We have a Nissan Leaf electric car and a solar energy system on our house, which we had installed shortly before getting the car. We got them together, for the purpose of generating the electricity to “fuel” the car (this is not literal: the electricity goes on the local electrical grid during the day, and later at night we take electricity off the grid to charge the car). I’m going to explain how in only three years our home solar will have paid for itself, and thereafter will save us many tens of thousands of dollars.
Our Leaf gets 3.25miles/KWH (12% better than the EPA estimate of 2.9miles/KWH): this is the total amount of electricity coming out of the wall needed to run the car. Your mileage may vary, but right now we are not talking about you, we are taking about my car and since I drive briskly let's use my actual numbers. This means that driving the national average of 12,000 miles a year we used about 3775 KWH. The portion of our home solar needed to cover the electricity for the Leaf cost us $9800: again, this is the actual cost we paid, not anything theoretical (the remaining portion of our home solar covers almost all our residential electrical needs).
Our previous car got about 22.5 MPG, which is the national average fuel economy: that means that we bought about 533 gallons of gasoline every year. The average cost of gas in our neighborhood this year is about $4.30/gallon, and so we would have spent about $2290 on fuel. The Automobile Association of America estimates that maintenance costs (ex: tune ups, oil changes, brakes, etc.: not including tires) is $.045/miles, or about $540 per year. (By contrast, there is virtually no maintenance required for an electric vehicle.) Therefore, our gasoline car would have cost us about $2830 to operate this year.
In three and a half years we would have spent $9905 for gas and maintenance (and here, your costs are probably about the same). This entirely covers the $9800 we paid for the home solar portion that covers the car. Thereafter, for every year, we are saving $2830 – and more, of course, as the cost of gas will only go up in the coming years. The home solar will last a guaranteed 25 years (and typically lasts much longer, albeit at a slightly reduced efficiency), and so our long-term savings in not having to buy gas and maintenance is over $60,000, and that’s not even accounting for compounding savings interest or rising gas prices. Of course, as gas prices rise, the savings are even greater.
But because solar-generated electricity doesn’t go directly into the electric car, the savings is even better due to “time of use metering.” Here I’m not talking about alternative-to-gasoline savings: I’m talking about the home solar system actually paying for itself in electrical savings compared to the cost of buying utility electricity (this is the conventional reason millions have installed home solar). Home solar generates electricity during the day, and this means that most of the electricity is sold back to the utility when there’s a great need for grid electricity, at an average cost of about $.20/KWH. Then, when we need to charge the car at night, we buy electricity off the grid when there’s an excess of grid electricity, at an average cost of about $.06/KWH. In a sense, we pocket the $.14/KWH difference, which fully pays for our home solar system over time (to be clear: the utility does not write us a check, but we get to pay far less for all the electricity we are actually using, even above the electricity we are using to charge the car). Typically, for homes without an electric car, home solar has a 10-year payback period. Interestingly, because our home was already energy efficient, home solar just for our home would not have made a great investment for us – but our home solar makes perfect sense for our combined home and car needs. Further, given the historical 7% annual increase in the cost of utility electricity, over the years we are saving more by profiting from a greater differential in time of use metering (buy low, sell even higher). The reality is that our home solar will be completely reimbursed even sooner and so the return on investment is even that much better.
As an investment, an electric car (our Leaf cost us $22,5000, approximately the same as a comparable car) and home solar results in a ridiculously positive return on investment. Indeed, if you put your $2830 annual fuel savings into a 5% compounding investment, after 22 years you’d have about $123,000! And that’s not even considering the increased savings as the cost of gas rises and as the cost of electricity rises. Seen in that light – as well as from the tremendously important (arguably, more important) 100% positive environmental, geo-political, and domestic employment perspectives – this plan is an ideal part of an investment portfolio.