, which heats our water, is up 20% plus this year, I am considering installing electric instant hot water heater to rid of my gas bill and cut electric usage elsewhere to compensate for water heating.

    BTW, there were contractors who offered interest free financing for two years, but their installtion costs were bit higher to compensate for this expense.

    Please feel free to contact me if I can answer any questions.

  • http://dividendgrowth.blogspot.com/2008/01/how-i-outperformed-market-and-how-you.html Dividend Growth Investor

    FB,

    Is your current state a secret? I would love to know where you can sell your extra electricity to the grid.
    Actually leasing the solar panels might turn cash flow positive or at least neutral for you easier than buying and paying all the money right away.

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