The other day we had a potential client postpone a meeting to discuss our proposal for their home due to "market instability." To say that the market has been unstable is a major understatement, but that got us wondering: in uncertain times, doesn't investing in solar make sense? We sure think so - hear me out...
The worldwide pandemic caused by the novel coronavirus (COVID-19) has induced travel bans, the cancellation of sporting events (MLB, NBA, March Madness, even NASCAR!) and social events (for once the show isn't going on on Broadway!), and even postponing some Presidential primaries, has done a serious number on the stock market.
Instability? Oh yeah!
During the month of March, the Dow Jones lost 20% of its value, and closed out the worst quarter for the market since 2008!
It is certainly reasonable for any investor to be concerned by such numbers, especially when a wild card - like a global pandemic - is the driving factor. Hard to plan for such an event, yet it can have enormous impact on the economy, at least in the short term.
The Stability of Solar
But now consider what makes installing solar on your home or business such an attractive investment. Modern equipment, like Enphase microinverters and LG solar panels, come with 25-year warranties, providing peace of mind. And no matter what happens -- short of the zombie apocalypse -- you are going to continue to need electricity to power your life, and that need is likely to only increase over time (think of your electricity usage twenty years ago compared to today). Electric utilities, especially the Investor-Owned Utilities like SCE, clearly do not have your personal best interests at heart (see above!), and their rates will continue to increase, even as service declines.
Which means that installing solar provides you with a reliable asset that will reduce your out-of-pocket costs for the next 20 years! We typically see payback periods that range from 5 to 10 years, with a 20 year ROI of 150%+ and IRR of 12-20% (though our largest residential client in SCE territory is looking at an eye-popping ROI of 460% and an IRR of 28%!).
Of course, your mileage may vary. But it is hard to imagine a scenario where the value of your solar investment drops 20% in a matter of days - but easy to do so for your 401k - because it just did!
If you would like to diversify your portfolio into a less risky investment, give us a call. We can help you trade up to solar!