Solar Energy: My Financial Logic is at War With My Conscience

Tesla Solar Panels

Over the past few years, solar energy has interested me to the point where I asked that our house be built to enhance the support for future solar panels on the roof. My personal financial investments have also revolved around renewable energy. And so I've recently looked into having solar panels installed on our home. In my opinion, it's not yet inexpensive from a financial standpoint. 

But from the perspective of climate change and the health of our environment, it's probably invaluable at this point. 

Here's the high level overview and some of my thoughts: 

• One of the first things that people interested in solar look into is the Investment Tax Credit (ITC). Despite the fact that solar hasn't been so widely adopted yet, the credit seems to be already phasing out. The credit comes as a tax benefit and is computed based on the initial cost of the system. You get the full credit in year one. As you can see, residential customers have less than 3 years to get any kind of credit for adopting solar. I hope that there is a renewal of the incentives. 
• 2016 – 2019: The tax credit remains at 30 percent of the cost of the system.
• 2020: Owners of new residential and commercial solar can deduct 26 percent of the cost of the system from their taxes.
• 2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
• 2022 onwards: Owners of new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
  
  
• Solar panels have a life of somewhere between 20-25 years. But they have practically no maintenance, other than maybe having to spray them down with water to remove any bird droppings. 
  
  
• The ability to capture enough sunlight depends on the orientation of your house, how much sun you receive, whether or not you have trees or adjacent buildings creating shade, the slope of your roof, and the surface area of roof you have to add panels to. 
  
  
  
  

  

  Southward facing home with 46 solar panels
  

   

  

  Heat map - yellow = most exposure = most efficient; dark orange = least exposure = lease efficient
  

  
  
  
  
• Some solar companies can only build you a system that does not exceed 10% of your power utilization. They use the previous year's energy bill and consumption in kilowatt hours as a guide. 
• I take issue with this because the older your home gets, the less efficient it is. Additionally, if you had problems with energy consumption in the past year, your data may not be as accurate. A system built today may not be appropriate for your usage in 5 / 10 / 15 years. 
  
  
• Unless you live on a farm or out in the middle of no where, you have to remain connected to the energy grid. A battery is really only good for storing energy in case the power goes out. I learned that if there is a power outage, because you are still connected to the utility and the solar power feeds the utility lines automatically, if there is a power outage, the solar system shuts down automatically. So there's not really an option to be living a battery-powered life. In any event, a single battery costs about $9-15k. So tack that on to the cost of your system. And likely, you will need more than 1 battery if your home exceeds a certain size. 
  
  
• The cost of the system itself depends on the amount of energy you will need to create and the amount of space that you have to lay out solar panels to create and store that energy. In general, the bigger the house, the more energy consumed, the more panel you will need. 

In our case, we averaged somewhere in the range of 1500-2000 kilowatt hours of consumption over the past year which ranged in cost from $175 to $225 per month. The solar panels necessary to run our home at this rate would cost us about $36,000 for the panels alone, and that's paying it up front (not a loan) and getting the 26% federal tax credit (which comes when you file your tax return). So the cost of cash out the door on day one is really +/- $48,000 and then you have to wait to get your credit when you file your tax return. If I added a single battery, the cost would be an additional $12,000; two batteries would cost $19,000 (both before tax credit). 

There are other options that the solar companies offer. The one that draws the most attention is the $0 due at signing / no cost today. Essentially what happens is you can finance the cost of your system over 10 or 20 years. The interest they charge is 2.99% for 10 or 4.99% for 20 years. And you, instead, have a monthly payment to make to the solar company rather than the utility. So you end up paying more, obviously. The $36,000 system will cost roughly $44,000 by the time you're done paying it off.

My first issue with this is if I wanted to finance the cost of my solar panels, the better option would be to take out a home equity loan or borrow against my home. With interest rates so low these days, I'd get a better deal that way. 

My second issue with financing is if you choose the longer option at 20 years to avail of a lower monthly payment, by the time you're done paying for the system you've reached nearly the end of the life of the panels. By that time, you'll have to replace panels or worse yet replace the entire system. Have you really saved any money then? Or are you just breaking even? 

Also note: solar panels are not a home improvement. They are considered tangible personal property and not a fixture of the house. That being said, they do not improve the value (financially) of your home. In fact, if you wanted to take the solar panels with you to your next home, in theory, you could. But solar companies still advertise that having a solar system will increase the value of your home. I suppose it could, if the buyer of your home was willing to purchase the panels from you, but they could easily say they love the house but not the panels and have you remove them before you sell. In which case, you've got to shell out the money to have them taken down, and then there's no guarantee that they'll fit on the new home you're moving into. 

My problem now is one that's moral and ecological. While I know that becoming self-sufficient from an energy perspective will help the environment and that installing these panels would be doing our part in "saving" the world, my financial logic is at war with my conscience. I cannot justify the cost mathematically. The cost vs. (financial) benefit is about even. But the (financial) cost vs. (climate change) benefit is heavily in favor of adopting a solar energy system. 

Have any of you gone down this decision path? If so, please feel free to share your insights. And if I've gotten anything wrong up there, please help me understand so that I can correct my thinking. Many thanks! 

The Art of Happiness by Dalai Lama XIV and Howard C. Cutler

I wish this book was actually written by the Dalai Lama. In fact, it was written by Howard Cutler based on his interviews with the Dalai Lama. So in a way, it's a little bit misleading.

I suppose that not enough people get any kind of interaction with the Dalai Lama, so we should be "happy" with what we get. Cutler seems to have done the best job he could with the limited time with His Holiness. But to me it just wasn't satisfying. 

In picking up this book, I had hoped to read so much more by the Dalai Lama. I was hoping to be more inspired. I was hoping to have deeper appreciation and understanding. And it's not that I didn't get any of this, it's that I was being greedy in thinking that I'd get more. 

The Dalai Lama's teachings are on the surface pretty basic. But it's in the application of "the art" that is deep and difficult. So many of the simple things he says and that Cutler makes note of could be discussed for hours, days, months, years! And one's personal achievement in happiness could take equally as long. 

I did pull some good things from this book as you've seen in my previous posts. And I respect even just the attempt to put into words what a lifelong journey towards enlightenment has to offer. 

I think what I've taken most from this read is that happiness comes most from the simplicity in life. To achieve happiness, start with what you can control and remove from your life the stress and fear that comes from what you cannot control. 

Check it out on GoodReads. 

Buy it on Amazon.

 

Tao Te Ching: A New English Version by Lao Tzu

It's hard to refute any of the ideas that Lao Tzu, regarded as the found of Taoism, has to offer. Every page is quotable. Every saying has balance. His teachings emphasize the art of doing without doing. If Lao Tzu's teachings were scientific, they'd be the equivalent of Newton's 3rd Law - for every action there is an equal and opposite reaction. 

Regardless of what faith you have or religion you follow, this book and the teachings contained herein can be applied to our everyday lives. All it takes is some introspection, observation, and dedication to balance.

A version, not a translation, by Stephen Mitchell. That's an important distinction.

Check it out on GoodReads.

Buy it on Amazon.

Here's an excerpt that I enjoyed: 

Support For The Cuban People, Support for All People

In July of 2019, we traveled to Cuba. During that year, numerous restrictions to travel were implemented for US citizens by the Administration. But we still found a way to get there.

With a couple of close friends, we were travelers under the “Support for the Cuban People” category of limited visitors to the island nation. We checked in at IAH and paid $150 for our “visa” and proceeded to fly first class (upgraded due to status) to Havana.

After a short flight in fantastic tropical weather, we landed at Jose Marti International Airport in Havana. After a ridiculously long wait at baggage claim, we found a collectivo or shared taxi for the 4 of us and saved Havana to be our last stop instead of our first. Typical of our style of travel, we were bound for the smaller cities and towns off the beaten path. This time, we'd call Cienfuegos and Trinidad our homes for most of this adventure.

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Support for the Cuban People 🌴 . . . #havanacuba #visitcuba #classiccars #travelwithus #doubledate #lahabana #palmtrees #sunnydays #boyfriendgirlfriend #husbandandwife #travelgoal #pinkeverything #cubanfood #ropaveja #riceandbeans #mamey #icecream #whatsfordessert #youtubechannel #tanning #humid #habana #travellifestyle #july #hotsummerdays #mujeres #learnspanish #cubancigars #convertible #travelwithus

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Our 10 days on this island nation were like stepping back in time. We enjoyed the reprieve from the hustle and bustle of 21st century American life. Being disconnected from the internet, using tangible currency to complete transactions, negotiating for better prices for services provided by locals, speaking a foreign language to get by, and navigating the old roads in classic cars were a joy to be had throughout the trip.

Along the way, we met so many great people, but at the same time, we did feel some prying eyes. In the smaller towns this tends to happen. It's not a surprise. But there was never any real animosity felt. It was just the feeling of eyeballs following you in motion.

One of the best connections we made was with our Airbnb / Casa Particular hosts - in Cienfuegos, Magda and her husband, and in Trinidad, Daineris and her son, Fabian.

Although Magda or her husband spoke no English, I used my 6 years of Spanish to get us through (with a little help of Google Translate). And despite Daineris being able to speak fluent English, she challenged me daily to speak Spanish! What a great experience to be immersed in language. Both hosts gave us insights to their locales, from where to eat, where to shop, where to swim, and even where to dance! They helped us organize collectivos to travel between destinations, provided us with ample desayunos or breakfast to start out our days, and in Daineris' case,  corrected my Spanish when it wasn't perfect.

This is not to say that we didn't encounter other equally wonderful people. We just didn't spend as much time with them. I have to say that all of our collectivo drivers were so engaging. They were all curious about us, foreigners. On our short rides, they inquired about why were in their country, what did we like to eat, how did we learn to speak Spanish. On the longer rides between towns and cities, in very basic Spanish, we talked about our childhood, our families, the weather, other tourists. I asked about fruits and vegetables well-known in Cuba. They asked if we had ever heard of certain things. I asked how to say certain words by providing descriptions of what I imagined. It was like playing Pictionary verbally! Our conversations were endless.

One of the little things that I really enjoyed was the old school way of communication. Because of the lack of very good internet, people still make house-calls. It's not uncommon to see a man calling from the street up to the 2nd floor balcony until his friend or family member or love interest comes to answer. I also really enjoyed sampling from street carts of food selling anything from fruits and vegetables to pan con jamon to tostones o maduros to churros to chicharrones.

On a different note, I think one of the harder things to grasp was the actual poverty that we sometimes witnessed, but more so learned about. To some extent it's not outwardly visible because the people are usually so positive or laid back or energetic. Like other communist countries in the 3rd world, Cuba rations food. We'd been to other Communist countries but never saw this life first-hand. Our Airbnb hosts shared their rationing booklets with us. They educated us about how much of each staple food they were entitled to. They shared their opinions about their lifestyles.

The strangest part about the whole setup is that having an Airbnb is very much a capitalist idea. Anywhere else in the world, individual owners are the beneficiaries of renting out their extra space to make more money. In Cuba, however, the casa particular owners are undercut by the government; they must pay the government to setup their hosting situation. Maybe it's like a tax, but I don't think it is. I suppose the hosts still make some money and are a little bit better off, but my feeling was that they were still suffering in not reaping the full benefit of being an owner like everyone else in the world.

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bebe dos mojitos y toma clases de SALSA 💃🏼💃🏼 . . . #salsadancing #salsacubana #123 #567 #danceclass #whenincuba #practicingoursalsabeforedinner #romanticcouples #lookintomyeyes #lovemenow #dancelikenooneswatching #trinidadcuba #visitcuba #colorfulhome #cubanstreets #nowifi #backintheday #noiphone #dinnermusic #danceandtravel #worldtravelscapes #traveltheworldwithme #coupleshoot #danceintothelight #mojitos #cubalibre #livinglavidaloca #lifeistooshort #behappy #learnspanish

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Despite this, the Cuban people remain so positive. They are so hospitable, looking to help in any way possible. Each person we met was so open and happy to see us, and we were happy to support them.

Most people say that the beaches are the most beautiful part of the island. But I think that the island wouldn't be as beautiful if not for the quality of people that inhabit it. It made the experience that much more wonderful.

Be unassuming when traveling to Cuba, you will appreciate what the country has to offer. I suppose this is the advice I’d give for travel to any country, city, or village but In our recent travels no places has made me think this more than Cuba (and now Saudi Arabia too).

What we know about Cuba through the media is simply the negative. No surprise. When politics dominate the news, and the country opposes another’s actions, you will never see or hear about the beauty of the place or the people. You lose out on the creativity of culture, the splendor of scenery, and the camaraderie of humanity.

Before we left for Cuba the restrictions on travel to the island nation became increasingly difficult to overcome due to the current political administration. But what for really? Because some people want to impose their will on another people not seeing eye to eye with you? I get it, but I don’t. Trying to keep our nation safe at the peril of others through modern day non-violent warfare / bullying is not brave nor honorable.

In the beginning, Support for the Cuban People was our reason for travel. But at the end, supporting the Cuban people became more than just a reason to travel. We learned that it's a way of life on the island - Cubans supporting Cubans, travelers supporting Cubans, travelers supporting travelers, travelers supporting people, people supporting each other. Isn't that the way it should be no matter where in the world we are? 

My Investment Compass

Yesterday I spent most of my day tinkering with Excel and putting together tables. My analysis was for some investments I plan to make in the near future. It was a reminder of how analytical I can get sometimes. I started out with ABC up and down the X axis, and XYZ on the Y axis and populated the cells with various formulas. Then I would rearrange the line items or add / delete lines all to get the right amount of detail.

In the world of corporate tax (my profession), it's rare that we have to put together a table from scratch. Most of the time, the data is already provided to us and it requires manipulation. Often times it's as easy as performing a VLOOKUP or HLOOKUP or simply using a Pivot Table. But there's just so much information to analyze. The trick is to know what you need for a narrow down the dataset to those categories.

The data I came up with yesterday was based on reading and research I did about various investment products which I plan to place bets on. For me, my interests are currently in:

• Blockchain technology
• Cryptocurrency
• eSports
• Environment
• Renewable Resources / Alternative Energy

The potential for each of the above is sky high. I think we're going to see Blockchain become the accounting of the future. Plenty of businesses are currently analyzing how to implement and make use of the technology. From the success and safety of the Blockchain, cryptocurrency was developed potentially to make financial exchanges easier, non-centrally governed, and safer than transactions with intermediaries. It is yet another factor that will shrink the world and create a common denominator to create business across borders. Imagine being able to pay for your meal in a foreign country safely without having to exchange currency or use a credit card and be subject to foreign transaction fees with just the click of a button on your mobile phone. It's potentially that easy. 

Then there's eSports, and if you've read my previous posts you already know what I think. It's sports digitized and the market is only growing. I can only see an upside financially. The downside is going to be getting your kids outside for fresh air to play like the old days of activity and exercise. I'm sure the world will find some health detriments, and we should be sure to combat them and set limits. But the trend is upward for eSports. And like anything that requires moderation, it will be a matter of parental guidance and reasonableness that helps mitigate any health concerns. 

The environment and renewable energy also go hand in hand similar to Blockchain and Cryptocurrency. It's easy, the bet is that renewable and alternative energy sources will improve the environment that we live. And those who create a greener lifestyle should and will benefit in more ways than just financial - health-wise too. Solar energy is really making a statement these days. The tech has been around for years but Tesla and other solar manufacturers are really making it easier and cheaper to be environmentally friendly. Wind is also rising but less publicly. The new turbines on and offshore will have been providing electricity for a while now but drawing much less attention. Similarly, hydroelectric energy has also been around for a while but with few water sources to plug up with dams, it too doesn't get the recognition it deserves for as long as it has already served us. And the remaining alternatives include biomass, geothermal, and tidal have yet to really make a profound impact but again, the potential is great. 

I suppose over these past few months of unemployment, the experiences I've lived through, the reading I've done and the interests I've developed have helped me realize what my future holds. I know better who I want to be and how I want to carry out that lifestyle. For now, the next investments I will make are just a stepping stone for the future I want to build. And like the past few months, I'm sure these investments will be rocky at time but the long term results should be upward trending. (700)