The Oil Drum

45 comments on A useful series on energy, and a Wish

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xironman on December 27, 2007 - 5:57am

Obviously, the ROI is going to be better if you pay cash, not finance with a home loan.

Not necessarily, if you have the cash in other investment vehicles you can use leverage for the solar investment and use the mortgage tax deduction to reduce the cost of borrowing. Especially if your ongoing investments are taxed at a capital gains tax rate for the most part. Meanwhile you have offloaded the currency devaluation risk to the lender, at a very low rate.

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ChrisN on December 27, 2007 - 8:47pm

True, but that is a more complex financial arrangement than most homeowners would contemplate. I was talking about a straight purchase consideration. Obviously, the more financially sophisticated and well-heeled one is, the more options there are, and the more opportunity there is to shift the risk onto another party...