Energy Investing

Profit From Solar Without Pricey Panels

Ten years ago, my wife and I decided to install solar panels to offset some of our electricity costs. The only problem was that the roof on our stone farmhouse – built in 1811 – is slate.

The last thing you want is installers walking on your slate roof because the slates can easily crack and break. So installing roof-mounted solar panels on a slate roof would have been a disaster.

We knew that if we wanted solar, we would have to go a different route. So we chose to install ground-mounted panels on our property.

Both types of panels have pros and cons, which I’ll get into.

But there’s another way to benefit from solar… without the hassle of any installation or construction.

Roof-Mounted Solar

Solar panels can be mounted on a home roof if the roof is not slate and its surface is south-facing.

But there are a few drawbacks to roof-mounted panels…

Installers generally mount panels within an inch or so of the roof’s surface. That prevents the airflow that would cool the panels. That’s a problem because the cooler the panels are, the more efficient they are.

And roof-mounted systems are anchored by drilling through the shingles into the plywood underneath. That means there’s a possibility of leaks.

When it comes time to replace a roof, the solar panels and their mounting hardware have to be removed. That can make a roof replacement very expensive.

However, there are solutions for homeowners who want to replace their old shingles with new ones and put solar panels on top. For example, Tesla (Nasdaq: TSLA) has developed shingles that are also solar panels.

They don’t look anything like the standard solar panels you see on many roofs today. In fact, these panels look like normal roof shingles.

Tesla claims that its Solar Roof is no more expensive than standard solar panels combined with the cost of replacing old shingles.

But Tesla’s Solar Roof is not yet available everywhere. If you can’t wait and have the room, there’s another option for mounting a solar array.

Ground-Mounted Solar

As many longtime readers know, my family lives on a farm in northeastern Pennsylvania. And we have plenty of room – 68 acres, to be exact.

So we chose to install ground-mounted solar panels instead of replacing our roof.

Image of solar panels

The installation of ground-mounted solar systems is a snap. Installers use a machine that screws big steel pipes 4 feet into the ground.

No concrete foundation is needed. Steel crossbars tie everything together. And the individual panels are mounted on aluminum tracks bolted to the steel frame.

It’s a system that goes together fast.

Plus, there’s a big advantage to ground-mounted solar. Installers can set the panels to the proper angle for maximum solar exposure.

This angle varies with location. And roof-mounted panels are rarely at the optimal angle.

However, a downside to ground-mounted panels is the price.

The steel support frame and the additional labor add to the overall cost of the installation. And some municipalities limit the square footage of a ground-mounted system.

Play the Sector

Today, the solar investment tax credit is 26%. This helps defer a significant portion of your system’s cost.

And although the tax credit is scheduled to be phased out completely in 2024, the current administration is hoping to extend it by an additional eight years.

You can do even better by investing in some of the public companies in the solar business. Even if you can’t install solar on your own home or property, you can still offset some or all of your electricity bill that way.

And there’s no easier way to play the sector than the Invesco Solar ETF (NYSE: TAN).

This exchange-traded fund (ETF) invests 90% of its assets in solar companies. The top 10 holdings make up 56% of the fund.

It includes well-known names in the solar sector, like Enphase Energy (Nasdaq: ENPH), SolarEdge Technologies (Nasdaq: SEDG), Sunrun (Nasdaq: RUN) and First Solar (Nasdaq: FSLR).

Over the past year, the Invesco Solar ETF has returned 63%. And its three-year return is 294%.

So it doesn’t matter whether you’re able to mount solar panels on your roof or in your backyard. You can participate in the sector’s upside with a simple investment.

Good investing,

Dave

Disclaimer: David Fessler owns shares of Tesla.

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