Over the past months, the stock market has been particularly volatile, swinging between massive losses and sweeping gains. Home solar installation might give you less vertigo - but how does investment in solar compare to stock market returns?
This study from 2015 found that in the Northeast, “paying cash upfront for a solar PV system is a better investment than the [S&P 500] over the 25-year life of a typical PV system.”
Of course, shifting legislation, changing incentive programs, and the unpredictable nature of the stock market make it impossible to know whether investing in solar PV is a better choice than the stock market. (Even if Massachusetts solar PV owners are predicted to realize an incredible 28.5% annual effective return!) That said, there are reasons beyond pure cash flow to invest in solar instead of (or in addition to) stocks.
Solar - Low risk
Unlike the stock market’s volatility, your investment in a solar PV system is stable. With the new SMART program, your incentives are at a fixed rate, so there’s no guessing what your benefits will be. As we’ve seen over the past few months, the stock market (including solar stocks!) can wildly fluctuate. If you prioritize safety versus risk, you might prefer the peace of mind that comes with buying a solar array for your home versus the uncertainty of investing in the stock market.
Tax efficiency with solar tax credits
The only time investors realize tax benefits from stocks is when they lose money. When you purchase solar for your home, however, you receive generous solar tax benefits at the state and federal level within the first year of ownership.
Earn even more $ with solar and investing
If you invest your monthly solar savings into the S&P 500, you stand to reap additional market returns on your savings!
Doing good for the economy and the environment
Lest we get too focused on financials, it’s helpful to remember that by installing solar panels, you’re preserving the planet. In addition, you’re stimulating innovation and market competition, which is great for the economy (and the stock market!).
Want to see what your savings could look like so you can measure how they stack up? Contact us today for a free solar snapshot of your property.