Investing in Solar: Better Than the Stock Market?

Investing in Solar: Better Than the Stock Market?

A recent study found that in 46 of America’s 50 largest cities, home solar systems can be a better investment than the stock market.

The study, titled Going Solar in America: Ranking Solar’s Value to Consumers in America’s Largest Cities (PDF) was funded by the US Department of Energy and performed by the North Carolina Clean Energy Technology Center. It found that the majority of U.S. homeowners who invest in a typical 5-kilowatt solar photovoltaic (PV) system would be making a better investment than if they put their money into the stock market.

A primary goal of the study was to dispel a “clear information gap” between the perception and reality of solar affordability: “Solar is now not just an option for the rich, but a real opportunity for anyone looking to take greater control over their monthly utility bills and make a long-term, relatively low-risk investment,” it said.

Further, the report also estimates that some 9.1 million Americans live in a city where solar costs less than current utility rates, even when a PV system is bought outright – dispelling the notion that solar energy is either for the wealthy or only viable on a lease or loan basis. Additionally, low-cost financing models make solar the cheapest energy option for nearly 21 million Americans!

Despite the myth of solar not being affordable, there does seem to be a growing segment of the population willing to make the investment.  “This study proves once again that solar makes great financial sense for a large number of Americans,” said Solar Energy Industries Association (SEIA) CEO and president, Rhone Resch. “Every three minutes of every single day, the U.S. solar industry is flipping the switch on another completed solar project, benefiting homeowners and businesses nationwide.”  In fact, according to recent numbers provided by GTM Research, a new solar PV system is installed in the US every two-and-a-half minutes. The SEIA stresses that solar’s impressive growth in recent years must be maintained, particularly now that it is largely provable that PV systems are one of the most affordable energy sources. Recent SEIA/GTM Research findings state that the national blended average system prices for solar PV have fallen 53% since 2010.

Home Solar Panels
Home solar installation with roof mounting.

Major policies such as the Federal Tax Credits signed into law in the Emergency Stabilization Act of 2008, the Solar Investment Tax Credit (ITC) for Corporations, California’s Net Energy Metering (NEM) program, and the Renewable Portfolio Standards (RPS) play a large part in the success of the solar industry. According to the SEIA, the US solar industry is employing over 143,000 people and boasts more than 20 GW of capacity – enough to power four million U.S. households, while pumping more than $15 billion into the US economy — always an important figure.

“By any measurement, these policies are paying huge dividends for both the economy and our environment,” Resch added, and I couldn’t agree more.

With 50% growth in each of the past three years, and the average price to install residential solar falling to $3.92/watt, solar energy investment is now a seriously viable energy option for all Americans – not just wealthy homeowners, off-gridders, or environmentalists.

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