The solar panels that pay for themselves…

Michael Giberson

From the Texas Energy and Environment Blog, reports that in New Mexico “solar panels on homes can take as little as seven years to pay for themselves in energy savings.”  The post continues:

That’s faster than Texas, where even in the best economic case, solar panels take at least a decade to pay for themselves. New Mexico’s utility, PNM, offers several subsidies to bring down the cost of the installations for homeowners.


New Mexico remains regulated, meaning the government tells PNM how much it may charge customers and how much profit it may make. That means, if regulators want more solar, customers pay for it.

So, PNM offers two incentives. First, it offers so-called net metering. That means, when a solar customer generates more power than he can use, PNM buys that power back at retail rates, rather than wholesale rates. Second, under state law, renewable generators like solar panels get renewable energy credits. PNM buys those credits from solar customers at a price that’s about ten times higher than the market rate.

Ferland said these offers, along with state and federal subsidies, nearly make installing solar panels economic.

In [the Dallas, Texas area], our regulated power line utility, Oncor, offers some subsidies that have made solar panels more affordable. But the Oncor deal isn’t as sweet at he PNM offer.

Still, Oncor promised not to add the cost of those subsidies to customer rates. North Texans might not install as many solar panels as New Mexicans, but ratepayers don’t have to pay for it, either.

So wait a minute. Who is paying for those New Mexico solar panels?  From the quoted material it looks like other New Mexico ratepayers and state and federal taxpayers are paying for part of those solar panels.

Of course, federal and New Mexico state policymakers put ratepayers and taxpayers on the hook for a part of the solar panel costs because they believe that purchases of solar panels provide external public benefits.

I wonder how long before those external benefits accumulate in value sufficient to payback the investment made by ratepayers and taxpayers.  I don’t think it is reasonable to say that the solar panels have “paid for themselves” until after all of the initial investors – homeowner, utility, ratepayers, and taxpayers – have received a full return on their investment.

6 thoughts on “The solar panels that pay for themselves…

  1. “I don’t think it is reasonable to say that the solar panels have “paid for themselves” until after all of the initial investors – homeowner, utility, ratepayers, and taxpayers – have received a full return on their investment.”

    Amen, Brother! Such loose talk is how myths become popular “facts,” which can further shape public policy.

  2. Who gave you permission to take the blinders off and look at the whole picture? Shame on you!

    PNM’s approach does “solve” the “storage” problem, offering the utility as (actually better than) free storage.

    The economics of the “Holy Grail” of renewables, going off-grid, is still nearly prohibitively expensive, even with federal and state tax incentives and rebates. However, there are still those who persist in the search for the Holy Grail, regardless of the economics.

  3. Ed, I wasn’t the one taking the blinders off. The source post was pretty explicit on why the “solar payoff” was faster in New Mexico. The only difference is that the post followed standard practice of ignoring the costs to everyone other than the homeowner when talking about payoff.

    Obviously, folks will search for the Holy Grail regardless of the economics. Presumably, the searchers are not hoping to find it full of gold; the reward is elsewhere. I just wish they wouldn’t hijack the policy process to make us all pay for their religious quest.

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  6. What if there was a business that paid all the monthly payments for the solar unit of the house or business? Well, i’m in the process of doing just that. In the meantime take a look at, the site is not ready for business, but when i get the funding this problem will be solved.

    Thomas Adair

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