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When Electricity is “Free”

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Last Friday, we signed the paperwork with our intent to get solar power.

Over the last few weeks I've been writing about our move to solar power. If you are up-to-date on that you can skip the next few paragraphs. Otherwise, let me bring you up to date. For Earth Day this year, I started to explore whether going with solar power would save me money. Then I forgot about it until the question of leasing solar panels came up on another blog post. That got me motivated to have a company give me a free initial proposal which showed that solar could cover 83% of our energy needs. In meeting with the company, we came up with a revised proposal that would cover 101% of our energy needs.

I wrote about financing our solar panels. That was an adventure in itself as the bank the vendor partners with uses an example loan of 9% interest over 20 years. Fortunately, an alternative is to use home equity to get a loan or line of credit at a rate much closer to Prime (currently 3.25%), which we intend to pay off in 2-3 years. However, a loan with tax-deductible interest at such a low rate is tempting to keep around awhile. I'd still love to get feedback if people would keep a rate like this and use money for investing rather than rushing to pay off the loan.

Finally, I covered the value of "free" electricity. My wife actually used that term. However, it's a common error. I put "free" in quotes, because buying and installing solar panels is anything but free. In fact, the cost for our 7700 watt system is around $33,110. However, after state grants and federal tax credits, the real cost to us is $16,440.

Excluding the financing of that cost (which you can't), we'll have an estimated 8,800 kWH of "free" electricity for many years. It's not an infinite amount. The way it works with net metering is that extra in months of surplus (April through June) earns us credits that we'll use in the peak of summer and winter. At the end of the year, we should come up even-steven... or within a few dollars of that.

In the last article there was a question by Andy of Art of Being Cheap of whether we thought about getting an electric car. Before this move to solar I had thought about it and wrote about it here. However, since then our family has grown and we need an SUV which doesn't really exist as an electric car. Additionally, we have decided that 4-wheel drive is critical for safety on the New England icy roads. The SUVs that are looking to come out don't seem to 4-wheel drive yet.

In the next few years that's going to change. Automakers are starting to announce SUVs that just might fit. For example, there's the 2016 Volvo XC90 plugin that will get 25 miles a trip on pure electricity. After that it will be a gas-based hybrid.

If we have extra solar capacity, my wife could eliminate some of the costs of her commute. Using the solar power from my house to save money on gas is wild! We'd just have to think of how to conserve more electricity at home or pay for new capacity. They say that some of these electric cars get the equivalent of 100mpg. However, our overall cost of electricity is projected to be about half the national average. In some ways, combining the (not so) "free" electricity with the efficiency of these cars would be like getting the equivalent of between 150 and 200 mpg.

Just to get a little "mathy" for minute, I found this comparison of average gas prices per gallon and electric prices per "eGallon" for National and state averages. Nebraska pays 9 cents a kWh and I'll be paying an estimated 6 cents over the long term. Using that eGallon price of 1.21 in Nebraska and applying the simple ratio, it would be about $0.80 cents per eGallon using solar.

I don't know about you, but I find that wicked cool. (I'm so excited that my inner Bostonian is coming out.)

Of course it doesn't stop at charging the car. We have gas heating which is actually priced really low right now. Someone suggested getting a heat pump (more information here). It might be a wise idea, but I'm not sure if it would save us too much money now. If gas gets expensive, it would be worth looking into.

However, we can still use our electricity to save on our heating bills. As part of our move to install central air at the beginning of the year, we got ductless heating and A/C units in the downstairs. These run on electricity and supposedly are very efficient (they earn rebates from the energy company). We could keep the gas heating at a minimum and use the one ductless heating unit in the room that we spend most of our time in.

Finally, there's one great side effect from all this. I'm now more conscious of electricity than I ever was before. When the system is installed I'll be able to view the usage. I imagine it will be like having a bathroom scale around all the time. Right now my electricity usage is like having the scale in the basement... I can get to it, but I don't really think about it and use it. When I have the ability to sign on and see energy use in real time, it could be a game changer. Also, now that I know that saving electricity in one area, lighting for example, can help me save money on gas, it feels more beneficial to conserve our allotment of "free" electricity.

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... and focuses on:

Spending

Posted on October 22, 2014.

Where Will Your Retirement Income Come From?

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The foundation for a secure future is proper retirement planning today. Unfortunately, too many people avoid retirement planning. In fact, according to the recent Retirement Confidence Survey from the Employee Benefit Research Institute, less than half of American workers have performed a retirement needs assessment. This means that most people don’t even understand how much […]

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Financial Planning, Retirement

Last updated on October 16, 2014.

Mark Cuban on Student Debt

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Last week, my wife was flipping through cable channels and stopped on CNBC. I’d say that 999 out of 1000 times, she’d just continue on. However, CNBC was just starting a phone call with Mark Cuban. We are big Shark Tank fans here, so Mr. Cuban gets the clicker stopped. Rightfully so. It’s pretty rare […]

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College

Last updated on October 14, 2014.

The Seven Persuasion Tools of Scammers

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Have I ever mentioned how much I love Lifehacker. It’s must reading for me. Last week, I came across an article Seven Persuasion Tactics Repeatedly Used by Scammers. Regular readers know that I often write about MLM and other scams in this space. I feel that keeping your hard-earned money away from scammers is an […]

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MLM

Last updated on October 14, 2014.

The Value of “Free” Electricity

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Over the last few weeks I’ve been writing about our move to solar power. In case you’ve missed the articles, let me bring you up to date. For Earth Day this year, I started to explore whether going with solar power would save me money. Then I forgot about it until the question of leasing […]

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Smart Purchases, Spending

Last updated on October 9, 2014.

Start a Business Today (and I Will Help You)

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When I started Lazy Man and Money, I started it with the idea that I would explore opportunities to make more money and retire early. I still remember one of my second posts was about a condohotel in Vegas that I was interested in buying into. I thought it was in interesting investment because you […]

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Blogging, Entrepreneurism

Last updated on October 14, 2014.

MoneyStepper on Escaping the Rat Race

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[Editor's Note: The following is a guest post from Graham Clark at MoneyStepper. It's rare that I accept a guest post from outside North America as what works there, might not work here. However, I found his story inspiring and that's relevant everywhere.] The rat race. We all want to escape it. But, why? What […]

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Financial Freedom

Last updated on October 7, 2014.

Financing Our Solar Panels

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Have you been following our move to solar power? In case you haven’t let me bring you up to date. For Earth Day this year, I started to explore whether going with solar power would save me money. Then I forgot about it until the question of leasing solar panels came up. I got of […]

This post deals with:

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Financial Planning

Last updated on October 8, 2014.

LifeVantage Axio Analyzed

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Regular readers know that I’ve exposed LifeVantage’s Protandim scam in excruciating detail. They went as far as creating a FAQ of lies about me to spread to their salesforce, which I’ve thoroughly debunked in detail. Soon after that FAQ was created, LifeVantage’s “Protection” sent me death threats anonymously. That article makes a strong case that […]

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LifeVantage, MLM

Last updated on October 9, 2014.

Moving Forward With Solar Energy (Part 2)

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Earlier this week, I wrote about how I am investigating a move to solar energy. I highly recommend reading that article first. There’s a lot to learn about solar energy in general and this article builds on the information in that article. In addition, the decision to go with solar is highly dependent on one’s […]

This post deals with:

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... and focuses on:

Smart Purchases, Spending

Last updated on October 8, 2014.

 
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