What MKBHD Didn’t Say About Solar
MKBHD, aka Marques Brownlee, recently posted a 1 year anniversary video about his Tesla Solar Roof and Powerwall experience. A pretty decent video. There were a lot of numbers to convince you, the viewer, and himself, that it was worth the 9 year pay back period.
Back in 2018, we installed a 10.4 kW Tesla solar panel system (not solar roof) with three Powerwalls for roughly $55K before tax incentives. Over the years I’ve come to think of the “cost” of a home energy system quite differently. Maybe I can convince you too.
If you do decide to order a system for your home, and don’t have a referral link from a friend, feel free to use mine: http://ts.la/william5655.
Cash or Loan
When we purchased our system, we chose to use Tesla Financing. There were a few reasons.
#1: Lower upfront cost than cash. Just 10% down to get started. IIRC, we got a 10 year loan.
#2: Since solar offsets your utility bill, you will partially pay the monthly loan with the savings from your normal electricity bill. Great during summers, not so great during winters.
#3: At next year’s tax day, you will get a tax credit of 30%. If you’ve already paid the taxes, this is free money back. The tax credit applies to Powerwalls as well, so think of it as Buy 2 Get 1 Free!
#4: No prepayment penalty. We paid off our loan in 2020 to reduce our monthly expenses going into retirement.
Basically, a loan makes it easy to get started on a home energy system as they are not cheap. Sure, the total monthly utility bill + loan payments will be higher than the original utility bill. However, I will suggest two other reasons why the extra monthly cost might be worthwhile.
Value Received
As they say, when you purchase something, it’s not about the cost but the value. We waited until the Powerwalls were available in 2018 before ordering the entire system. Why? The Powerwalls make all the difference as a whole house backup system.
The power usually goes out when there is some extreme weather event. Maybe a hot summer day caused a brown or black out. A rain/thunder/wind/snow storm knocked down trees over power lines. With traditional backup systems, those are the worst times to fetch a gas generator from the shed only to find it not working or out of fuel.
I put a very high value on convenience. In the end, the purpose of money is to reduce headaches. We live in a 4 bdrm house with a garage and two teenage internet connected kids.
In the event of a power outage, what value do you put on:
- Having heat in the winter, A/C in the summer?
- Being able to use the bathroom at night and take a shower with the lights on?
- Having garage doors that work? Baby monitors? Medical devices?
- Not worrying about food spoiling in the refrigerator/freezer?
- Having functioning WiFi at home for the spouse and kids? i.e. multiply the perceived value by the # of people in the house!
- Being able to WFH? Oh wait, that might be a negative. 🤣🤣🤣
How much is it worth to you for a one hour outage? Now try 15 hours. That actually happened to us in January 2021. Our town lost power in the middle of the night during a winter snow storm. We woke up to a warm house and had a normal day. Not so sure for our neighbors.
During these power outages, the Powerwall based Tesla systems really shine over traditional solar only systems. Case closed.
Home Improvement
A lot of homeowners will spend tens or hundreds of thousands of dollars on a new kitchen, bathroom, addition, patio, or deck. Why? First of all, they get to enjoy it during home ownership, and second, it should increase the value of the home when it’s time to sell.
Makes perfect sense to me. Guess what happens when you install a home energy system like Tesla Solar with Powerwalls? While we haven’t listed our house for sale, I would expect to, at a minimum, break even from the cost of purchase and installation.
Given two similar houses in the same town, same schools. Which would attract more buyers? The one with a built in home solar, powerwalls, and EV charger, or the one without?
Although I can’t prove it yet, I think this is the ultimate kicker. We will likely recoup the ENTIRE cost of the system when we sell our house. If this is true, the system is actually FREE. We get to enjoy all the benefits of the system and get the money back when we sell the house.
Sure, you can crunch a spreadsheet to figure out a payback period and overthink from analysis paralysis. Or instead, consider it as a home improvement project that will add equal value to your home, effectively enjoying the benefits for free.
Bonus Reason #1
If you live in California, Texas, and Massachusetts (and maybe other states too), you can participate in Tesla’s Virtual Power Plant program, where during power peak demands, the power company pays YOU for the power generated and stored by your house.
This can offset the loan payments for the system!
Bonus Reason #2
Strange things happen when people purchase Tesla products. They sometimes become TSLA shareholders. That might be an interesting bonus for you too if you decide to go down that path, and could end up paying for a lot more than just solar panels and powerwalls. 😉
So, if you are sitting on the fence about getting solar for your house, hopefully our experiences gives you a new perspective, and maybe provide just the slight nudge needed to make that decision.
Here’s my referral link again in case you need it!