This recent blog post “For Retirement Savings, Solar Power Is a Better Bet Than the Stock Market” from thedailygreen.com shows how one octogenarian couple is using renewable energy to stretch their savings and contain costs in retirement. While this post focuses on solar photovoltaics, any clean energy system—solar, wind, geothermal or biomass—can produce the same benefits.
Fluctuating Energy Costs Can Stabilize With Solar
It’s simple. For most of us, our incomes in retirement will be fixed while many of our costs are likely to keep rising. This is certainly true for energy costs where, over the past two decades, prices for electricity, natural gas and heating oil have increased 5%-8% annually. Installing a clean energy system allows you to lock in your energy costs over the long-term. So like your income, your energy costs will be fixed, too. Since you will be generating your own electricity, your energy costs also will be dramatically reduced over the life of your system (anywhere from 25-40 years). With some systems, such as solar PV panels, you may even produce energy at no cost.
Even if you decide to finance or lease your system rather than buy it outright, the savings are still significant. In either scenario, you will reduce your monthly energy spend substantially and your lease or loan payment will become a fixed rather than a variable cost. Also, once you’ve paid off your loan, usually within just a few years, you will pocket the full savings amount for the remaining life of your system.
Solar Systems: An Opportunity to Invest
In addition to being an excellent hedge against rising prices, renewable energy systems are also a great way to invest your money. They generate returns that are more attractive than traditional investments (ranging anywhere from 5% – 20%). They’re also stable investments that aren’t subject to the ups and downs of the financial markets—another feature that makes them great for retirees. Also, because the returns from clean energy systems are actually savings and not income, they’re not taxable. And if that isn’t enough to convince you, clean energy systems also increase the value of your home.
You have to admit, if you’re retired or getting ready to retire, it’s a very compelling argument. But, why wait for retirement? Clean energy systems offer the same benefits to the rest of us for all the same reasons.
Also, check out our newer blog: Investing in the Sun: Solar PV as a Retirement Investment Strategy