When people consider purchasing solar panels for their homes, they often focus on saving money on their energy costs, what the ROI (return on investment) is for the system, what the cash flow scenario will look like for selling their SRECs, etc. All of these are important things to consider, but there is more to solar energy than just saving money or even improving your financial position.
The concept I’m alluding to is something that I see as a fundamental element of wealth generation: creating instead of consuming, controlling resources instead of just consuming them.
When you go solar, you are creating something that is equally as valuable as money. Energy is an incredibly precious resource, even more than the money I would argue. Solar energy is a game-changer; you are creating energy, and if you create more than you consume, you can sell that excess at a profit.
Why Many Solar Clients Do Not Care About Saving Money?
When I first got involved in the solar industry, it was to build a successful business offering something that helped people save money on their energy bills and reduce their carbon emissions.
But over the years, as we grew the company, I began to better understand our clients, myself, and the deeper values of investing in solar.
There is a lot of emphasis place on saving money in the solar industry, but the more systems we installed, the more I gained a better understanding and deeper appreciation for what solar actually does for you as an investment.
Everyone Wants To Save Money, RIGHT?
WRONG.
If all you’re looking to do is SAVE MONEY with solar, OWNING a solar electric system probably is not right for you. Here’s why…
There are lots of free, low cost ways to save more money. Something as simple as cancelling your premium cable T.V. package might save you $100 a month.
In fact, there are plenty of fast, easy, no-money down leasing options available for solar these days. So, why would you ever invest $15,000-$25,000+ or more just to save money on electricity?
Investing Money Is Very Different From Saving Money
Solar is a sophisticated investment for people who understand and can benefit from multiple areas, not just saving money.
The reality is, for many of my clients, saving money is pretty far down on the priority list. This may sound strange, but here are the benefits we focus on…
- Long-Term Cash Flow
With solar, you can practically guarantee what electricity will cost over the lifetime of the system, which by the way happens to be 25-30 years.
This is incredibly valuable for someone who thinks in terms of long-term cash flow. This is not so beneficial to some who does not have a long-term plan.
Many people have a hard time sticking to a plan 1-2 years out, let alone 10, 15 or 20 years.
- Investment of Surplus Cash
When your basic needs are met and your household or business is accumulating cash, you have to invest it somewhere.
Saving money becomes less important, and INVESTING becomes the primary focus.
While holding some cash is smart, holding too much cash for too long is simply not wise due to the fact that it produces a negative return annually.
With each day that passes, your cash is losing value. You have to invest it as quickly as possible because it is losing purchasing power. The stock market, real estate, gold, etc…are all options.
This is where solar comes in…
Solar yields a high return on invested cash, not to mention it is relatively passive. Once it is installed, it will require very little time and work to keep producing a consistent, stable return.
However, if you are not in the position of having too much cash, than you won’t even be able to see this benefit.
- Increased Net Worth
Just like with cash flow, many people don’t process financial decisions as they relate to their overall net worth. Installing solar panels on your home or business creates an asset that adds to your net worth.
And just like the “too much cash” problem, if you don’t think in terms of net worth, this benefit will be of little value.
- Tax Advantages
Have you ever written a BIG check to the IRS? If you have, then you know how painful this can be.
There are numerous ways investing in solar can help reduce your tax liability. But if you have never written a big check to the IRS, you might not fully internalize the value of this benefit.
If all of your income is “W2 type” income, there is a detachment from the taxes you pay. You are still paying the taxes, but since you don’t physically write checks to the IRS every quarter, it feels different.
- Wealth Control
Strip away all the financial benefits of an investment and what are you left with?
- With cash, stocks, and mutual funds, you are left with nothing but a piece of paper or—more accurately these days—digits on a computer screen.
- With real estate, you are left with physical structure or place to provide shelter.
- With gold, you are left with a precious metal that has trading value.
- With solar panels, you are left with something that produces energy that can be used or sold.
When Money Is Not The First, Most Pressing Priority For You And Your Family, Other Things Start To Become More Important.
With many of my personal clients, independently producing electricity for their family or business is much more of a priority than the financial benefits of solar.
But if money is your first, most pressing priority, you might not even see this benefit. Your more immediate needs will take precedence.
There many reasons why people become INTERESTED in solar. But, being interested in solar and actually making the decision to invest are two different things.
If you are not able to see or take advantage of the deeper benefits solar has to offer, you are probably going to have a difficult time justifying the final investment decision.
Take the time to fully understand your situation and what you are hoping to accomplish by investing in solar panels for your home or business.
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