This past summer, my soon-to-be wife and I purchased our first home in Washington, DC’s H Street Northeast neighborhood a few blocks from Union Station. After years of renting, we finally had the opportunity to create the energy-efficient and solar-powered home we always wanted.
Both my fiancée, Amy, and I work on energy and environmental issues – we spend our days encouraging others to become more energy efficient and to reduce their carbon emissions. So, naturally, when we had the opportunity to do something to reduce our own energy consumption and carbon emissions, it was an easy decision to make. What was more difficult was how to go about implementing our vision.
We knew we wanted to install solar panels on our roof, but the idea of shelling out a few thousand dollars after we had just emptied our bank accounts for a down payment was not overly appealing. Thankfully, there are companies that offer an alternative: solar leases. In this model, the solar company pays for the panels, insures them, and installs them, and all I have to do is pay a flat rate per kilowatt-hour (kWh) generated. The National Renewable Energy Laboratory estimates that the solar lease model costs homeowners slightly more than buying the panels outright over the life of the panels. However, the convenience of having someone else maintain the panels, combined with the lack of an up-front capital expenditure, was worth the small premium.
From the minute we turned on the panels, we began saving money. According to the terms of the lease we signed with our solar company, we are paying 45% less for each kWh generated by our panels than we would have paid to get the same amount of electricity from our utility. With average monthly electricity consumption of approximately 300 kWh, and expected solar generation of approximately 200 kWh per month, on average, we are expecting to save about $160 a year. Considering that Amy and I were willing to pay a premium to reduce our carbon footprint, if needed, this is a windfall. If you factor in the U.S. Environmental Protection Agency’s social cost of carbon of $39 per metric ton (at a 3% discount rate), that’s an additional $1,300 per year that we’re saving by installing solar panels.
Saving almost $1,500 per year AND doing the right thing for the environment? That’s an easy decision.