Rooftop Solar Energy: The Mathematician States His Case

This week kicks off a four-part series on my family’s decision to install a rooftop solar energy system on our personal residence. I gleefully call this series The One With The Solar Panels.

In the today’s article, I discuss how we started on this journey and the factors we considered in moving forward to get quotes. The second article dishes on the two sales pitches and explains how solar systems actually move the energy in and out of your home. Article three, I get gritty with the money math and our decision-making process. The last article will cover the installation and the impact to our energy costs in the 10 months since the panels were installed.

The Mathematician Surprises Me

“We should get solar panels.”

The Mathematician utters this unexpected sentence one day in our kitchen, circa 2017. My brain immediately goes to Wayne Szalinski’s van from Honey, I Blew Up the Kid.

Now, I am the tree hugger in this marital relationship. I avoid plastic, I reduce, reuse and recycle like it is my religion, I mix my own makeup powder with sunscreen because I don’t trust the manufacturers, and I am on a continuous mission to eliminate as many chemicals and pesticides from our home as possible. (Yes, I am aware that I just outed myself as living on the fringes of Crazy Town. I trust your addiction to my straight talk and ridiculous life commentary will override this fact.)

Even with all that, I was not prepared for this subject.

“Aren’t those, like, really expensive? And we have crappy weather in Michigan.”

“They aren’t as expensive as they used to be, and Michigan is the 15th best state for solar power.”

Research and A Change of Latitude

Thus began our journey toward solar energy. As it turned out, our last home’s conditions were not ideal for solar panels. The roof was slanted east/west, and we had a lot of tree coverage. The trees were great for keeping the house shaded and cool, but not so great for harvesting the sun’s powerful rays.

The Mathematician didn’t give up. He continued to read articles, crunch numbers and learn as much as he could. The Mathematician isn’t so interested in the day-to-day environmental impact of our household consumption (he just follows my lead), but he is razor-focused on moving us toward a more sustainable and cost-effective energy source.

As he gets into his research, he realizes we need the solar panels AND a battery. This setup would allow us to maximize the system’s cost savings and also be able to use the energy when the power grid goes down. And, of course, this is going to significantly push the price point upwards.

Fast forward to the train wreck commonly referred to as 2020. We have moved into a new home, and lo and behold, the roof slants north/south and gets killer sun most of the day. The south-facing roof is next to a street, and there are no trees or houses to block those golden rays until late in the day.

Tenacity Pays Off

The Mathematician starts beating The Solar Drum again. Now, in our marriage, The Mathematician asks for very little. His low-key personality is in contrast to my more high-maintenance, Type-A personality. So, when The Mathematician asks for something big, it is rare that I fight it. I know how lucky I am to have him in my life, so I try to roll with whatever it is he is looking to do.

Now, in addition to doing everything short of chaining myself to heritage trees, I am the money manager in our family. (We paid off those massive law school loans by being crazy strict with our household budget.) I also used to manage a department with a multi-million dollar budget, so I consider myself pretty level-headed when it comes to assessing return on investment (ROI), spending money in the right places and asking a lot of questions before I do so.

Time Pressure is Applied

Now, the federal government allows you to claim a federal income tax credit for rooftop solar energy systems installed between 2017 – 2023. In 2021 and 2022, the tax credit is for up to 26% of the system cost. In 2023, that credit amount will drop to 22%.

If you were a boss and installed your system between 2017 and 2019, you got to claim a 30% tax credit. The credit will disappear completely in 2024, unless Congress takes action to renew it.

If you remember from my Uncle Sam article, a tax credit is a dollar for dollar reduction of your tax bill. So if you pay $10,000 and have a 26% credit, you will shave $2,600 off your tax bill that year.

Bonus: The credit carries forward, if needed. If your tax bill is smaller than the credit, you can take it off the following year’s tax bill. Unfortunately, this credit doesn’t allow you to get money back from the IRS (it’s a fun thought though, right?).

Mental Math

Now that I know about this credit and its future riding off into the sunset, I’m interested. I looked at it as though we were getting a 26% rebate off the system. I like rebates, as most people do; I also like to work the tax code to the fullest extent of its advantages. (Thank you, Professor Kirsch. Fed Tax was my jam! Yes, my inner nerd is showing.)

So say this quote comes back at $30,000. At tax time, we could claim a credit for $7,800 off our taxes paid in 2021. Effectively the system now costs $22,200, or 74% of the sticker original price. (My time working at Fashion Bug doing the sale discounts in my head is really paying dividends here!)

I’m now willing to entertain spending the money on a system if the ROI is sufficient and it makes sense for our family and our home. Plus, The Mathematician is not giving up.

The World We Leave Behind

With every year that passes, we also grow more concerned with the world we are leaving to our daughter. Fossil fuel supplies are finite; they won’t last forever. If this makes financial sense, then adding a clean energy source to our home really lends itself to our wish to help take care of the world we are leaving to our children.

Thanks for tuning in to kick off my series about rooftop solar energy! Join me next week for the second article in The One With The Solar Panels series. I will be spilling the tea on the two sales pitches and how solar systems actual move the energy in and out of your home.

In the meantime, I am happy to answer your homeowner questions. Solar or other, I’m here to help!

Photo by Vivint Solar on Unsplash