That’s because when they were evaluating solar panel systems for their home, they decided to install a slightly larger system than they originally planned on so that they would be able to power both their home and their new BMW electric car.
The increase in the price of this system over the initial one will be paid back in just two years through the savings they’re banking by eliminating their need for gasoline and the additional solar renewable energy credit (SRECs) revenues it will generate. Because their system will last at least another 20 years after that (some last as long as 30 years), the future savings will go right into their pockets for a long time to come. Here’s how their decision played out…
Saving on their electric bill with solar in Massachusetts
Initially, The Aggarwals just wanted to install solar on their home so that they could save on their electric bills and have a positive impact on the environment. They started by working with EnergySage to evaluate the financial outcomes of various residential solar panel system options. It quickly became clear that they would save a considerable amount of money by switching to solar.
Additionally, because they live in Massachusetts, they would also be able to generate significant revenue by selling the SRECs (Solar Renewable Energy Credits) they would earn for the solar electricity they generate. After running all the different scenarios, the Aggarwals discovered that their investment in solar power could generate an impressive 20%+ annual return on their investment. Based on this number alone, they were ready to move forward.
As the Aggarwals were preparing to make the switch to solar, they received an email update about the BMW electric car. They needed a new car and it occurred to them that buying a new electric car and investing in solar panels on their roof did not have to be separate actions.
A solar system for home and car
By increasing the size of their solar panel system, they would be able to power both their home AND their new electric car AND improve their return on investment—all this while simultaneously locking in the costs to power their home and fuel their car for the foreseeable future. Upon learning this, they opted to increase the size of the solar panel system on their home and then signed a 2 year lease for a new electric BMW.
The details look like this:
- The Aggarwals added additional solar panels to produce enough electricity to run their electric BMW (approximately 2,500 kWh of extra electricity). The cost was an additional $5,300.
- Over the next two years, they will avoid approximately $3,700 in gasoline expenses.
- Their “fuel” costs for running their electric BMW will be $0.
- The increase in SREC revenue related to the increased size of his solar panel system over the next two years will be $1,300.
- At the end of the two year lease on their electric BMW, they will be very close to break even on their investment in the additional size of their solar panel system.
- If the Aggarwals decide to continue driving electric cars over the next 20 years (which they emphatically say they will), they will avoid approximately $34,000 in gasoline expenses.
- Their “fuel” costs for running their electric car will still be $0.
- Over the next 10 years, the SREC revenue related to the increased size of their solar panel system will be $6,500.
- The Aggarwals’ net benefit at the end of their solar panel system’s life will be somewhere in excess of $40,000.
- If we look at their outcome somewhat less conservatively and assume that their system will last 30 years as many do, their overall benefit will be more than $60,000.
To see an analysis of how electric cars (and electric cars powered by home solar panels) compare to traditional gasoline fueled cars and hybrids, check out our blog Need a New Car? Combining Solar Panels and Electric Cars Makes Perfect Financial Sense.