Solar panels can be an excellent investment for the recent retiree. In fact, some of our most passionate customers are newly-retired - oftentimes, they worry about their electricity bill and want to move to empower themselves, own their own electricity, and become less dependent on the utility for the rest of their lives.
We often compare solar to owning a home vs renting a home. While you may incur more charges in the short-term for purchasing a solar energy system, in the long-term, you will fix your costs for electricity and, when the system is paid off, pay nothing at all for the solar energy you produce! Additionally, solar energy is a great way to leave an environmental legacy, reducing your household’s greenhouse gas emissions significantly (for the next homeowner as well).
Right now, let’s explore the reasons for older Americans to go (or not to go) solar.
Older American Demographics
For the rest of this article, let’s assume that you ARE an older American, age 55 and above, who’s interested in understanding whether solar power is an option for you. First, let’s look at some statistics.
People age 55 or above make up 28% of the American population. Of this, around 80% own their own homes. Older people seem to be sticking around for a long time now, and these people often want to stay in their homes for the rest of their lives.
The average electricity bill these people pay is approximately $1,500 per year. This percentage is likely to rise by 3.5% every year – the average annual increase in electricity prices in the USA. If this stays true for the next 25 years or so, then a person who’s 60 years old now will spend over $58,000 on electricity in the next 25 years.
To summarize, many Americans plan on staying in their homes but are subject to utility price increases that may mean a significant portion of their budget in retirement will be going towards electricity.
How much solar power does an older American need on average?
At an assumed average cost of $.13 per kWh, an average senior citizen will consume around 9,850 kWh per year, which costs $1,500. In order to generate enough electricity from solar power, one would need a 7-kW solar array, which would be around $25,000 approximately before the 30% federal tax credit (which expires in 2019). As long as you pay some tax liability, the net cost will go down to around $17,000.
A 7 kW system means about 20 premium solar panels. Each will produce up to 350 watts under full sun. These panels will take up around 430 square feet of south-facing roof space. If you have the cash and space, this amount will offset almost all of your electricity usage for 25 to 30 years. You can also finance the system - traditionally, financing costs just a bit more than what you are currently paying to your utility. The real return in financing comes as utility prices rise above the level of your fixed financing payment, and when the system is paid off. This breakdown is just a general overview. To understand how many solar panels your home needs, you can connect with our expert solar installers to get customized saving estimates, or you can use our residential solar calculator.
Is solar really a good deal for older homeowners?
That 7-kW array may seem a bit high in terms of costs, but since you'd be paying for it all at once, or financing it with a $0 down, it can be a great deal and save you a lot of hassle in the future.
Should older Americans go solar?
As with any investment, it depends on the household. If you worry about the rising costs of electricity and can either afford to purchase a solar system or finance one, then solar can be an amazing way to cut costs and invest in the future. You’ll own your own electricity, and because the panels last for 30-50 years (and are under warranty for 25-30 years), you’ll likely never have to worry about utility prices again.
Going solar has many benefits: long-term savings, energy independence, and a powerful 30% tax credit that expires soon If you’re interested in getting a quote, please get in touch with one of Yellowlite’s consultants!