Solar 2023…you had to know an update was coming, right?
Are you less than 60 years old? Do you have kids, or loved ones, or know anyone who is younger than 60? What I am going to talk about is not too late for them. Are you open-minded? If you answered any of these questions with a “Yes”…then you have a chance as well. Give this your full attention. If you answered some of these questions with a “NO”, don’t worry. I think you’re still going to enjoy the read.
If you’ve read what I share very often you’ve probably said to your spouse or loved one more than one time, “I’m really not sure how smart Randy really is”. If you said that you were likely not the only person.
It is true that I graduated in the bottom one-third of my high school class. You need to know that my high school class was not exactly made up of a bunch of Einsteins. I think some of my classmates had heard of college, but they had never actually been to one.
My major in high school was sports. I minored in girls. I can honestly tell you that I don’t ever remember taking a book home to study in my four years of high school. It was in high school that I developed one of my basic life tenets. What was that? “Don’t mistake activity with achievement”. Granted I was still working on the development of this philosophy in high school but the seed had been planted. Today’s financial strategy that I share bears the fruit of “Don’t mistake activity with achievement”.
How poor of a student was I in high school? Let me share some facts. I never got a single “A” in any class other than PE. I have my high school transcript to confirm what I’m telling you.
A numerical score of 70 was the minimum passing grade. As an example, in two years of high school Spanish, I never got a semester score higher than 71.
At our high school, each semester was made up of three six-week grading periods. During my first semester of Spanish, I opened the first six-week grading period with a stellar “F”. The basketball coaches sat me down. They told me that if I failed Spanish, I wouldn’t be seeing any time on the court. It didn’t matter that my coaches themselves couldn’t order a taco in Spanish.
I am the kind of person that does things when they absolutely need to be done and not a moment sooner. With the pressure on, during the second six-week Spanish grading period I managed a “B”. Bueno!! Then during the third and final grading period, after the basketball season had ended, I fell back to an “F”. My Spanish teacher, Senora Corngiebel was nice enough to give me a 70 for my semester grade. I passed Spanish although I couldn’t order a taco in Spanish, either.
Yes, I did go to college following high school. I did much better in college for one simple reason. The Vietnam War was raging. Being in college gave me a student deferment and made me exempt from military service until I graduated. It was at this point that “activity” meaning doing well in school meant “achievement” meaning not getting drafted and going to Vietnam.
I did graduate from college in four years. The Vietnam War was winding down just a little bit by then. In addition to not being all that smart, I have had some episodes of being unlucky.
In 1969 the political powers to be came up with the idea that they would have a military draft lottery. All men aged 19-26 would be in this lottery. On a cold winter night, everyone in my dorm gathered around a small TV set to watch the lottery results.
More than 50 years ago they ran the draft lottery just like they do the Mega Millions lottery. They had a series of ping-pong balls that rattled around randomly in a glass enclosure.
Every birthday during the year from January 1 to December 31, including leap day was printed on its own ping-pong ball. The first ball drawn had the birthday of “September 14” printed on it. The second ping-ball made everyone born on April 24 sick to their stomach. My birthday on January 23 came in at 118. In 1969 the highest number drafted from the lottery was 195. Had I not been in college with a student deferment I would have been drafted in 1969 and likely wading through a rice paddy a few months later. Where did YOUR birthday fall?
| 1969 U.S. Draft Lottery results | |||||
| 001. Sep 14 | 062. Apr 21 | 123. Dec 28 | 184. Sep 8 | 245. Aug 26 | 306. Jan 7 |
| 002. Apr 24 | 063. Sep 20 | 124. Apr 13 | 185. Nov 20 | 246. Sep 18 | 307. Aug 13 |
| 003. Dec 30 | 064. Jun 27 | 125. Oct 2 | 186. Jan 21 | 247. Jun 22 | 308. May 28 |
| 004. Feb 14 | 065. May 10 | 126. Nov 13 | 187. Jul 20 | 248. Jul 11 | 309. Nov 26 |
| 005. Oct 18 | 066. Nov 12 | 127. Nov 14 | 188. Jul 5 | 249. Jun 1 | 310. Nov 5 |
| 006. Sep 6 | 067. Jul 25 | 128. Dec 18 | 189. Feb 17 | 250. May 21 | 311. Aug 19 |
| 007. Oct 26 | 068. Feb 12 | 129. Dec 1 | 190. Jul 18 | 251. Jan 3 | 312. Apr 8 |
| 008. Sep 7 | 069. Jun 13 | 130. May 15 | 191. Apr 29 | 252. Apr 23 | 313. May 31 |
| 009. Nov 22 | 070. Dec 21 | 131. Nov 15 | 192. Oct 20 | 253. Apr 6 | 314. Dec 12 |
| 010. Dec 6 | 071. Sep 10 | 132. Nov 25 | 193. Jul 31 | 254. Oct 16 | 315. Sep 30 |
| 011. Aug 31 | 072. Oct 12 | 133. May 12 | 194. Jan 9 | 255. Sep 17 | 316. Apr 22 |
| 012. Dec 7 | 073. Jun 17 | 134. Jun 11 | 195. Sep 24 | 256. Mar 23 | 317. Mar 9 |
| 013. Jul 8 | 074. Apr 27 | 135. Dec 20 | 196. Oct 24 | 257. Sep 28 | 318. Jan 13 |
| 014. Apr 11 | 075. May 19 | 136. Mar 11 | 197. May 9 | 258. Mar 24 | 319. May 23 |
| 015. Jul 12 | 076. Nov 6 | 137. Jun 25 | 198. Aug 14 | 259. Mar 13 | 320. Dec 15 |
| 016. Dec 29 | 077. Jan 28 | 138. Oct 13 | 199. Jan 8 | 260. Apr 17 | 321. May 8 |
| 017. Jan 15 | 078. Dec 27 | 139. Mar 6 | 200. Mar 19 | 261. Aug 3 | 322. Jul 15 |
| 018. Sep 26 | 079. Oct 31 | 140. Jan 18 | 201. Oct 23 | 262. Apr 28 | 323. Mar 10 |
| 019. Nov 1 | 080. Nov 9 | 141. Aug 18 | 202. Oct 4 | 263. Sep 9 | 324. Aug 11 |
| 020. Jun 4 | 081. Apr 4 | 142. Aug 12 | 203. Nov 19 | 264. Oct 27 | 325. Jan 10 |
| 021. Aug 10 | 082. Sep 5 | 143. Nov 17 | 204. Sep 21 | 265. Mar 22 | 326. May 22 |
| 022. Jun 26 | 083. Apr 3 | 144. Feb 2 | 205. Feb 27 | 266. Nov 4 | 327. Jul 6 |
| 023. Jul 24 | 084. Dec 25 | 145. Aug 4 | 206. Jun 10 | 267. Mar 3 | 328. Dec 2 |
| 024. Oct 5 | 085. Jun 7 | 146. Nov 18 | 207. Sep 16 | 268. Mar 27 | 329. Jan 11 |
| 025. Feb 19 | 086. Feb 1 | 147. Apr 7 | 208. Apr 30 | 269. Apr 5 | 330. May 1 |
| 026. Dec 14 | 087. Oct 6 | 148. Apr 16 | 209. Jun 30 | 270. Jul 29 | 331. Jul 14 |
| 027. Jul 21 | 088. Jul 28 | 149. Sep 25 | 210. Feb 4 | 271. Apr 2 | 332. Mar 18 |
| 028. Jun 5 | 089. Feb 15 | 150. Feb 11 | 211. Jan 31 | 272. Jun 12 | 333. Aug 30 |
| 029. Mar 2 | 090. Apr 18 | 151. Sep 29 | 212. Feb 16 | 273. Apr 15 | 334. Mar 21 |
| 030. Mar 31 | 091. Feb 7 | 152. Feb 13 | 213. Mar 8 | 274. Jun 16 | 335. Jun 9 |
| 031. May 24 | 092. Jan 26 | 153. Jul 22 | 214. Feb 5 | 275. Mar 4 | 336. Apr 19 |
| 032. Apr 1 | 093. Jul 1 | 154. Aug 17 | 215. Jan 4 | 276. May 4 | 337. Jan 22 |
| 033. Mar 17 | 094. Oct 28 | 155. May 6 | 216. Feb 10 | 277. Jul 9 | 338. Feb 9 |
| 034. Nov 2 | 095. Dec 24 | 156. Nov 21 | 217. Mar 30 | 278. May 18 | 339. Aug 22 |
| 035. May 7 | 096. Dec 16 | 157. Dec 3 | 218. Apr 10 | 279. Jul 4 | 340. Apr 26 |
| 036. Aug 24 | 097. Nov 8 | 158. Sep 11 | 219. Apr 9 | 280. Jan 20 | 341. Jun 18 |
| 037. May 11 | 098. Jul 17 | 159. Jan 2 | 220. Oct 10 | 281. Nov 28 | 342. Oct 9 |
| 038. Oct 30 | 099. Nov 29 | 160. Sep 22 | 221. Jan 12 | 282. Nov 10 | 343. Mar 25 |
| 039. Dec 11 | 100. Dec 31 | 161. Sep 2 | 222. Jun 28 | 283. Oct 8 | 344. Aug 20 |
| 040. May 3 | 101. Jan 5 | 162. Dec 23 | 223. Mar 28 | 284. Jul 10 | 345. Apr 20 |
| 041. Dec 10 | 102. Aug 15 | 163. Dec 13 | 224. Jan 6 | 285. Feb 29 | 346. Apr 12 |
| 042. Jul 13 | 103. May 30 | 164. Jan 30 | 225. Sep 1 | 286. Aug 25 | 347. Feb 6 |
| 043. Dec 9 | 104. Jun 19 | 165. Dec 4 | 226. May 29 | 287. Jul 30 | 348. Nov 3 |
| 044. Aug 16 | 105. Dec 8 | 166. Mar 16 | 227. Jul 19 | 288. Oct 17 | 349. Jan 29 |
| 045. Aug 2 | 106. Aug 9 | 167. Aug 28 | 228. Jun 2 | 289. Jul 27 | 350. Jul 2 |
| 046. Nov 11 | 107. Nov 16 | 168. Aug 7 | 229. Oct 29 | 290. Feb 22 | 351. Apr 25 |
| 047. Nov 27 | 108. Mar 1 | 169. Mar 15 | 230. Nov 24 | 291. Aug 21 | 352. Aug 27 |
| 048. Aug 8 | 109. Jun 23 | 170. Mar 26 | 231. Apr 14 | 292. Feb 18 | 353. Jun 29 |
| 049. Sep 3 | 110. Jun 6 | 171. Oct 15 | 232. Sep 4 | 293. Mar 5 | 354. Mar 14 |
| 050. Jul 7 | 111. Aug 1 | 172. Jul 23 | 233. Sep 27 | 294. Oct 14 | 355. Jan 27 |
| 051. Nov 7 | 112. May 17 | 173. Dec 26 | 234. Oct 7 | 295. May 13 | 356. Jun 14 |
| 052. Jan 25 | 113. Sep 15 | 174. Nov 30 | 235. Jan 17 | 296. May 27 | 357. May 26 |
| 053. Dec 22 | 114. Aug 6 | 175. Sep 13 | 236. Feb 24 | 297. Feb 3 | 358. Jun 24 |
| 054. Aug 5 | 115. Jul 3 | 176. Oct 25 | 237. Oct 11 | 298. May 2 | 359. Oct 1 |
| 055. May 16 | 116. Aug 23 | 177. Sep 19 | 238. Jan 14 | 299. Feb 28 | 360. Jun 20 |
| 056. Dec 5 | 117. Oct 22 | 178. May 14 | 239. Mar 20 | 300. Mar 12 | 361. May 25 |
| 057. Feb 23 | 118. Jan 23 | 179. Feb 25 | 240. Dec 19 | 301. Jun 3 | 362. Mar 29 |
| 058. Jan 19 | 119. Sep 23 | 180. Jun 15 | 241. Oct 19 | 302. Feb 20 | 363. Feb 21 |
| 059. Jan 24 | 120. Jul 16 | 181. Feb 8 | 242. Sep 12 | 303. Jul 26 | 364. May 5 |
| 060. Jun 21 | 121. Jan 16 | 182. Nov 23 | 243. Oct 21 | 304. Dec 17 | 365. Feb 26 |
| 061. Aug 29 | 122. Mar 7 | 183. May 20 | 244. Oct 3 | 305. Jan 1 | 366. Jun 8 |
| People born on bold dates were called to serve. | |||||
As the war was winding down, it looked as if my number, #118, would be drawn in 1971 the year I graduated from college. If a person’s draft number was reached, they got drafted for two years. The way the system worked was that if you got drafted you were drafted…end of story. Of course, there were alternatives to military service.
I know one fella who claimed mental illness. This guy was dismissed from the service. Yes, he was a jerk. He didn’t have the kind of mental problem that should have dismissed him from his obligations. He gleefully told me he was faking it. He was just an unpatriotic draft dodger. This guy ended up dying an early death. Yes, karma can be troublesome!
Speaking of draft dodgers, some people left the country and protested the war from the safety of Canada. At the time people who did this were not thought of kindly by most groups.
The third and final alternative military option, assuming you passed the physical exam, was to simply enlist in the service. If you enlisted before you were drafted you could pick your branch of service. I happened to be living in Peoria, Illinois at the time. I thought if the stars ever aligned and I had any success in business that success would come three hours north in the windy city of Chicago. Chicago was my dream location.
It should be noted that eight years into my business career I made it to Chicago! This was after relocations from Peoria to Cincinnati to Phoenix to Los Angeles to Connecticut. I made it to Chicago! However, after three years of living in Chicago with the temperature never getting above freezing, I demanded a transfer back to Southern California. This time I was lucky. The folks who needed to help me helped me. In 1983 we moved back to SoCal and have been here ever since. Had we not made it back to California the main purpose of today’s message might never have become a reality.
Anyway…to avoid being drafted, I enlisted in the United States Marine Corps. I knew that once I was released from active duty, I could easily continue in the Marines with a reserve program in Chicago. I would have a longer potential liability of being deployed going into the Marines this way than if I was drafted. I never did go to Vietnam. I was unlucky with the lottery. I was lucky to have learned the “coping” skills of Marine Corps boot camp for which I am profoundly grateful today.
Wait! I feel I may have digressed. What does the fact that I’m not very smart and can be prone to being unlucky and am quite happy putting in the minimum effort to get the maximum results have to do with today’s topic? Lots. One doesn’t have to be very smart if smart people can be a major part of their inner circle. Unlucky? Yep, that ping pong ball lottery was very unlucky for me. However, in some ways going through Marine Corps boot camp was a blessing in disguise. Shortly thereafter my good luck continued when I won the marriage lottery.
I graduated in the lowest one-third of my high school class. I married a young woman who was the salutatorian of her 400-person high school class and she was good-lookin’. Yes, we were at opposite ends of the educational spectrum. I was street-smart. She was book-smart.
I have always, kiddingly, referred to Carol as a “library girl”. She went to the library to study. In high school, I went to the library to meet my friends…until I got kicked out of “library” for the semester for being “disruptive”. In college, I would meet Carol in the library while she studied. I would sleep until she finished studying!
My wife does NOT subscribe to the theory of “Don’t mistake activity with achievement”. She is 100% “activity” 100% of the time. I enjoy a pleasant stay on the sofa. She is a whirling dervish. By the way, we had the great opportunity to see an actual whirling dervish ceremony on a trip to Turkey. This is a religious activity. If you get the chance don’t miss seeing this.
We ended up having three children. They all graduated from UCLA in four years. I’m guessing Carol’s intelligence was responsible for the genetics portion of this outcome. I am quite pleased they took after Carol regarding their education more so than my approach. After school? I’m always guiding them in the direction of “Don’t mistake activity with achievement”.
Did you know that UCLA had 169,800 applications for the fall, 2023 term? UCLA admitted about 13,000 of those people. No other school gets as many as one-third of this number of college applications. I have t-shirts that I bought during my visits to both UCLA and Harvard. When I wear those shirts, people will invariably ask me. “Did you ‘go’ to UCLA or Harvard”? I can honestly say that I “went” there…to get the T-shirts!
I’ve always been a big proponent of holding people accountable. When our kids were younger they were always working on one “incentive” program or another. When they were aged 16-22, we had a “work” program requirement for each of them. This age range covered six summers. Our program was simple. The kids needed to earn $1,500 each summer for their college fund. After that, they could spend every day at the beach.
When their undergrad time at UCLA was finished, they graduated with no school loans whatsoever. They had some scholarships. I added a dollar or two. If I got back five bucks every time I bragged about their accomplishments then I have been repaid ten times over. I earned a $15 rebate with this message alone!
So why am I so comfortable telling you that I’m not the sharpest knife in the drawer? Why do I tell you that I married well, don’t try very hard, and had three smart kids? It’s simple really. You don’t have to BE smart if you hang around smart people. You don’t have to try very hard if the system you have does its job. You just don’t.
As background for what I am about to share you need to know one really important thing. I don’t really do anything that is my own idea. I can confidently say that I have implemented a lot of really good ideas. However, none of the things that I have chosen to do or not do were my own ideas. Everything I have done has always been someone else’s ideas. Yes, I do massage other people’s ideas to meet my own needs.
I make decisions quickly. If I hear about someone else’s great idea, why wait? One of my many favorite life adages is:
“On the plains of hesitation bleach the bones of countless millions who, at the dawn of decision, sat down to wait, and waiting died”
Yes, I am one of those people who can make decisions quickly, but I am always using someone else’s ideas. As time passes, I sometimes forget who gave me the idea I might be using. Then sometimes I mistakenly begin to think that whatever idea I have now been using was MY idea. That’s never good!
For that, I truly apologize to the people who came up with the ideas that I use, if I didn’t give them proper credit. Let me just say this once and for all. If after saying to your spouse or loved one, “I’m not really sure Randy is that smart, but he does seem to have a few good ideas but I’m pretty sure he got them from someone else” you need to know you are correct about that.
Since we are sharing so many facts, I think you will agree with me when I say my newsletters are a little on the long side. Each person’s view is really based upon their own expectations, isn’t it? I’m reading a Mike Tyson biography that is nearly 600 pages long. Mike Tyson? 600 pages? Really? My judgment about the length of his book is based on my expectations. I never told you that I write short stories! No, I don’t write five-line limericks. Sometimes just to get everything out there, and to provide a moniker of entertainment the story is a little bit longer.
Speaking of Mike Tyson…let’s get to the MAIN event. Today I don’t write to try to convince you that I’m not very smart. I don’t write to tell you I am unlucky with draft lotteries. I write to tell you that Carol and I are celebrating our ninth anniversary of having solar! That’s right! In 2014 we added 38 solar panels to the roof of our modest seaside cottage overlooking the Pacific Ocean in San Clemente, California.
I have only one regret about our solar experience. We should have done it sooner! I should have discovered someone else’s idea to install solar sooner!!
Sometimes when you do something a bit risky or crazy or whatever invariably some wise guy will come up and ask, “Well, how’s THAT working out for you?” If I get that comment about our solar installation all I can say is, “Best ever”!
Today I’m here to tell you exactly how solar has worked out for us. I will explain how solar might work for you. I will show you have you can get your solar system to pay out twice as fast. Your return could easily be in the six figures during the life of the system. It would be best if you acted fast. This is 2023 and I’ve been telling everyone about solar since 2014. Those who acted back then are winners.
One of the reasons I chose solar is because electricity rates in California are astronomically high. As you will come to find out the higher your electricity rates the more attractive solar becomes as an investment.
In some ways, I think it’s a misnomer to think of California as being an expensive state. In other ways, it is absolutely true that California is expensive. Yes, California real estate is super expensive. Yes, gasoline prices are the most expensive in the nation. Electricity rates, except for Hawaii, are the most expensive in the country. I know what you might be thinking, “What’s left?”
If a person has lived in California for a long time California real estate is NOT expensive. As a matter of fact, California real estate prices have gone up so much for so long that long-time Californians have gotten rich from their real estate. California real estate taxes are a pittance for these people compared to other states.
On the other hand, if you are a newcomer to the Golden State look out. Would you like to move into California and visit an open house where the home you were looking at was built in 1950, offered 1,000 square feet, a one-car detached garage, one bathroom, and the spaciousness of a pickle ball court all with a price tag of $2 million? Likely not. Most everything we encounter in life is about timing and circumstance.
“Time and circumstance” is another of my life’s adages. Decisions are based on timing and circumstance. If the situation was different or came along at a different time the action you select would likely be different. We need to make decisions and act based on time and circumstance.
In fact, for some people, California is insanely expensive. For others, California has created real estate wealth they never could have imagined. Yep. There are always two sides to every story. Time and circumstance.
Today, if we didn’t have solar, our little bungalow would carry an average monthly electric bill of $500. Electricity is a bit more expensive in the summer and a little bit less in the winter. Just know this. I have a really big spreadsheet that confirms the truth of what I have said and will say about our solar experience.
Back in April 2014 exactly how much did our 38 solar panels (above) cost? How does somewhere right around $33,000 strike you? Does that seem high or low?
As I went about making our decision about solar there was the option of leasing the panels or buying them. If solar was such a great idea, why would I only want to lease them? If I had decided to lease the panels, my cost would have been less. However, if I leased the panels quite a bit of the benefit would go to the people leasing me the panels. If they didn’t get some of the benefits, why would they want to be solar middlemen? Leasing didn’t sound like a good idea to me. If I was going to do this, I was going to buy the panels and get all the benefits. There is a lot of truth to the saying, “You have to spend money to make money”. I will spend money all day long if I expect the return for doing that to be there.
I had three or four salespeople come over and pitch me on solar. One fella was telling me about the benefits of Solar from a “green” perspective. I don’t care much about the “green” story. Don’t get me wrong. I want clean water and clean air as much as anyone else.
I just didn’t happen to think that putting 38 solar panels on our roof was going to have much effect on global warming or whatever you might call this situation. The phrase that involved the words “peeing in the ocean” came to mind.
As a matter of fact, after one of the salespeople had mentioned the word “green” about 27 times in his presentation I asked him to stop talking for just a minute. I looked across the table and made strong eye contact with him. Then I said something that is mentioned almost on a daily basis in the Marine Corps. I told the young man that if he mentioned “green” one more time I was going to XXXXX. I’m sorry. I could tell you what I told him but I really feel my comments would offend some people. There is rarely a need to offend people although at times that does seem like sport.
When I did share in the original draft of this message what I REALLY told the solar salesperson I followed with this paragraph. This might give you some indication of how graphic my words were.
“Wait. Wait just a minute before you hit the unsubscribe button. I don’t want you to be offended by these words. I know you are most likely proud of the United States Marine Corps. You should be. You just need to know, in case you don’t, that every day a Marine Corps drill instructor is using these very words and others even more colorful and descriptive with their Marine Corps recruits. We good? Nobody’s offended? Great. I can confirm that the solar salesperson never referred to “green” again in his sales pitch!”
I will make this special one-time offer. If you email me and ask, I will share these words with you. You just need to agree not to be offended.
Nevertheless, I did contract to pay $33,000 for our solar panels. One of the things that made that number just a little bit more palatable was that the United States government and the state of California kicked in about $12 grand to help me out. This made my net cost for solar $21,000.
I’m really hoping no one has any heartburn toward me for accepting $12,000 from various government entities so I could put solar panels on my roof. I don’t make the rules. I only play by the rules. I don’t think anymore can or should be expected of me.
I think of myself as an upstanding American. I agree to be part of a fair and honest election that sends our elected officials off to do what is right for me, an American citizen. I don’t agree with all the rules that come out of this process but then I doubt most other people do either. As an American, if they say we’re going to give you a $12,000 tax credit if you put solar panels on your roof then I will factor that into my decision. Time and circumstance, right? Again, we good with this?
Just as a reminder, I don’t talk about politics and religion in my newsletter messages. The above does not violate my policy. Like I said I don’t make the rules. I don’t break the rules. I will try to skirt the rules. I don’t worry about the rules. I can’t change anything. If I can’t change things, I don’t give it another thought. If I thought I could change things then I would.
Sometimes the government says, “Randy, we are going to give you some special tax rebates if you have a really big mortgage so the American public can help you afford your modest seaside cottage”. Sometimes they say, “Randy, we’re going to give you some special tax credits if you buy a Tesla. You’re gonna love that car”. Sometimes the government will say, “Randy, we’re going to give you $12,000 in tax credits if you are willing to put 38 solar panels on the roof of your little homestead”. Remember, I told you I get ALL my ideas from others!
Somewhere along the line, I learned to build custom spreadsheets. I retired at the age of 52 because I built a custom spreadsheet. That spreadsheet told me I could march into my boss’s office and quit my job.
What if I had messed up in the building of that spreadsheet? What if I told my boss to “take this job and shove it”? Some may have to think about the photo reference…then what if I went home that night and discovered I had transposed a few cells in the super spreadsheet? Can you imagine what Carol’s reaction would have been? That would have been embarrassing, wouldn’t it?
I’m happy to tell you that after 21 years of retirement, I didn’t make any mistakes with that spreadsheet. We didn’t go broke. I didn’t have to go back to work. I still use that spreadsheet often. I still try to spend like a drunken sailor. That spreadsheet is still telling us that I’ll never have to work for money another day in my life.
O.K. I just slapped myself. I’ve got to get back to the solar topic and stick to it. The rest of my message is exclusively about solar. I promise.
I created the mother all retirement spreadsheets. Then I created the mother of all solar spreadsheets. The solar spreadsheet told me a lot about our solar past as we went along. It also made some projections about our solar future as we moved forward.
The people who sold me my solar panels gave me a projected amount of production the panels would provide each month. The guy told me his estimates were on the conservative side. He said I should probably expect a bit more solar output than his projection. You know what? Everything the sales guy said about my solar production from my system turned out to be true. Plus, the guy I ended up buying my solar equipment from never mentioned “green” once in our deal.
I also have the capability of measuring on an hourly, daily, weekly, or monthly basis, how much my solar system is producing. As a matter of fact, I could look at an app on my iPhone to see the daily production by each panel. It’s sort of, but not really, like owning a dairy farm and electronically monitoring each cow’s production. If one panel is just a little bit off, I’ll know about it…right after I finish checking my Facebook posts.
Our panels have been on our roof for nine years now. I can tell you this. I have never spent a penny on maintenance for those panels. I’ve taken a hose up on the roof about three times in those nine years and washed off the panels. I found that process about as productive as studying Spanish. Don’t mistake activity with achievement! I didn’t see any material change in the electrical output after doing that. I concluded that cleaning the panels was a waste of time and went back to lying on the couch.
I told you that electricity is expensive in California. How expensive? We get our power from San Diego Gas and Electric Company. Out of the kindness of their heart, SDG&E gives everyone a base amount of electricity each month of up to 350 kWh….at $0.44 per kilowatt hour. For every hour we use above 350 kWh in a single month the charge is $0.56 per kilowatt hour.
Do you know how much your power company charges for each kilowatt hour of electricity you use? If you don’t, I’d recommend finding out that number. If you do know your electricity rates, you’ll be smiling now. You’ll be thanking your lucky stars you don’t pay what we do in California.
Would you mind if, at this point, I cut to the chase?
After all tax credits, the total cost of my solar was $21,000. My spreadsheet calculates how much our electric bill would be each month if we were paying the rates in effect at the time and didn’t have solar.
I am happy to report that our system paid for itself in a period of just 4.4 years. I have never heard of anyone paying out their solar system in such a short amount of time. Yes, we’ve benefited tremendously from the rapidly increasing prices for electricity in the Golden State.
In April 2014, nine years ago, California had a four-tier electricity pricing system. The top rate was $0.30 per kWh. Now the top rate in California, nine years later is $0.56 per kilowatt hour. Rates have nearly doubled in nine years.
Since 2014, just as the company that sold me my panels predicted, our electricity expense has averaged…zero. When you pay zero for something that’s about the same as free! This even includes things like delivery charges and ancillary taxes that can’t be avoided. As a matter of fact, in our year just ended in April 2023 the electric company sent us a check for $290 to even things out!
If we didn’t have solar our average electric bill would be $500/month or $6,000/year. In order to pay $6,000 to SDG&E I would have to withdraw about $9,000 every year from our IRA to cover the taxes owed by trying to clear $6,000 to pay for our electricity. Got that? Of course, by not taking $9,000 from our IRA that $9,000 grows by 7-8% every year and every year and on and on.
Solar has been a tremendous win for us. Would Solar be a tremendous win for you? That depends. Many people think it depends on how much sun your climate gives you. Sorta but there’s a lot more to it.
Some of you might be saying “I don’t live in a sunny climate”. Have you ever driven past the Indianapolis International Airport? I’ve done that many times. IND has the largest airport-based solar farm in the world. Just their own solar array can power 3,210 homes for a year. I would not classify Indianapolis as a place I would want to go for a year-long sunny seaside beach vacation. Nevertheless, they do generate a lot of solar power.
These are the two main items to consider regarding the question, “Is solar a good idea for me?” How expensive would solar be to install? How much do you pay for electricity?
Let’s say a complete solar panel system will cost you $20,000. Then let’s say your average monthly electric bill is $200/month or $2,400/year. Doing the simple math tells me it will take 8.3 years (20,000/2,400) to pay back the cost of your system.
The cost of a solar system in your area will probably be fixed in a somewhat narrow range. In the above example, the cost was $20,000. Lots of people really don’t pay very much in electricity expenses although nearly EVERYBODY seems to think WHATEVER they pay for anything is outrageous. That’s just the way we humans think about things.
Magic! Now it’s time to prepare for the magic!
In our example, we said the monthly electric bill for your home was $200/month. But wait. Let’s say you bought an electric car and charged it at home. Let’s say you pay about $500/month for gasoline right now. It would be reasonable to expect that the cost of electricity for an electric car might be $200/month if you were driving the miles that would cost you $500/month in gasoline.
Photo credit: In the above photo I was “teaching” Carol how to charge the battery at a supercharger with my Tesla. No, she wasn’t smiling…but she’ll get used to it.
Now we have both a new and compelling calculation. Your household electric bill is $200/month and now the electric bill for your car is $200/month. If your solar array costs $20,000 and wipes out a $400/month electric bill that $20,000 solar system now pays for itself in just 4.1 YEARS (20,000/4,800). Once the system pays back what it costs you in the first place both your household and automobile electrical expenses are ZERO…for a very long time!!!
Of course, you can probably count on your electricity bill to go up over a period of the next 10 years. Our electric bill of $500/month nearly doubled in nine years. Ten years from now? If our electric expenses double again our bill would be $1,000/month in 2033…when my current passport expires! It wouldn’t be unheard of to think the cost of gasoline will be higher in ten years than it is today. Once your system pays itself off it doesn’t really matter that electric rates and/or gasoline prices are increasing. You won’t be paying those increases!
Do you remember what I shared with you toward the beginning of this message? No, not what I told the solar salesperson…but this.
“On the plains of hesitation bleach the bones of countless millions who, at the dawn of decision, sat down to wait, and waiting died”
You can spend all day telling yourself why a new idea WON’T work. Lots of people think that way. I recommend trying to think how this type of idea WILL work.
I told you our system paid itself off in 4.4 years. Let’s round that number to 5 years. The savings for years six through nine would look something like this when the money was invested at 8%/year, roughly what I have been earning on my retirement investments.
Year 6 – $7,920
Year 7 – $7,440
Year 8 – $6,920
Year 9 – $6,4,40
Hey! That’s more than $28,000 in savings after the system was paid for through today! That’s about $42,000 I didn’t have to take out of my IRA before tax. In my world, $42,000 is starting to become a really big number!
Remember when I asked you in the first paragraph if you were younger than sixty? Anyone younger than 60, and older as well, can expect solar savings for the NEXT ten years easily. My calculations say our electricity saving for years 10-20 could easily yield more than $90,000. Of course, the invested value of the $28,000 we’ve already earned would be worth more than $60,000 invested at 8% over 10 years. That’s a total cash flow of somewhere in the neighborhood of $150,000 in the first 20 years of solar ownership. That’s a nice neighborhood to be in when you don’t have to do much to get the reward. This is activity WITH achievement!
Did you know our solar panels are guaranteed for 25 years?
Oh, did I mention the effect of solar on the resale value of your home? Do you think a home that has no electric bill might be worth more than a similar home next door that has a $6,000/year and increasing electric bill? I do. When I refinanced our last home loan (2.25% interest-only) our home’s appraisal price benefited from our having solar.
I think our solar panel deal was one of the best financial investments I’ve ever made. It’s right up there with investing in California real estate and getting an interest-only home loan and buying a Tesla automobile with free super-charging for as long as I own the car.
In closing, I would like to offer this. After reading one of my posts, I’m perfectly fine if you say to your spouse or loved one, “I honestly don’t think Randy is all that smart. Luckily, Carol is”. However, to be fair, I think you should follow up that comment with, “But at least he’s willing to take other people’s ideas and run with them as his own.
Randy Lewis
Sunshine in my pocket