I am considering taking a loan from my 401K to pay for a solar based electrical system.
Before you say HELL NO, hear me out...
- The house is paid off, ~$230K value, 2 floors (about 1500sqft each). It is all electric, no gas option. Currently $204/month for electricty (~2kwah/month -- yes, we use a lot of electricity, currently at about 11 cents/wah).
- $210K combined income. Combined retirements accounts are at about $800K.
The system being offered is $40K. Again, hear me out:
- new downstairs HVAC (22 SEER variable speed, the current 12SEER system is 10 years old and leaks) $15K
- radiant barrier $4K
- solar circulating fan $3K
- new water heater (ancient 5Kwah/year system replaced to like 1.2K) $4K
- foam spray the ducts $3K
- 10 solar panels (total 3Kw system) $11K
- installed, 25 year warranty on all of the above (including annual service checkup and web-based health monitoring)
[ so it's not just panels, but improved overall efficiency ]
Crazy prices for the DIY types, but again, hear me out: Trying to think of the positives...
- Texas energy prices will continue to rise (but same can be said about anywhere); the sooner system installed, sooner electricty savings take place [ hey, gotta have a way to charge my Tesla when I get one! ]
- The 30% tax credit expires Dec 2019 (then tapers down to 0 over the next 3 years). Because solar panels are involved, it applies to the entire $40K purchase (so, $12,000 credit).
- Increases home value? That might be subjective, as it could also increase property tax and insurance costs?
An obvious question is how long we plan to live at the house. Short answer is: 10-15 years (i.e. until daughter finishes college), longer answer is: maybe forever, since even if we move out, we still might keep it for rental (the property taxes are $5K/yr currently). In any case, the answer is not just a couple years.
My wife and I will be working for at least another 5 years; stable and good company. So say I pay myself back $700/month for 5 years -- I lose a hunk of equity up front ($40K out of $500K), but I'm buying back into the market again for a few years.
Alternatively, we could pull from taxable account. Just pay for the thing. then lose our future gains on that (which we would be taxed on anyway).
Thoughts? Any justification to this being an actual worthwhile "investment"?
Before you say HELL NO, hear me out...
- The house is paid off, ~$230K value, 2 floors (about 1500sqft each). It is all electric, no gas option. Currently $204/month for electricty (~2kwah/month -- yes, we use a lot of electricity, currently at about 11 cents/wah).
- $210K combined income. Combined retirements accounts are at about $800K.
The system being offered is $40K. Again, hear me out:
- new downstairs HVAC (22 SEER variable speed, the current 12SEER system is 10 years old and leaks) $15K
- radiant barrier $4K
- solar circulating fan $3K
- new water heater (ancient 5Kwah/year system replaced to like 1.2K) $4K
- foam spray the ducts $3K
- 10 solar panels (total 3Kw system) $11K
- installed, 25 year warranty on all of the above (including annual service checkup and web-based health monitoring)
[ so it's not just panels, but improved overall efficiency ]
Crazy prices for the DIY types, but again, hear me out: Trying to think of the positives...
- Texas energy prices will continue to rise (but same can be said about anywhere); the sooner system installed, sooner electricty savings take place [ hey, gotta have a way to charge my Tesla when I get one! ]
- The 30% tax credit expires Dec 2019 (then tapers down to 0 over the next 3 years). Because solar panels are involved, it applies to the entire $40K purchase (so, $12,000 credit).
- Increases home value? That might be subjective, as it could also increase property tax and insurance costs?
An obvious question is how long we plan to live at the house. Short answer is: 10-15 years (i.e. until daughter finishes college), longer answer is: maybe forever, since even if we move out, we still might keep it for rental (the property taxes are $5K/yr currently). In any case, the answer is not just a couple years.
My wife and I will be working for at least another 5 years; stable and good company. So say I pay myself back $700/month for 5 years -- I lose a hunk of equity up front ($40K out of $500K), but I'm buying back into the market again for a few years.
Alternatively, we could pull from taxable account. Just pay for the thing. then lose our future gains on that (which we would be taxed on anyway).
Thoughts? Any justification to this being an actual worthwhile "investment"?
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