Homeowner shares the 'true cost' of solar panels as part of a retirement strategy: 'Effectively brought our electricity costs to zero'

A homeowner was planning their retirement and posted some napkin math to r/solar for confirmation. 

The scoop

"I'm trying to retire in the next couple years, so everything I do is seen through the lens of retirement savings. I was thinking about this 'hidden' benefit of installing solar, and decided to crunch the numbers on my system. Our solar has effectively brought our electricity costs to zero, which will only get better post-retirement because I won't be commuting 120 miles per day in an EV," they wrote. 

As it turns out, their solar energy production will effectively make them money by avoiding future costs. This is huge for anyone on a fixed income or with limited savings. 

How it's helping

The financial benefits of solar panels work out even in retirement. By factoring in rebates and tax credits, the original poster figured it cost just a little shy of $30,000 to install their 11.5-kilowatt solar panel system.

Meanwhile, they estimated that $1,792 per year on power from the grid for 25 years would cost them $44,800. That's even being generous since it assumes electrical rates will only go up by 2.5% each year. By their calculation, going with solar means $15,454 in "free money."

According to EnergySage — a platform that offers homeowners information about clean energy upgrades — the original poster's calculation might even be conservative. It estimates that the average U.S. household can save around $50,000 on electricity over the lifetime of a solar panel system.

Solar is more than just the key to a solid retirement, though. Relying on renewable energy means less fossil fuels are needed for heat, transportation, and cooking. Oil and gas produce a lot of pollution, which traps heat in the atmosphere and exacerbates destructive weather patterns. That destruction is costly, too, so in a way, solar panels save others money.

If you're interested in upgrading to solar, check out EnergySage's online tool. It can help you find a registered installer in your area who can offer a quote for a system that suits your needs. 

What everyone's saying

Commenters gave the soon-to-be-retiree's efforts a thumbs up. 

"Our numbers look similar to yours. The panels paid for themselves in 2020 and now produce 7-8,000 kWH for us annually that we would otherwise pay $0.32/kWH for," one said. "So those panels are minting between $2,240 and $2,560 for us every year. We liked this investment so much that we put an additional set of panels in our roof. Solar panels can be a money machine if you play your cards right."

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"With a solar install come other risks that might require repair costs. E.g. hail damages the panel, inverter breaks, etc. low prob but it will reduce expected return," another community member warned. "At the end of 20-30 years you'll have to do something with the panels. That could be a substantial sum to remove, or remove and replace when you need to redo your roof."

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