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The Scariest Word We Know

By Derek Girling

Solar Energy Consultant, HelioPower

There’s a word being batted around with increased frequency these days and it’s making me nervous. The last time it reared its ugly head in this country I had long hair, side burns and wore bell-bottom jeans.  Jerry Brown was the governor of California and Jimmy Carter had solar panels installed on the White House to address the “Energy Crisis!”

The word is INFLATION and anyone who remembers the 70’s experienced its devastating effect on the U.S. economy.  In Yearly-Inflation-Rate-Graph1980, prices rose on average 13.58%!*

During inflationary times, prices and costs rise in lockstep (wages, unfortunately, lag behind!).  Every month your paycheck gets squeezed tighter. Unless your returns are equal to or higher than the rate of inflation, the value of your savings actually gets smaller as it takes more money to cover the same expenses.  Many of us are nearing or in retirement now and can’t increase our income to offset our greater expenses.

So what’s the best strategy to deal with inflation before it starts running away?  Fix as many of your recurring monthly expenses now when prices are relatively low!

The first place to start is with a fixed rate mortgage.  Housing typically accounts for a homeowner’s greatest expense and a fixed rate mortgage at today’s low rates is the best hedge against inflation.

Installing a solar power system is another great way to fix your monthly electricity expense at a lower cost than you are currently paying.  This helps insulate you from higher than average electricity rate increases.  Programs like SunRun’s Solar Power Service allow you to fix your monthly electric costs typically below your current electric costs with no money down.  They even maintain and insure your system further protecting you from unexpected energy expenses down the road.

Homeowners with capital in reserve can save even more by taking advantage of prepaid plans or system purchases that virtually eliminate their current electric bill.  This delivers a positive net cash flow from the first month the solar system is commissioned.

Hopefully the direst inflationary predictions will not occur.  There are varied opinions as to the length and extent of this upcoming inflationary cycle.  However, even if we enter a short period of higher than normal inflation, going solar will easily save you tens of thousands of dollars (or more!) and provide certainty from one of the most important expenses you incur!

You can reach Derek Girling at [email protected].

*Source – U.S. Bureau of Labor Statistics 1914-present