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Old 07-13-2017, 03:28 AM
 
1,581 posts, read 2,085,335 times
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Quote:
Originally Posted by terracore View Post

"Unless you own a million-dollar home, the mortgage interest tax deduction won't save you much on your taxes."
This may rank in the top 10 most ridiculous statements I've read on CDF in over 10 years.
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Old 07-14-2017, 10:41 PM
 
Location: Puna, Hawaii
4,370 posts, read 4,790,158 times
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I guess I just never bought into the debt-slave system. I'd rather have a sub-$1000/mortgage than flush $1000/month worth of interest payments each month into the financial toilet. Your house is probably much better than mine. We're both happy, so problem solved. Except that one of us is getting a tax deduction that the other is not getting. Maybe even paying for.
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Old 07-14-2017, 11:21 PM
 
Location: Kahala
12,120 posts, read 17,743,758 times
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Quote:
Originally Posted by terracore View Post
I guess I just never bought into the debt-slave system. I'd rather have a sub-$1000/mortgage than flush $1000/month worth of interest payments each month into the financial toilet. Your house is probably much better than mine. We're both happy, so problem solved.
I'll take the high road and say happy is most important.

I'll say alternativly interest is your friend especially with today's still low rates (and dedications). Housing appreciation over the long run has always exceeded interest debt in Hawaii if you buy and keep. (Of course if you trash your property or overrun by a hurricane or lava not so much).
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Old 07-16-2017, 07:38 PM
 
Location: Los Angeles area
189 posts, read 257,641 times
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Quote:
Originally Posted by whtviper1 View Post
This is getting silly. A $400,000 traditional mortgage is going to have over $1,000/month in interest per month. I don't even need a calculator for that. A couple with a modest dual income and not anywhere being millionaires can afford that.

Sigh. I looked it up. A dual income $50k (roughly a median income) each earner can get that mortgage....
Dude, you are talking with a Puna resident....of course they most likely won't have a 400k mortgage. You should visit sometimes.


I see some silly arguments against solar on here which I simply don't understand. If someone wants to give you money why the hell would you not take it?! Solar where net metering is available is such of a no brainer. Even without net metering, considering the high price you pay in HI, solar could still be worth it.

Imagine you make an investment of $14k which you will fully recover its principal in 7 years and 20 years after that you keep receiving a dividend of about 10% annually. Would you take this deal? That is exactly my situation here in CA....when i did the math i could not believe it.
I simply don't get why people have such of hard time making the right financial long term decisions. Is it because you hate or don't understand math?
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Old 07-16-2017, 07:54 PM
 
Location: Kahala
12,120 posts, read 17,743,758 times
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Quote:
Originally Posted by Mark.ca View Post
Dude, you are talking with a Puna resident....of course they most likely won't have a 400k mortgage. You should visit sometimes.

Visited 100+ times for work (literally). There isn't a lack of $400,000+ housing as well as dilapidated shacks.

Regardless, my point was you don't have to be anywhere near a "millionaire " or have a million dollar place to take advantage of mortgage deductions. As I said, just off the top of my head a $400,000 mortgage (and in reality it is less) can be taken advantage of people with modest incomes.
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Old 07-16-2017, 11:49 PM
 
Location: Moku Nui, Hawaii
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Doesn't even really matter if there are tax credits or not, though, if you do the math. Figure an electric bill of $220, that's probably pretty close to what a lot of folks pay. Some probably pay more, some less, but just start with that as a number. After the big solar system is installed, the electric bill then becomes $20 a month instead of $220. So, they save $200 a month. Just for another round number, use $20K as the PV system cost. So at $200 a month, it will take 8.3 years to pay for itself. That doesn't include any tax deductions at all. I've still got a solar panel from 1982 (35 years) that is still working great, I expect the big rooftop solar to function at least as long as that if not longer. So even if it's a ten year pay back time, that'd still be fifteen years of almost free electricity.

With the tax incentives that added up to about 50% savings on installed costs, our payback is just over four years. There's a big system on the rental house so we are able to rent it for more since the electricity is included as part of the rent. So that one is even paying us back in cash equivalents. What's not to like?
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Old 07-17-2017, 06:24 PM
 
1,581 posts, read 2,085,335 times
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Quote:
Originally Posted by terracore View Post
I guess I just never bought into the debt-slave system. I'd rather have a sub-$1000/mortgage than flush $1000/month worth of interest payments each month into the financial toilet. Your house is probably much better than mine. We're both happy, so problem solved. Except that one of us is getting a tax deduction that the other is not getting. Maybe even paying for.
There are many working and middle class folks on Oahu that have benefited nicely from the interest tax deduction; the vast majority of them do not own "million dollar" homes. In fact, the very existence of the tax deduction allowed a good number of these people to afford their first-time home purchase here on Oahu.

The only reason your home in Puna and quality of life even exists today is because of the countless supporting infrastructure that is provided to you 200 miles away. If high-priced Oahu and all the "debt-slaves" didn't exist, you wouldn't be posting here on this forum from Puna.
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Old 07-17-2017, 06:39 PM
 
1,581 posts, read 2,085,335 times
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Quote:
Originally Posted by hotzcatz View Post
Doesn't even really matter if there are tax credits or not, though, if you do the math. Figure an electric bill of $220, that's probably pretty close to what a lot of folks pay. Some probably pay more, some less, but just start with that as a number. After the big solar system is installed, the electric bill then becomes $20 a month instead of $220. So, they save $200 a month. Just for another round number, use $20K as the PV system cost. So at $200 a month, it will take 8.3 years to pay for itself. That doesn't include any tax deductions at all. I've still got a solar panel from 1982 (35 years) that is still working great, I expect the big rooftop solar to function at least as long as that if not longer. So even if it's a ten year pay back time, that'd still be fifteen years of almost free electricity.

With the tax incentives that added up to about 50% savings on installed costs, our payback is just over four years. There's a big system on the rental house so we are able to rent it for more since the electricity is included as part of the rent. So that one is even paying us back in cash equivalents. What's not to like?
Very few people would make a significant investment in something that takes 8+ years to pay back. If you disagree... think about how very few people bought LED bulbs or CFL's (back in the day) when they were sporting 2-year paybacks. You need to reduce it to a <1 year before the majority of people even bother going to the store. Now bulbs are virtually free and still not everyone has made the switch. For me, 8-year PV payback would still be worth it... but I see value in having PV outside of just the $$ savings - the average person only cares about the payback.

A <5 year payback would likely be necessary for the average person to justify such a significant investment and tax credits are necessary today to make that pencil. And now that HECO has eliminated the NEM program, batteries are needed... increasing the payback to over 10 years with batteries (with no credit). Without NEM and tax credits, the solar industry will collapse entirely leaving tens of thousands of people with broken PV systems (they all fail eventually) and very few left to service and warranty them. It's in the best interest of the state and all existing PV customers to maintain credits to at the very least keep installation momentum (year-over-year) static.
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Old 07-17-2017, 08:13 PM
 
2,095 posts, read 1,539,301 times
Reputation: 2300
^


Well that estimate was without any tax credits. I think BEFORE the tax credits were over 50% of the cost. It was something like 40% fed 30% state. so 20k *.6 * .7 = 8.4k homeowner cost. So the payback would definitely be less than 5 years.


NOW the numbers probably don't pencil with the battery system UNLESS you're also doing it to be better prepared for emergency. BUT if a hurricane hits, it'll likely destroy your PV, so you're better off with a generator in emergencies.
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Old 07-17-2017, 09:03 PM
 
1,581 posts, read 2,085,335 times
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It is more than 5 years to payback a NEM system (no batteries) with NO credits. The credits are 35% state (capped at $5K per 5kW) and 30% fed. The 35% actually ended up being closer to 20-25% for most people (NEM systems ONLY) because of the $5k cap. So a little more than half would generally come back in credits... but then you would have to pay federal income tax on the state credit... therefore further reducing the value depending on your fed tax bracket. All in all, you get back about 40-45 cents on each dollar spent on a PV system with both credits in place. All said and done, most people would see their NEM PV systems pay off in about 4 years with both credits in place (and full utilization of credits). Without the credits in place, it's about 7 years average. Longer if you live in the back of Manoa Valley... and shorter if you live in Ewa Beach. I am talking Oahu rates here (which run about 26 cents/kWh); rates are higher on outer islands therefore a shorter payback.

But this is all irrelevant now because NEM is dead and batteries are necessary (and state credits don't currently apply to batteries). Currently, with the current tax credit structure, you would be looking at about 40 cents on each dollar spent back in credits. Still not bad but considering how expensive batteries are and how much more the overall system cost is (compared to no battery systems), you would be looking at 6-7 years for payback with credits... and 10+ with no credits.
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