In New Jersey, Solar Panels Beat the Stock Market with +324% Return on InvestmentBy Matthew Wheeland - June 28, 2010
Say you live in New Jersey and have $25,500 to invest today. Where is the best place to put it for the next 15 years? Stocks??? Bonds???
Try solar panels on your roof.
Let’s face it: for many people, buying solar panels for the home is a serious investment. Here at PURE we knew that solar was a good investment in New Jersey, but we wanted provide our members with a better analysis of the long-term ROI (Return On Investment).
Right now, an investment of $25,500 in a 7.3kW solar panel system for your NJ home would return $108,000 in 15 years! That works out to 324% return on your investment. See for yourself.
How did we figure this out? It’s simple: we started with an average-size solar panel system, took the $$$ you would save on your electric bill + the projected value of New Jersey’s SREC payments over the next 15 years and…voila! $108,000 in your pocket with no strings attached (confused? Learn more about SRECS and the 5 Reasons why NJ is the best place in the country to go solar).
In New Jersey you’ll earn your initial investment back in about 4 years AND get paid more than $5,000 per year for the Renewable Energy Credits your system produces. Over 15 years that works out to an 10.1% annual return on your investment! That’s 3.3% better than the S&P 500 historical average, with virtually no risk. And considering the current instabilities in the stock market, we believe we are being…how can we say this nicely…generous in our projections. It is impossible to predict right now what the stock market will do over the next 15 years, but we do know this: unless something catastrophic happens to New Jersey, investing in solar panels there will provide INCREDIBLE returns!
No Rebate? No Problem.
There has been much to-do lately about the cancellation of the state solar rebate in New Jersey. Typically, rebates like this one offset a large portion of the cost of home solar systems. However, due to a unique combination of high electricity rates, the Federal solar tax credit, and Solar Renewable Energy Credits (which we’ve said before basically turn your roof into an ATM), we think investing in solar in New Jersey is a financial no-brainer. As our CEO famously (at least in our office) stated, “If I could I’d move to New Jersey right now just to buy houses and put solar panels on them.”
If you are interested in learning more about putting solar panels on your home in New Jersey, sign up for PURE’s Southern NJ Solar campaign.
Disclaimer: PURE is not a financial advisor. We recommend you learn about risks and benefits before making any financial investment.
More information on our calculations:
- We used the PURE solar estimate tool, which plugs into the PVWatts API, as well as the most up-to-date information available.
- SREC values were tabulated using current NJ SREC values, SACP penalties (projected to 2025), and the historical trend of the relationship between the SACP and SRECs. More information on NJ SRECs
- Electricity cost savings were calculated using an estimate of average residential energy usage in NJ, current NJ rate for electricity, and a projected cost increase based on the average year-over-year increase in national energy costs since 1999
- $25,500 cost is based on average solar array installation at current PURE turnkey pricing in NJ and includes the 30% Federal tax credit. However, no state rebates were included in our calculations
- Projected NJ solar energy output from the PV Watts solar calculator
- S&P 500 historical real rate of return 1950-2008 = 6.8%
- “Annual return” = Compound Annual Growth Rate (CAGR)
- “324% return” = Simple Rate of Return