Return on solar panels is an awful investment
I read with interest the Dec. 15 article “Could solar panel mandate see light?” What really stuck out is the claim by the California Energy Commission that mandating solar panels in all new home construction would add $9,500 in cost per home but save the state’s homeowners an average of $19,000 over 30 years. If you take this optimistic projection at face value, it sounds good — until you run the numbers.
If you instead invest that $9,500 in a 30-year government bond with a compounded annual rate of 3 percent, you will see a $23,000 return. If you decide to invest in a conservative mutual fund and receive a 5 percent compounded annual rate of return, you’ll end up with $41,000. And if you invest in a Standard & Poor index fund and receive the historical average of 10 percent, you will end up with more than $165,000.
Solar energy may indeed have a future. But the government should not be granting an inordinate amount of wealth to a small, politically connected group at significant expense to everyone else. That choice should be ours.
