I've been looking into Solar for my house and it's hard to justify. A $15,000 installation pays back only $150 a month in electricity. This is little more than what I could get by putting that $15,000 into a mutual fund.
Yet solar panels do not produce nominal cash flows, they make energy - a real good. Energy inflation for urban consumers in the U.S. has averaged, month-to-month annualised, 6.7% over the past 10 years. This raises your IRR to 16.3%. The closest maturity-matched non-callable bond is TXU's 2034 6.55 yielding 15.2% to maturity and rated CC by Fitch.
Even allowing you to capture only 1/2 of the energy inflation, your return is 12.7%. A whole point south of Venezuela. Then again, a warranty from a solar company may be worth as much as a dollar lent to Caracas...
Utilities are regulated to limit their rates to guarantee minimum profitability, so their price must be correlated to their cost.
Ergo, electricity costs will drop. Your rooftop PV system is never going to be much cheaper, if ever cheaper at all, than the electricity that the utility will provide from utility scale PV that has been installed much more cheaply, and much more optimized than the arbitrary orientation of your roof.
I need different mutual funds.
Edit: I am not on the ball tonight
I guess I'm always suspicious of free money.
Oh, duh. My mistake. I can't even claim "it's late, I'm tired"
1% a month, 12% a year on stock price? This is utterly impossible, the stock price would have risen. But if you can tell me where I can get 1% a month for some N$ investment, please share!
My understanding is that many people invest in solar panels because of additional government incentives.
I think your math is wrong somehow.
If it's the former it's still a good investment. If it is the later it's a way better than any mutual fund in existence.
/s