Originally posted on Fire-Kiwi.
In this post we’re going to compare mortgages with, various investment options and solar power for your home, and how you how you could become $256,000 to $867,000 richer by choosing to go solar today.
Lets cut to the chase. If you own a home with a mortgage, you could become $794,000.00 to $867,000.00 richer buy going solar and putting the cost of it on your mortgage.
Or if you have $10,500 and you’re looking to invest we’ll show you how you could become $256,000.00 to $567,490.70 wealthier by choosing solar over term deposits or share market investments.
Assumptions
The assumptions we’ll be working with today.
- Mortgage amount, $400,000 interest rate 5% per year, 30-year term
- Term deposit return after tax 4% per year
- Sharemarket investment returns after tax 7% per year
- Power price inflation 2% per year
- Cost of 4.5kw rooftop solar and power diverter $10,500 delivering:
- Conservative estimated power savings of $85 per month
- Optimistic estimated power savings of $100 per month
- Power savings are used to repay the mortgage early, or invested in the share market
- Annual solar output loss 0.5% per year
- Finance deal on solar system 24 months no interest, no repayments
The simple stuff
This table shows you how much you’ll save of your power bill each year after installing a solar power system, including 2% rise in electricity costs per year, and a 0.5% reduction in power output.
| Year | Annual solar power savings conservative | Annual solar power savings optimistic |
| 1 | $1,035.36 | $1,218.00 |
| 2 | $1,050.84 | $1,236.24 |
| 3 | $1,066.56 | $1,254.84 |
| 4 | $1,082.64 | $1,273.68 |
| 5 | $1,098.84 | $1,292.76 |
| 6 | $1,115.28 | $1,312.08 |
| 7 | $1,132.08 | $1,331.76 |
| 8 | $1,149.00 | $1,351.80 |
| 9 | $1,166.28 | $1,372.08 |
| 10 | $1,183.80 | $1,392.60 |
| 11 | $1,201.56 | $1,413.48 |
| 12 | $1,219.56 | $1,434.72 |
| 13 | $1,237.80 | $1,456.32 |
| 14 | $1,256.40 | $1,478.16 |
| 15 | $1,275.24 | $1,500.24 |
| 16 | $1,294.32 | $1,522.80 |
| 17 | $1,313.76 | $1,545.60 |
| 18 | $1,333.44 | $1,568.76 |
| 19 | $1,353.48 | $1,592.40 |
| 20 | $1,373.76 | $1,616.28 |
| 21 | $1,394.40 | $1,640.52 |
| 22 | $1,415.28 | $1,665.12 |
| 23 | $1,436.52 | $1,690.08 |
| 24 | $1,458.12 | $1,715.40 |
| 25 | $1,479.96 | $1,741.08 |
| 26 | $1,502.16 | $1,767.24 |
| 27 | $1,524.72 | $1,793.76 |
| 28 | $1,547.52 | $1,820.64 |
| 29 | $1,570.80 | $1,848.00 |
| 30 | $1,594.32 | $1,875.72 |
| 31 | $1,618.20 | $1,903.80 |
| 32 | $1,642.56 | $1,932.36 |
| 33 | $1,667.16 | $1,961.40 |
| 34 | $1,692.12 | $1,990.80 |
| 35 | $1,717.56 | $2,020.68 |
| 36 | $1,743.36 | $2,050.92 |
| 37 | $1,769.52 | $2,081.76 |
| 38 | $1,796.04 | $2,112.96 |
| 39 | $1,822.92 | $2,144.64 |
| 40 | $1,850.28 | $2,176.80 |
| 41 | $1,878.00 | $2,209.44 |
| 42 | $1,906.20 | $2,242.56 |
| 43 | $1,934.76 | $2,276.28 |
| 44 | $1,963.80 | $2,310.36 |
| 45 | $1,993.32 | $2,345.04 |
| 46 | $2,023.20 | $2,380.20 |
| 47 | $2,053.56 | $2,415.96 |
| 48 | $2,084.40 | $2,452.20 |
| 49 | $2,115.60 | $2,488.92 |
| 50 | $2,147.40 | $2,526.24 |
Notice how the amount saved increases every year even though the output you panels generate decreases ever so slightly. We use a 50 year lifetime for the solar power system. This represents the half life of the solar panels, were power output will be 50% of the original specification. This aligns with most quality solar panel guarantees of 80% output after 20 years.
Got a mortgage?
So what does this mean as a home owner with a mortgage. If you put the cost of the solar power system on the mortgage, you will pay off your mortgage 5 years earlier.
But it gets even better, after your mortgage is paid off, if you invest your previous mortgage payment for the remaining 5 years (as if you had a 30 year mortgage), and invest the power savings you could become $867,000.00 richer.
| Year | Mortgage | Mortgage plus solar conservative | Mortgage plus solar optimistic |
| 1 | -$394,106.98 | -$393,058.88 | -$392,873.91 |
| 2 | -$387,911.85 | -$395,987.29 | -$395,606.04 |
| 3 | -$381,399.10 | -$388,808.99 | -$388,217.68 |
| 4 | -$374,552.46 | -$380,987.71 | -$380,173.61 |
| 5 | -$367,354.82 | -$372,487.77 | -$371,437.47 |
| 6 | -$359,788.16 | -$363,271.53 | -$361,970.96 |
| 7 | -$351,833.59 | -$353,299.57 | -$351,733.80 |
| 8 | -$343,471.20 | -$342,530.29 | -$340,683.63 |
| 9 | -$334,680.09 | -$330,919.87 | -$328,775.94 |
| 10 | -$325,438.29 | -$318,422.35 | -$315,963.81 |
| 11 | -$315,722.68 | -$304,989.28 | -$302,197.91 |
| 12 | -$305,508.98 | -$290,569.74 | -$287,426.39 |
| 13 | -$294,771.65 | -$275,110.21 | -$271,594.72 |
| 14 | -$283,483.83 | -$258,554.40 | -$254,645.49 |
| 15 | -$271,617.33 | -$240,843.02 | -$236,518.42 |
| 16 | -$259,142.45 | -$221,913.76 | -$217,149.93 |
| 17 | -$246,028.02 | -$201,701.09 | -$196,473.30 |
| 18 | -$232,241.25 | -$180,136.13 | -$174,418.37 |
| 19 | -$217,747.66 | -$157,146.35 | -$150,911.28 |
| 20 | -$202,511.02 | -$132,655.49 | -$125,874.37 |
| 21 | -$186,493.24 | -$106,583.39 | -$99,225.89 |
| 22 | -$169,654.27 | -$78,845.79 | -$70,880.01 |
| 23 | -$151,952.01 | -$49,353.95 | -$40,746.36 |
| 24 | -$133,342.19 | -$18,014.63 | -$8,729.99 |
| 25 | -$113,778.29 | $15,270.24 | $25,269.10 |
| 26 | -$93,211.41 | $44,514.18 | $55,474.42 |
| 27 | -$71,590.11 | $76,087.07 | $88,078.72 |
| 28 | -$48,860.34 | $110,154.80 | $123,252.67 |
| 29 | -$24,965.27 | $146,894.87 | $161,179.02 |
| 30 | $0.00 | $186,497.22 | $202,053.42 |
| 31 | $0.00 | $201,206.17 | $218,143.24 |
| 32 | $0.00 | $216,961.56 | $235,379.04 |
| 33 | $0.00 | $233,836.75 | $253,841.28 |
| 34 | $0.00 | $251,910.40 | $273,616.03 |
| 35 | $0.00 | $271,266.50 | $294,795.44 |
| 36 | $0.00 | $291,994.96 | $317,477.95 |
| 37 | $0.00 | $314,192.09 | $341,769.03 |
| 38 | $0.00 | $337,960.82 | $367,781.52 |
| 39 | $0.00 | $363,411.42 | $395,636.06 |
| 40 | $0.00 | $390,661.74 | $425,461.82 |
| 41 | $0.00 | $419,838.00 | $457,397.05 |
| 42 | $0.00 | $451,075.16 | $491,589.67 |
| 43 | $0.00 | $484,517.72 | $528,197.80 |
| 44 | $0.00 | $520,320.18 | $567,390.78 |
| 45 | $0.00 | $558,647.98 | $609,349.82 |
| 46 | $0.00 | $599,678.03 | $654,268.76 |
| 47 | $0.00 | $643,599.73 | $702,355.07 |
| 48 | $0.00 | $690,615.75 | $753,830.57 |
| 49 | $0.00 | $740,942.81 | $808,932.77 |
| 50 | $0.00 | $794,812.93 | $867,915.78 |
Looking to invest
Do you have $10,500, and are looking to invest. Lets compare term deposits with share market investments and solar power.
| Year | Investing Term Deposit | Investing Shares | Solar conservative | Solar optimistic |
| 1 | $10,920.00 | $11,235.00 | $12,293.28 | $12,480.03 |
| 2 | $11,356.80 | $12,021.45 | $3,728.02 | $4,117.34 |
| 3 | $11,811.07 | $12,862.95 | $5,079.24 | $5,650.58 |
| 4 | $12,283.51 | $13,763.36 | $6,541.37 | $7,309.83 |
| 5 | $12,774.86 | $14,726.79 | $8,122.41 | $9,104.15 |
| 6 | $13,285.85 | $15,757.67 | $9,830.93 | $11,043.37 |
| 7 | $13,817.28 | $16,860.71 | $11,676.10 | $13,137.88 |
| 8 | $14,369.98 | $18,040.95 | $13,667.74 | $15,398.80 |
| 9 | $14,944.77 | $19,303.82 | $15,816.35 | $17,838.15 |
| 10 | $15,542.56 | $20,655.09 | $18,133.29 | $20,468.68 |
| 11 | $16,164.27 | $22,100.95 | $20,630.59 | $23,304.02 |
| 12 | $16,810.84 | $23,648.01 | $23,321.13 | $26,358.86 |
| 13 | $17,483.27 | $25,303.37 | $26,218.68 | $29,648.97 |
| 14 | $18,182.60 | $27,074.61 | $29,337.99 | $33,191.04 |
| 15 | $18,909.91 | $28,969.83 | $32,694.95 | $37,003.09 |
| 16 | $19,666.30 | $30,997.72 | $36,306.44 | $41,104.28 |
| 17 | $20,452.96 | $33,167.56 | $40,190.53 | $45,515.20 |
| 18 | $21,271.07 | $35,489.29 | $44,366.67 | $50,257.93 |
| 19 | $22,121.92 | $37,973.54 | $48,855.57 | $55,356.05 |
| 20 | $23,006.79 | $40,631.69 | $53,679.48 | $60,834.70 |
| 21 | $23,927.06 | $43,475.90 | $58,862.10 | $66,720.88 |
| 22 | $24,884.15 | $46,519.22 | $64,428.93 | $73,043.49 |
| 23 | $25,879.51 | $49,775.56 | $70,407.09 | $79,833.47 |
| 24 | $26,914.69 | $53,259.85 | $76,825.76 | $87,123.89 |
| 25 | $27,991.28 | $56,988.04 | $83,716.15 | $94,950.17 |
| 26 | $29,110.93 | $60,977.21 | $91,111.53 | $103,350.18 |
| 27 | $30,275.37 | $65,245.61 | $99,047.62 | $112,364.46 |
| 28 | $31,486.38 | $69,812.80 | $107,562.63 | $122,036.39 |
| 29 | $32,745.84 | $74,699.70 | $116,697.48 | $132,412.49 |
| 30 | $34,055.67 | $79,928.68 | $126,495.80 | $143,542.44 |
| 31 | $35,417.90 | $85,523.69 | $137,004.41 | $155,479.37 |
| 32 | $36,834.62 | $91,510.34 | $148,273.39 | $168,280.27 |
| 33 | $38,308.00 | $97,916.07 | $160,356.35 | $182,005.99 |
| 34 | $39,840.32 | $104,770.19 | $173,310.64 | $196,721.65 |
| 35 | $41,433.93 | $112,104.11 | $187,197.63 | $212,497.04 |
| 36 | $43,091.29 | $119,951.39 | $202,082.97 | $229,406.83 |
| 37 | $44,814.94 | $128,347.99 | $218,037.06 | $247,530.81 |
| 38 | $46,607.54 | $137,332.35 | $235,135.08 | $266,954.48 |
| 39 | $48,471.84 | $146,945.61 | $253,457.47 | $287,769.29 |
| 40 | $50,410.72 | $157,231.81 | $273,090.32 | $310,073.02 |
| 41 | $52,427.15 | $168,238.03 | $294,125.86 | $333,970.38 |
| 42 | $54,524.23 | $180,014.70 | $316,662.64 | $359,573.43 |
| 43 | $56,705.20 | $192,615.72 | $340,806.26 | $387,002.05 |
| 44 | $58,973.41 | $206,098.83 | $366,669.56 | $416,384.54 |
| 45 | $61,332.34 | $220,525.74 | $394,373.42 | $447,858.17 |
| 46 | $63,785.64 | $235,962.55 | $424,047.06 | $481,569.82 |
| 47 | $66,337.06 | $252,479.92 | $455,828.85 | $517,676.76 |
| 48 | $68,990.55 | $270,153.52 | $489,866.87 | $556,347.17 |
| 49 | $71,750.17 | $289,064.26 | $526,319.54 | $597,760.99 |
| 50 | $74,620.18 | $309,298.76 | $565,356.28 | $642,110.88 |
Here we see a solar power vs term deposits creating up to $567,490.70 extra wealth. And solar power vs investing in shares creating $256,057.52 to $332,812.12 extra wealth.
Summary
Do your own maths, make your own assumptions, get independent investment advice and call around various solar power installers. It could be the best financial decision you’ll ever make.
