Buying with Bank Financing

[Sunking]

There's a lot to be said for hard work and making things happen on your own. I wonder if his kids are as lucky to have his persistence, common sense, brains and sack ?

I know one of his Son's (Jim) and he is the CEO of Arvest Bank and manages all of Walton Enterprizes . From my understanding all his kids have the same work ethic and are successful. I know one of his Son's John was killed in a ultra-light plane crash. The eldest Samuel is a Lawyer and now runs Walmart.

[pleppik]

Ask anyone who has been poor then became wealthy and see which they prefer.

I've known poor people who became rich, rich people who became poor, and a few round-trippers.

All else being equal, everyone would rather have money than not. But things aren't always equal. I've had a few friends who stayed in lucrative jobs which they hated, and they definitely would have been happier with less money.

I also know people who have made a conscious decision to earn less than they could because they didn't want to give up time or autonomy. They also seemed happier with less money.

I think that for a lot of people, once you have enough money to live comfortably and worry-free, more money usually doesn't make you any happier.

[J.P.M.]

Ask anyone who has been poor then became wealthy and see which they prefer.

Sam Walton is a good example. His parents were poor dirt farmers during the Great Depression when he grew up. Walton put himself through college on ROTC program and worked odd jobs waiting tables so he could eat, and a paper route to help pay for his education. When he graduated in 1940 he went to work for JC Penny as a management trainee for $75/month. Did that for 18 months before being called into WW-II.

After the war he opened his own store (Ben Franklin) with a 20K loan from his FIL and 5K he saved during the war. PK Holmes became jealous of Sam's success and refused to renew Sam's lease at the Ben Franklin Franchise. PK Holmes wanted it for his Son. Sam sold out to Holmes for $50K which he though was a fair price.

Sam then purchased a new store front in Bentonville AR and called it Waltons. From there most everyone knows where the story leads to one of the richest man and families in history. Not bad for an OKIE dirt farmer huh?

There's a lot to be said for hard work and making things happen on your own. I wonder if his kids are as lucky to have his persistence, common sense, brains and sack ?

[Sunking]

I have a good friend who started poor. A real Horatio Alger story. He's worked very hard and has done very well in life, both socially and financially. He once said: "I been rich and I been poor. Rich is better." 'Nough said.

Ask anyone who has been poor then became wealthy and see which they prefer.

Sam Walton is a good example. His parents were poor dirt farmers during the Great Depression when he grew up. Walton put himself through college on ROTC program and worked odd jobs waiting tables so he could eat, and a paper route to help pay for his education. When he graduated in 1940 he went to work for JC Penny as a management trainee for $75/month. Did that for 18 months before being called into WW-II.

After the war he opened his own store (Ben Franklin) with a 20K loan from his FIL and 5K he saved during the war. PK Holmes became jealous of Sam's success and refused to renew Sam's lease at the Ben Franklin Franchise. PK Holmes wanted it for his Son. Sam sold out to Holmes for $50K which he though was a fair price.

Sam then purchased a new store front in Bentonville AR and called it Waltons. From there most everyone knows where the story leads to one of the richest man and families in history. Not bad for an OKIE dirt farmer huh?

[J.P.M.]

No money does not buy you happiness. It just makes it a whole lot easier.

I have a good friend who started poor. A real Horatio Alger story. He's worked very hard and has done very well in life, both socially and financially. He once said: "I been rich and I been poor. Rich is better." 'Nough said.

[Sunking]

Similar uncertainty to buying solar applies to many major financial decisions. I guess the tolerance of ignorance can be explained and allowed by saying since nobody knows squat about anything financial it's OK to take advantage ?

That is certainly reality and how it works. That is exactly how the Housing Market Crash of 2007/2008 happened with an flood of money to lend.

[J.P.M.]

I think most people approach the financial analysis side with one simple question: "Will it save me money?"

The problem is that while the question may be simple, the answer isn't necessarily simple. Sometimes the answer is clearly Yes, and sometimes the answer is clearly No, but at today's market rates for new solar installations and residential energy prices the answer is all to often "It depends."

Unfortunately, a lot of people aren't interested in any of the details beyond "it depends." I think there is probably a better way to explain the financial aspect so people don't get intimidated with discussion of internal rates of return, effective interest rates, and so forth. Because the key fact in financial analysis of solar power is that there's uncertainty, and that solar power isn't yet so cheap that you can be 100% certain it's cheaper than grid power.

Will solar power save you money? It depends. Installing solar power is like buying 25 years of electricity for a fixed price today. Whether that's a good deal depends on how fast the price of electricity goes up, what sort of rate plans the power companies invent in the future, and how long you plan to stay in your house among other things. Solar power has the potential to be a very good deal financially, but it might also turn out to be about the same price as the power company or possibly more expensive. The best we can say is that if things stay pretty much as they are today, solar power will probably turn out to be somewhat cheaper for most people over the long run.

In the financial sense, installing solar power is like any other business decision - you do your homework and research based on knowledge of the subject, take your best shot and you hope for the best, uncertainty and all. If most people looked at it that way when they buy, they'd fire themselves for incompetence. It's not like buying 25 years of anything. That's simplistic.

Similar uncertainty to buying solar applies to many major financial decisions. I guess the tolerance of ignorance can be explained and allowed by saying since nobody knows squat about anything financial it's OK to take advantage ?

Got any ideas or any thoughts on how to unintimidate the great unwashed masses or explain financial aspects to people so the poor dears don't get intimidated ?

[pleppik]

Having such information in no way limits one's choices. Solar can still be done even if a financial disaster. I did that very thing in Buffalo in 1983. It was a lifestyle choice and I'd do it again in much the same way in the same situation. BUT, I knew before I started that my $12K choice was not cost effective in any REALISTIC way I twisted the #'s. Pay your money, take your choice. The cost analysis police will not come and take you away. You'll at least walk in with your eyes open and maybe not be so surprised IF things do go south. Where's the harm or limits to freedom in that ?

I think most people approach the financial analysis side with one simple question: "Will it save me money?"

The problem is that while the question may be simple, the answer isn't necessarily simple. Sometimes the answer is clearly Yes, and sometimes the answer is clearly No, but at today's market rates for new solar installations and residential energy prices the answer is all to often "It depends."

Unfortunately, a lot of people aren't interested in any of the details beyond "it depends." I think there is probably a better way to explain the financial aspect so people don't get intimidated with discussion of internal rates of return, effective interest rates, and so forth. Because the key fact in financial analysis of solar power is that there's uncertainty, and that solar power isn't yet so cheap that you can be 100% certain it's cheaper than grid power.

Will solar power save you money? It depends. Installing solar power is like buying 25 years of electricity for a fixed price today. Whether that's a good deal depends on how fast the price of electricity goes up, what sort of rate plans the power companies invent in the future, and how long you plan to stay in your house among other things. Solar power has the potential to be a very good deal financially, but it might also turn out to be about the same price as the power company or possibly more expensive. The best we can say is that if things stay pretty much as they are today, solar power will probably turn out to be somewhat cheaper for most people over the long run.

[Sunking]

No money does not buy you happiness. It just makes it a whole lot easier.

[J.P.M.]

Money is simply our society's way of allocating resources and keeping track of obligations, nothing more and nothing less.

That makes it important, but not more important than many other things in life.

So put me in the camp which says that in any activity, including solar power and even life itself, finances are just once consideration among many, and often not the most important.

(Skip this post if you don't want a rant.)

Me too !

Financial considerations are indeed only one facet of reality, and while believing folks should set their own priorities and make their own choices, I would strongly say financial considerations are not my highest ones either.

BUT, depending on the situation, I also believe it's important to have some knowledge on ways to acquire realistic information (or guesses really until crystal balls are perfected) about the possible relative impact that lifestyle choices like solar can have on what are usually limited financial resources, if for no other reason than to put them in perspective. Being financially ignorant is not being environmentally smart. What you don't know can hurt you. I see it just about every day.

Sometimes I wonder if some solar advocates think financial analysis is the spawn of the devil himself because it sometimes reveals alternate energy scenarios to be cost INeffective or have a negative cash flow. I'm on their side, but the intransigent ignorance and transparent attempts at dismissing reality that I sometimes see from those folks doesn't help their cause.

Cost effectiveness is indeed only ONE of the things some people look for in solar. However, and as a practical reality, my experience is that it's usually the first and last consideration for many. "Screw the environment - I want a lower electric bill" is what I hear most often. So be it. It's a free country and I glory in that fact, to the extent it's true anyway.

IMO, having the rudiments of financial analysis helps to prioritize the solar decision among what are usually many competing priorities when considering ways to lower an electric bill. In such a situation, solar at some known (estimated) long term cost is a choice. Solar at some unknown, or fuzzy cost promoted by peddlers to financially ignorant people do alternate energy causes a lot of damage with lies and half truths. Some savvy about things like the time value of money, cost of funds, etc. can give the homeowner and prospective solar customer help in spotting the absolute crap they're often fed. I'd call that a good asset to have, particularly when someone is told it's cost effective to do something when a little knowledge would call such a claim to question, or spot the B.S. in a hot second, or enable one to see that some other action is more cost effective for the same $$'s.

Having such information in no way limits one's choices. Solar can still be done even if a financial disaster. I did that very thing in Buffalo in 1983. It was a lifestyle choice and I'd do it again in much the same way in the same situation. BUT, I knew before I started that my $12K choice was not cost effective in any REALISTIC way I twisted the #'s. Pay your money, take your choice. The cost analysis police will not come and take you away. You'll at least walk in with your eyes open and maybe not be so surprised IF things do go south. Where's the harm or limits to freedom in that ?

Spend a few hrs. learning something about how to determine cost effectiveness to potentially save thousands of $$'s. I like that payback.

I'd also like someone to explain to me the harm in suggesting people acquire more accurate information that helps separate the B.S. from the truth, or some other, hopefully better version of it, and in so doing help people make more informed choices.

I think I'm one of the biggest solar advocates anywhere. It's the reason I changed careers and became an engineer many yrs. ago. I believe I know a bit about the subject of solar energy. I want to see it work. Instead, what I usually see are ignorant people getting manipulated by others who take advantage of the self imposed and perpetuated ignorance. I do not see such situations as helping to make alternate energy a viable contribution the energy mix.

[pleppik]

And not to forget those who think solar, or maybe even life itself, shouldn't
be directly tied to finances. Bruce Roe

Money is simply our society's way of allocating resources and keeping track of obligations, nothing more and nothing less.

That makes it important, but not more important than many other things in life.

So put me in the camp which says that in any activity, including solar power and even life itself, finances are just once consideration among many, and often not the most important.

[bcroe]

And not to forget those who think solar, or maybe even life itself, shouldn't
be directly tied to finances. Bruce Roe

[Sunking]

One opinion I have is that every situation is different. Using sound, realistic, THOROUGH, commonly accepted methods of cost analysis, if someone shows me any method of acquiring or paying for and using a solar electric system that is more cost effective than some other method,

Well there is the root of the problem JPM. Only a very small percentage of the population have the ability to do that. They call them the 1% group. Otherwise the vast majority just go on emotions based on misinformation. Vast majority of the population is extremely easy to dupe and lead to slaughter.

[J.P.M.]

Sorry JPM, when you describe my outlook as simplistic and short-sighted ESPECIALLY when your claim is not backed up by one iota of evidence, IMHO that constitutes more than simply disagreeing with an opinion. In fact if you want simplistic, I'd suggest it's a better description of your opinion on leasing which if I understand it correctly is pretty much NO regardless of an individual's circumstances. Perhaps you can identify a specific instance on this forum where you actually advised someone that a solar lease might be a good option to pursue. In stark contrast, I have always maintained that there are circumstances wherein a lease can make sense for an individual but that they have to work out the numbers to really be sure. Furthermore, I have ALWAYS stated that folks should look to conservation and other low/no cost measures FIRST, and that solar PV won't make sense at all for those with some combination of low rates, low incentives, low consumption, etc. I have also ALWAYS argued that oversizing is NOT the best approach from a cost-effectiveness standpoint. Indeed, I walked the walk on the latter by installing a system that offsets only 2/3 of my total consumption but covers - just barely - ALL of my peak usage.

Opinions vary. In some areas we agree. Some not.

Do/see what you wish. I'd suggest if you were a bit more circumspect about my posts, rather than musing/intimating about my HOA relations, you might notice I've also stated on numerous occasions that I support peoples right to do what they want, whether I think it's a waste of resources or not. I only state opinions and try to give some of the reasons for those opinions. You also might notice that those reasons usually include some (iotas of) data, either cited as from others, or my own for support and usually with some reasons for my opinion(s), not as defense, but explanation (as in the discussion of array fouling (dirt) some months back). I then assume folks will take it or leave it or add comment/question/information. Either way, or anything in between, the goal is information. If you or anyone take disagreement as disrespect, so be it.

I believe I have written posts favorable to leasing under some conditions. Until I can root though my prior threads and find an instance where I suggested (I don't usually "recommend") leasing may be a viable alternative (but, BTW, never at the expense of more cost effective measures), this will need to suffice: I tried to do that with a leasing thread some time ago where I attempted some balance as to the pros and cons of both leasing and buying as I saw them in a way that attempted to give readers a smattering of goods/bads for each, with the (naïve ?) hope of generating some intelligent discussion. To me, it looked like you disagreed with my statements, presentation and logic, took my thread, which I believe I acknowledged as public information, and then twisted what I wrote and added to it, pretty much trampling my opinion and attempts at objectivity. The end result, IMO, was a slanted pitch by you for leasing. I expressed my concerns about your actions in this matter in a post to the thread and a PM, suggesting we just agree to disagree. What I did not state at the time was my opinion (more of a suspicion really) that your outlook seems parochial, and supportive of your (personal) decision to lease. I had hoped that would end the waste of time with our pissing match about leasing and put an end to it.

Ian, at the end of the day, I don't give a rat's patoot how people use their money. Absolutely none of my business. Not my time/life/money/house/whatever. I do cling to the dim hope that some of us listen to/read all opinions, have the brains and the sack to ask questions and challenge those opinions they disagree with, and also have an open mind and maybe more of a sack that is willing to adjust to new/better information as they see it when it comes along, and/or when they think it is in their best interests.

I also have opinions. Some of them strong. I purchased rather than leased. Some sincere and IMO, intelligent people are of the strong opinion that I wasted my money - big time for getting solar at all. I actually agree with some of the logic. I do not believe those people are being disrespectful to me because they think I made a moronic, bullheaded choice. Even if I thought them to be disrespectful, my attitude and skin are a bit thicker through scaring and mistakes than to take it personally. If I can't take the heat, I'll get out of the kitchen.

One opinion I have is that every situation is different. Using sound, realistic, THOROUGH, commonly accepted methods of cost analysis, if someone shows me any method of acquiring or paying for and using a solar electric system that is more cost effective than some other method, I'll support the more cost effective method be it leasing, buying, PPA, prepaid lease, whatever. BUT, only until all other (non solar) means of reducing a load have been considered in similarly appropriate ways. Not employed mind you - just thoroughly considered - it's still a free country.

I'll support someone's right to believe that it's cost effective to sleep in a wedding gown if that's their choice. Just don't expect me to agree with the opinion that it make financial sense without some valid, peer recognized supporting data and logic that it makes economic sense.

The last word is yours.

[silversaver]

I respectfully disagree with your methodology in figuring saving realized from E.V. acquisition. Most economic analyses take the actual situation and conditions into account as best as can be determined, not simplifying assumptions that may not be applicable.

VERY oversimplified and for illustrative purposes only:

Right now, subject to change, if I charge an E.V. on a separate meter at home, and have one eye and one balloon knot, I'll charge it for about $.17/kWhr. between midnight and 5 A.M., NOT the rate of the last (highest) kWhr. purchased, just like one of my neighbors does most nites.

I'd then look at the savings from using a different fuel source as in, using your #'s: $1,862.00 - ($.17/kWhr. X 3,820 kWhrs.) = $1,209/yr. SAVINGS.

Now, how much will it cost you to switch your current vehicle to an E.V., including acquisition costs for the new E.V. reduced by any ICE vehicle as trade in, plus any necessary home charging equipment additions, plus the incremental cost of adding enough solar capacity to generate an additional 3,820 kWhrs./yr. ?

Next: Project the net present worth of that $1,209 forward in time until you get to the # of years it takes for that net present worth sum to equal the sum of all those vehicle acquisition and changeover costs. That's a REAL back of the envelope SWAG at how long it will take for an E.V. to break even from a cost effective standpoint.

I'd do something like the above before I made my decision if only as a check on reality.

This still being a free country, I'd then do what I damn well pleased with my money and tell people who question my vision to kiss what they seem to think blocks it. But I'd do so with a bit more information and my eyes and brain open.

As far as building solar, the smart money does it because it's their best economic choice. The really smart money usually finds there are almost always better economic choices to keep you off the highest, or higher tiers before throwing expensive solar electric systems at bloated energy bills. Those who oversize without a prior reasoned, informed economic analysis of alternative uses of the assets needed may have vision. An alternate possibility is that they may be seeing things through rose colored glasses, or may have their vision partially blocked by their gluteus maximus.

I know you will disagree, because we have different source of information we based on.

1. I got good deal on my solar system which make my net generated cost per kWh low. I'm not plan on going T.O.U., standard tier will do just fine since I oversized my solar.

2. acquisition costs for the new E.V.? How about a simple 36 months 12k miles per year lease with $0 down. Drive off is about $420 (1st month and registration), the payment is about $70 per month tax included (after State $2500 incentive). That is for Smart Electric Drive lease. Good for communting with HOV sticker.

3. charger? I use the standard level 1 charger came with the car. Overnight charging is good for 48 miles round trip. If I need a level 2 charger, the charger is about $600 with another $500 labor.

Again, we are based on different informations we got and that make the differences. People make different choices.