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dogma
XYZ
Premium
join:2002-08-15
Boulder City, NV
kudos:1
reply to fifty nine

Re: I've gone and done it ... solar install


10 year energy inflation chart

20 year energy inflation chart
said by fifty nine:

We have good reason to believe that energy prices will go up as they say.

Cheap energy is no more. Time to generate your own, get used to conserving or be prepared to shell out more.

You are clearly correct as evidenced in the graphs above (I understand your passion, but no need to be abrasive about it).

Anyway, it's been about [eyeball estimate] 3.4% Year-over-Year for the past 10 years. I am still working up my NPV forecast but I would now like to mention in all fairness, Solar has a low ROI when viewed as a straight investment against something similar in risk like a CD (but a better ROI non the less) primarily because the principal [the Solar panels infrastructure] depreciates to zero over time in a strict financial sense. Whereas the principal [cash] of a CD as a lesser depreciation value.

However, when viewed as a "specialized" hedge investment against inflation, the returns "should be" very good --assuming-- energy rates continue to rise based on historical trends. This is because the Solar owner has effectively fixed, or locked in his/her rates.

I will post my model based on this shortly.

itguy05

join:2005-06-17
Carlisle, PA

said by dogma:

I am still working up my NPV forecast but I would now like to mention in all fairness, Solar has a low ROI when viewed as a straight investment against something similar in risk like a CD (but a better ROI non the less) primarily because the principal [the Solar panels infrastructure] depreciates to zero over time in a strict financial sense. Whereas the principal [cash] of a CD as a lesser depreciation

The depreciation scam should be ignored. Since depreciation has no relation to the actual life of an asset it is a scam, plain and simple. Your "fully depreciated" solar (or any other asset) won't magically stop working once their depreciation is $0. They also won't have a value of $0 at the end of the depreciation period. Conversely it's possible that your asset will have to be declared a total loss well before its depreciated value.

It's also a scam for the law too. You loose something to theft, fire, vandalism, etc and you get "depreciated value". Good luck finding something at that price in the same condition.

So, yes depreciation should be left out.