My electricity rates just increased… again.

Portland’s only electric provider PGE recently announced a 17.2% increase in rates to comply with ambitious state mandated clean energy targets, remaining resilient during weather events, and inflation adjustments.

Many people are understandably unhappy about this; My response is… *shrug*. (As did PGE’s stock price)

I read about the news of this price increase on reddit, alongside numerous angry comments decrying the unfairness of our ‘greedy for-profit energy provider’. So I was genuinely surprised when I found that utility rates in Portland are actually slightly below the national average. While at the same time, Oregon ranks among the top 10 states for sustainable electricity production. We’re getting a great deal and have nothing to complain about, hilarious.

In absolute terms this price increase is on the order of $15-$60/month for most people, depending on your use. Not a lot considering I’d be hard pressed to think of any service I pay for that offers a higher utility per dollar than energy. This weeks ice storm black outs were a great reminder of that!

On the other hand, that bill adds up. In 2021 I paid about $1100 total for electricity. I happened to have some extra cash on hand and the stock market valuations at that time were insane. Recalling a now 10 year old post from “Mr. Money Mustache” on beating the S&P500 with insulation I took a serious look into the cost of buying solar panels as an alternative investment.

I want to share that experience in this post as a list of useful tips for you:

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Tip 0: Figure out if solar panels make sense for you:

Type your address into Google’s Project Sunroof tool to check if your roof has enough sunlight to be worth capturing.

With that information grab your power bill and open up a spreadsheet to calculate your potential ROI. That calculator also compares solar to stocks to give you an idea of the possible opportunity cost, but reality may have other plans of course.

On top of that, you’re going to want a new roof to put them on. The panels will protect the shingles underneath but if you ever need to redo your roof they’ll have to be removed by the installer first, for a fee. On the bright side it should take less than an hour tops to take down, they work fast!

That calculator excludes the option of adding a grid independent battery backup system, which would double the entire project cost. I opted out of that, with the caveat being a grid outage also shuts down my panels for safety.

Tip 1: Figure out what type of system you want before calling anyone.

There are 2 kinds of array configurations: Series ties every panel together to a single inverter while a modular configuration matches each panel with its own inverter. Modular is little more expensive, but also performs better with partial shade & remains operational if any piece of the systems goes bad so that’s the route I went.

Every company has its own standard system they will tell you is the best. My installer recommended this panel model, and this inverter model for reference. It’s worth a look at reviews online before committing.

Tip 2: Get your finances in order & get multiple quotes.

The cost per watt of solar has come down significantly over time, but expect installation to be 50-70% of the cost. You could save the cash & DIY an isolated garage or something, but you can’t legally grid-tie it yourself.

I generally express open hostility to any salesman who dares knock on my door. You have to find good opportunities , they don’t find you! These companies have a well deserved reputation for aggressive sales tactics and lying with numbers but 100% sales commissions on anything will do that. In my case I actively contacted numerous local installers for quotes by phone. There’s a lot out there.

Shopping around so should be a given for anyone making any major purchase or hiring a contractor. The quoted prices varied widely and communicating with many companies gave me more context for comparison and expectations. Some sales reps didn’t come off as knowledgeable about their own product/industry or even polite. An instant disqualifier.

One thing I found true of every company I talked to was that financing rates were usurious even with great credit & a Fed funds rate at 0! Also, leasing = fleecing; there’s simply no ROI for that path and you end up with a lien on your home which will make it difficult to sell. Solar as an investment only makes sense if you pay in cash.

Tip 3: Read the fine print. 

Phone conversations are non-committal of course, but once you have someone come to your house for a proper quote the fine print might say you have a few days to act, and if you choose not to proceed you’ll be billed for the evaluation!

One thing I missed on my quote was 2 boxes of LED light bulbs because they weren’t listed as a separate line item. I assumed they were included to help qualify for the state incentive or something but to this day I’m not certain. They might have been free or more likely they’re the most expensive LED bulbs I’ll ever buy! Considering their expected lifespan at least I’m set for life on bulbs 🙂

Tip 4: Expect to be deal with shady acting people anyway.

Solar installation is a competitive market and doing favors isn’t profitable. The timing of my commitment was ideal…for me. The second order effect of covid restrictions on supply chains and the Federal Reserve’s monetary policy saw the price & availability of solar panels & labor spike just after my deal was struck.

I talked to a lot of different people within my installers company and my review of their service is positive excluding 1 particular experience. They tried so hard to get out of the deal it was ugly. The ink was already dry and I didn’t take no for an answer so it swung in my favor; In the end I did have to exercise patience for 8 months until my system was installed, inspected, and finally activated. (This is much longer than typical.)

Tip 5: You may have to roll up your sleeves & deal with surprises

My first challenge was a neighbors tree that put half my panels in the shade. Tree trimming service quotes were insane so with my neighbors permission I used a 20ft long pole saw to chop it to size. My tool had a fiberglass extension handle but at that length it might as well been made of licorice. Dangerous, but I got it done.

Different states have different regulations for what constitutes acceptable installation practices. My 3rd party surveyors must have been new to Oregon because they overlooked a few things. Only after sign off did we realize my roof had 6 louvers and a bathroom vent directly in the way of where the panels would mount. (In some states you can mount over these. Can’t do that here!)

On the day of installation the installers proposed moving numerous panels to the sunless north face of my roof so we could proceed. Unacceptable! So I got a multi thousand dollar quote from a roofing company to move the louvers…no thanks. Instead I watched some YouTube videos, ripped them out, patched the holes, and installed new vents on the north facing side. (Lost some jeans to the tar in the process! Tedious sweaty work but not complex.)

When we were finally ready for a city review they (sensibly) refused to green light the project due to lack of safe access to the new control box. There was no safe place to stand to service it! Once again the only way to proceed was for me to sweat it out and move a stacked stone wall 1 foot to the right.

Tip 6: Financially Plan Accordingly

The total cost for my system (excluding tax credit) was $17,800 out of pocket, 50% up front and 50% after activation. It’s sized at 5.6 kilowatt to offset the majority of my electricity use. Any larger of a system wouldn’t have an ROI because I don’t get checks from PGE, but instead I get ‘store credit’. Basically the summertime months produce excess credit that I use in the winter. My typical bill is only $13 for a flat rate grid connection charge.

My installer integrated the state incentives into the quoted price, but the federal incentive is your responsibility to file on your taxes. I got $5,340 back as a tax credit that applied to the tax year we turned the system on. (All I had to do was file “IRS Form 5695”)

So Were Home Solar Panels Worthwhile?

Well now that it’s done I’m very happy with it. In 2023 the panels saved me ~$883/year of after tax money that would have been spend on electricity. For the net $12,460 I spent to get here that makes for a 7% rate of return. It’s been a solid alternative investment for a conservative part of my portfolio, though the Return On Effort was more fraught than I anticipated going into it.

In retrospect, I was bearish at the right time and if I had sat on this cash for a year and then bought stocks I’d be way better off. Of course I also could have bought shitcoin instead and I’d be in the hole 30% and get to feel like a jerk for contributing to something so poisonous. I could have done a lot of things different/better/worse with the cash. It’s easy to discount the cost of risk when looking in the rearview mirror. We can only evaluate the quality of a decision based on how you worked with the information you had, not by the outcome.

Home solar as an investment is best considered as if it’s a 25-30 year bond with monthly tax free coupons roughly tied to inflation, and whose face value depreciates over time, but you have to sell your home to collect that! (Solar ROI is best if you’re going to stay in the home for a long time.)

In theory the system should increase the value of your home by it’s cost, adjusted for changes in solar-install-costs and for it’s decreasing functional lifespan. Clearly a house with free electricity is worth more than one without, though not everyone likes the way panels look… or the idea of panels at all. Unfortunately there’s a major cultural aspect to this in the US. Less so where I am thankfully.

I like the investment from the perspective of being completely divorced from stock market performance, that it’s set & forget, & creates positive externalities. (Of course energy generation by any means also has negative externalities not represented by its monetary cost, but we do the best we can!)

I wanted to use actual numbers here so I gathered my old energy bills. From 2020-2023 I found that PGE had raised my electric rate by 13.22% in total, or 4.4%/year! Also my inverters have a web access portal so I can check their output to compare any time.

Tip 7: There is other low hanging fruit out there.

Obviously your results can vary significantly and not everyone has the resources to pursue a project like this. The easier alternative to energy production is to reduce your energy consumption with efficiency upgrades. If you’re looking for similar results there are cheaper projects out there.

Upgrading your insulation yourself basically has an instant ROI and makes your house more comfortable. I borrowed a thermal camera from work to find & seal the gaps in mine. (Check that attic access panel!)

Depending on your location & home’s age, a new heat pump is so energy efficient it can make financial sense to replace a functional furnace & air conditioner. Gotta do the math though.

Even a simple upgrade to a smart thermostat like Nest can noticeably reduce your bill and give you the opportunity to opt-in to a peak-consumption mitigation program. PGE offers $50/year to be slightly uncomfortable for a few hours 6 times per year. I’ll take it.

That’s all for now, hope this post helps guide someone else interested in this path!

*Full disclosure since this affects numbers, my household already consumes less energy than most and since 2020 I’ve participated in the Energy Trust of Oregon program, an opt-in to pay a higher rate to offset your consumption by subsidizing grid scale efficiency & renewable energy upgrades. Maybe I’m a sucker, but I value sustainability projects enough to toss that $50/yr back out the window to support this. My shop is in my basement and participation is consistent with how I want to do business.

**My installer was Blue Raven Solar, who I still believe to be the best of the bunch available to me. On the off-chance this post inspires anyone to pursue solar, that link can be used to collect a referral fee that I’d split with you. The solar panel supply shortage a couple years ago has given way to a glut currently. Probably a good time to look into it.