Why I Hate Payback!
Payback is an industrial profit-driven term used to buy machinery to meet rising sales. So, unless you are a machinery buyer for a business with rising sales, forget about what the payback on solar heating equipment is.
If anyone does offer to give you a payback number, immediately think of them as being disingenuous. No one knows what the future cost of energy is going to be.
For instance, if the cost of energy decreases, the payback will have to go up in the number of years it takes to save enough money to equal the cost of the device. If the cost of energy increases, it will be a less number of years.
Unless the future cost of energy remains static, any payback number would not be accurate.
Using the term payback in a home situation will never make sense. What in your home has a payback? Does your current heating equipment have a payback? How about the computer, telephone, refrigerator, stove, cupboards, tile floor, washing machine, granite counter top, fancified furniture, 100 inch plasma tv?!? Nothing in your house has a payback. You buy these items because you want them.
How about objects in the garage? Does your car have a payback? How about the boat, motorcycle, camper? No, none of these objects have a payback.
Solar heating equipment should not be held to a higher standard.
How about money in the bank? What is your payback on a Certificate of Deposit? The payback right now on money market rates are over 100 years! And be careful here, the FDIC is running low on funds in which to bail out failing banks. So just where is your money better positioned?
Another thing, if I told you a solar heating system has a payback of 10 years, your going to tell me how you might not even be alive that long. However, if I told you a solar heating system would give you a 10% return on investment, with an automatic escalator clause in following the price of energy upwards - you would think that a pretty sweet deal. Yes you would!
The real question you should ask yourself is; just where is my money really better invested?
That answer is simple; here in Wisconsin we cannot live without heat. The heat source most of us currently use is from burning fossil fuels - and it costs us money. Any efficiency measure and renewable energy device that lowers our consumption of fossil fuels should be considered an investment - as the amount of money saved can be calculated into a rate of return.
It is important we distinguish solar heating equipment from efficiency measures - that only lower fossil fuel consumption. Solar heating devices will actually lower fossil fuel consumption by producing heat!
For good measure, the rate of return
on solar heating equipment could include:
Protection from future energy cost increases.
Immediate return through incentives.
Asset appreciation
Warmth and comfort
Smaller carbon footprint
Energy independence
A cleaner environment for our children.
Lower our community's dependence on foriegn fuel sources.
Human capital - good feelings generated amongst aquaintances.
Societal capital - good feelings generated in society.
Self capital - you will feel good too.
These are all great benefits to own solar heating equipment.