What do you use for your general algorithm for capital improvements that save money (such as solar energy & buying your own tanks)?
- solar
- wood-fired heating
- owning your own propane tanks etc.
For example, in another thread, I found out the propane company changed their prices such that the break-even point between buying my own propane tank versus renting it changed.
For example, for a 500 gallon tank, they charge $95/year and for a 1,000 gallon tank, they charge $120/year.
If both tanks cost $1,000 to own (there really is no maintenance to speak of for these things), then the break-even point is 10-1/2 years for the small tank, and 8-1/3 years for the bigger tank.
My general algorithm is roughly that anything around 5 years is a no brainer, and anything under about 10 years is a worthwhile deal (since I plan in dying in this house).
But, anything that has a payback of 15 to 20 years may not be a good deal, since I'm not gonna live much longer than that.
What's your payback algorithm for capital improvements such as solar energy (which costs about $50K but which starts saving money on day one, especially at high-tier rates of 50 cents per kWh).
Is it 5 years? 10? 20?