Solar Investment vs Stock Market is one of the most common questions we hear at Advanced Energy Systems: “Where is the best place to invest my money—solar energy or the stock market?” This is an important question for homeowners who want to maximize their financial returns and make smart decisions about turning necessary expenses—like electricity bills—into long-term assets.
In this article, we’ll compare investing in solar energy versus financial markets, using the average cost of a solar energy system—$23,000—as our example. We’ll explore how solar can transform your electricity costs into a stable, long-term investment while considering traditional market investments’ potential risks and rewards.
Why This Question Matters
For Oregon homeowners, Solar Investment vs Stock Market decisions are increasingly significant. Electricity costs have been rising steadily over recent years. Portland General Electric (PGE) has implemented a series of rate increases. These include 11% in 2022, 7% in 2023, and 18% in 2024—the largest hike in over two decades¹. This trend has left many homeowners searching for ways to stabilize their energy expenses.
At the same time, the stock market is known for its potential to generate significant long-term returns, making it an appealing alternative. Deciding between these two options requires understanding each investment’s financial outcomes, stability, and broader implications.
Breaking Down the Comparison
- What Are the Financial Returns of Solar Energy?
- Electricity Savings: Installing solar panels can eliminate a $115/month electricity bill, potentially saving $130,000 over 30 years. This estimate is based on a 7% annual increase in electricity costs². Solar still provides significant savings even at a more conservative 3% increase.
- Payback Period: On average, solar systems pay for themselves within 11 years, leaving nearly 20 years of additional savings².
- System Degradation and Maintenance: Solar panels degrade at an average rate of 0.5% per year, resulting in about 10% efficiency loss over 20 years³. Additionally, batteries and inverters—key components of solar systems—typically require replacement within 5–15 years and 10–20 years, respectively. Replacement costs range from $1,500 to $4,000⁴.
- How Does the Stock Market Compare?
- Projected Returns: A $23,000 investment in the stock market, assuming a 6% annual growth rate, could grow to $132,000 over 30 years².
- Ongoing Costs: Without solar, homeowners would still face electricity expenses. These could amount to approximately $130,000 over 30 years with a 7% annual increase².
- Market Risks: While the stock market offers high growth potential, it is subject to volatility. This makes long-term returns less predictable compared to the stability of solar savings.
Other Considerations
Net Metering Benefits in Oregon
Oregon’s net metering policies provide substantial advantages for solar homeowners. These policies allow homeowners to receive credits for the excess energy they generate. These credits can offset electricity costs during winter months⁵. Any surplus energy produced by your solar panels can be returned to the grid. This earns you credits that reduce your overall electricity bill. Net metering effectively turns your solar system into a financial asset, enhancing your solar energy system’s return on investment (ROI).
However, Portland General Electric (PGE) has proposed reducing the value of these credits by 20–30%, which could significantly impact future savings⁵. This proposed reduction means that homeowners may receive fewer credits for the excess energy they generate. This could potentially increase their electricity expenses in the long term. It’s essential to stay informed about these policy changes and understand how they might affect your solar investment.
Additionally, Oregon’s net metering policies are designed to encourage the adoption of renewable energy by providing financial incentives. These incentives help lower energy costs and contribute to environmental sustainability by promoting clean energy sources. Despite the proposed changes, net metering remains a valuable component of solar investment strategies, balancing financial returns and energy independence.
Solar Investment vs Stock Market – Making the Right Choice
Solar Investment vs the Stock Market is profoundly personal at Advanced Energy Systems. It depends on your financial priorities and long-term goals. While it’s true that financial markets have historically offered the potential for higher returns, they also come with more significant risks. These risks are due to the inherent volatility of the markets. In contrast, investing in solar energy provides predictable savings, long-term stability, and energy independence.
One crucial factor to consider is that the money you invest in a solar energy system is essentially the same money you would otherwise spend on electricity. If you didn’t have solar, you’d spend that money on electricity bills. With solar, you’re turning a necessary expense into a financial asset. This asset pays for itself over time and delivers returns in the form of reduced or eliminated energy bills. This transforms your electricity costs from a recurring liability into a long-term investment in your home and financial future.
Ultimately, the decision comes down to what matters most to you: maximizing financial returns with some risk or achieving stability, sustainability, and savings with solar energy. If you’re ready to take the next step, contact us today for a personalized consultation. Let us help you decide what benefits your wallet and the planet.
References
- Green Ridge Solar. (2024). Portland General Electric (PGE) rate increase 2025. Retrieved from https://greenridgesolar.com/portland-general-electric-pge-rate-increase-2025/
- SaveOnEnergy. (2024). How to calculate electricity bill increases. Retrieved from https://saveonenergy.com/resources/energy-consumption/
- National Renewable Energy Laboratory (NREL). (2024). Solar panel degradation rates. Retrieved from https://www.nrel.gov/state-local-tribal/blog/posts/stat-faqs-part2-lifetime-of-pv-panels.html
- SolarReviews. (2024). Solar battery and inverter costs and lifespans. Retrieved from https://www.solarreviews.com/solar-panel-cost
- Green Ridge Solar. (2024). Net metering policies and solar incentives in Oregon. Retrieved from https://greenridgesolar.com/pge-plans-to-reduce-net-metering-solar-incentives/
