Early adopters are consumers who aspire to own the newest gadget even if it means paying top price. When it came to a renewable energy plan for our home and automobiles, we were no exceptions. Despite the high cost, we wanted our home and two cars dependent on 100 percent clean and renewable energy. Why? Where did we get the money? Was our idealism too expensive? Would this energy cost-saving-investment make a difference in our monthly electric bill? How long could it take to pay for itself? This blog post answers those questions. We took the plunge, began our conversion with 24 solar panels seven years ago and a few years later purchased two 100 percent electric cars.
Our primary motivation was to reduce our bills from Southern California Edison, which is the most expensive electric power company in the country and to take advantage of power company incentives and federal tax credits. We had a big-picture motivation too: With our long-term commitment to green consciousness, we support our national goals of clean, renewable, and efficient energy production and consumption. Tesla employs American ingenuity and employees, and supports our home-state California economy. These decisions to convert our home and our cars to 100 percent renewable energy over the last seven years were obvious ways to support our country and the planet.
Where did we get the money?
Because of our 35-year history of frugal living and disciplined investing, we had the financial resources to proceed. Our portfolio's growth since the 2008 stock market crash was facilitated by self-managing our low-cost, diversified portfolio. Financial advisers are expensive, even the fiduciaries. We figured that our cost of going green was actually less than what we would have paid an adviser, who could have easily eaten 2 percent per year to manage our portfolio.
We share below what we paid for solar panels, a Nissan Leaf and a Tesla Model S, and how much we saved in energy costs. Keep in mind that prices for solar panels and electric cars will no doubt decline. The battery is the most expensive part in any electric car. Tesla Motors is planning to build a factory dedicated to creating and producing batteries at lower costs and longer driving range, and it is rolling out the first $35,000 (base price) Model 3 SUV by 2017. By 2020, electric cars and solar panels should be everywhere.
Seven years ago, we installed solar panels on our house. Three and a half years ago, we bought our first 100 percent electric car and finally 18 months ago, we purchased our second 100 percent electric car (picture shows our house with solar panels and our cars). In order for these expensive investments to work, we committed for the long-term. During our working careers in Los Angeles, we lived in the same house for decades and we have kept our previous cars for up to 20 years.
In 2008, we paid $33,000 for 24 solar panels. We received a federal tax credit of 30 percent ($11,000).
Before solar energy, our estimated home power bill averaged about $225 per month. Over the late spring, summer and early fall, AC cooling in our hot desert costs as much as heating a home during the cold winter months in other parts of the country. Our AC and swimming pool water pump increased our bill to about $400 per month during summer months. During the winter, the energy bill dropped to about $175.
Was it worth it? Yes. Using a conservative estimate of $225 per month, we would have spent $18,900 for electricity for the past seven years (84 months X $225). Instead, with solar power, we spent only $2,940 (about $35 per month X 84 months). We summarize all of the data below.
2011 Nissan Leaf and 2014 Tesla Model S
We paid $37,000 for the Nissan Leaf and $95,506 for the Tesla. We got back $15,000 in federal tax credits and $5,000 in state rebates through the California Clean Vehicle Rebate Project. Total government incentives: $20,000.
Estimating gasoline savings is a bit more complicated. Let us start with the total number of miles we drove our two electric cars: 42,618 miles. Driving this far in our previous gas cars (1999 Lexus and a 1997 Ford Explorer), we would have burned an estimated 2,660 gallons of gasoline. At an average of $3.57 per gallon, we would cost $9,500 over 3.5 years.
Summary of Costs and Savings, Tax Credit and IncentivesInvestments:
- 33,000 for the 24 solar panels (For the record, S.C. Edison's own incentive program of9,000 has already been subtracted from the solar panel company's42,000 price tag).
- 37,000 for the Nissan Leaf (Out-the-door price)
- 95,506 for the Tesla, Model 6 (Out-the-door price)
- Total Investment Cost:165,506
- 9,500 on gasoline over the past 3.5 years driving 42,618 miles.
- 11,000 federal tax credit on home solar panels
- 15,000 federal tax credits on two 100 percent electric cars
- 5,000 California Clean Vehicle Rebate Project for both cars
- 15,960 estimated home electric bill savings with solar
- Total savings, tax credits and incentives:56,460
What does our report of the last seven years mean for the future of our home and auto energy needs? Our out-of-pocket investment cost, a grand total of $165,506, has already been reduced to $109,046, but the savings don't stop now. It keeps going well into the future.
Projected Energy Savings From 2016 Through 2022.
Projected savings for our home and automobiles for the next seven years will be about $19,000 in gasoline and $15,960 (seven years again) in home energy. This is an estimated total savings of $34,960.
Our decision to go green is paying off economically. Our initial costs are gradually being paid back because we continue to save money with our solar production and not needing gasoline. The Tesla purchase will obviously take a long time. Still not convinced? What if we bought two expensive ICEs (internal combustion engines) such as a Mercedes-Benz, Jaguar or BMW?
Additional Economic and Environmental Advantages of 100 Percent Electric Cars
Electric automobiles carry enormous advantages over ICE cars. One of the important points usually left out of the debate is future maintenance costs. With those ICE cars mentioned above, we would have to purchase expensive gasoline, change the oil, have tune-ups, and smog inspections (California Residents). We know what dealers charge to maintain our cars -- a rip-off. Emission-free cars can use the carpool lanes as a single driver with a state-issued decal. We already know electric cars are reliable and green (engines always start) -- they are also exceptionally simple. They have no filthy and polluting CO2 emissions, no transmissions, no radiators. For example, the only maintenance of our Leaf in 3.5 years was a $14 cabin filter, a factory required brake fluid change for $52 and a tire rotation for $24.
During the next seven years, we will need to buy tires and possibly have the disc brakes maintained on each car, but that's it. All ICE cars are an expense -- not just gasoline. ICE cars comprise enormous complications with lots of moving parts. Electric cars have much fewer moving parts and thus never require expensive maintenance schedules, so we can keep our cars safely away from dealerships' costly service programs! Similarly, we keep our investments away from the greedy big banks, expensive advisers, and Wall Street brokerage firms.
Do You Want to Take the Plunge?
You read our story and the rationale for our conversion to a renewable energy house and omission free cars. We took seven years to implement our plan. You can do the same with your plan by converting slowly as the opportunities present themselves. As the technology costs decrease, the options of either solar panels, a 100 percent electric car or both may look promising for you.
The decision to purchase solar energy for your home remains optional. However, cars are necessary. So why not purchase a 100 percent electric car as a second car? You do not need solar panels to take advantage of your power company's lower kWh costs. Electric cars are charged between midnight and 6 a.m. when the kWh is a fraction of the cost of using power during peak times. Each car has a built-in timer to set when you want the car charged. In California, most utility companies have lower rates for customers owning electric cars. Our company, Edison, charges 11 cents per kWh between 10:00 p.m. and 8:00 a.m. versus 46 cents during "on-peak" afternoons.
If you are still deciding to install solar and purchase a 100 percent electric car, there is terrific news for you. Solar prices are declining and their energy production per panel is increasing. Obviously, with the steady development of technology, you will be getting more bang for the buck than we did. Also, ask your local real estate agent if solar panels increase the value of your house for resale.
Obviously, your choice of a 100 percent electric car is more complicated. How will you use the car? How far do you commute to work? Are charging stations available on your route to work? Our 110-volt standard home plug-in for our Leaf works fine (Tesla recommends a 220 volt plug-in for a cost of about $500). Some employers offer free charging stations for employees. There a hundreds of charging stations around the country (Click here for a charging station map). Some stations are privately owned and charge a fee, while publicly owned stations in public parking lots, municipalities and most hotels/motels that offer the service are free (for paid guests). Tesla has its own charging stations. They are free-for-life of the Model S owners, located all over the country, and fast charging. Tesla Motors realize that to sell their cars they must provide support for long-distance drives and 40-minute charging times.
We hope this blog post is informative enough to get you thinking about converting your home and car(s) to 100 percent green. The technology available to us was expensive. But we believe our decision will eventually pay for itself. You will not have to pay nearly as much, so your time committed to a green plan should be shorter. Tesla is a great car, everybody likes the performance and the style. It is the car of the future. In about 3 years, an affordable model will be available.
In the meantime, we are benefiting from our green energy plan now. We want to leave a carbon-free footprint and to encourage others. We are happy too that five of our neighbors converted their homes to solar power. That tells us sharing our green footprint story was worth it! Zero-emission technology is always improving and the future remains a very bright green. Take the plunge and invest for the future, you and your family's future, and the future of our country and the world.
Best of fortunes,
Steve and Dan