Monday, August 18, 2014

The Concept of Economic Break-Evens.

" He is OK. He has a Hot Dog and Fire. "

 Howdy Doody and all that!

For some reason today, I have been pondering over the concept of economic break-even.

Mr. P and I were strolling about the yard. In my hand was a three prong garden pick/fork. Staring out into mountainous oblivion. Cat following happily behind me. Laying down in the shade created by my silhouette when I would stop to ponder again. 

Normally when folks make big purchases they attempt to see if it makes sense fiscally. Say, in the case of Solar electricity setups. The question is, why would I spend all that money. I can pay for a lot of KWH with that. It would take forever to pay it off. Would it ever break even or more importantly, make me money?

For my very specific instance. The cost (@$7500USD) already broke even with the decision of not paying the local utility to install a pole and run a line. In that circumstance, I would have paid a small fortune and not have anything physical to show for it. (That is, the ownership of panels, inverters, controllers, batteries, as well as 'owning' the future well-being of my own person with power-security)  This is a good thing because if you recall, I do not use a lot of electricity in my day to day life unless I go out of my way to use the 'excess' potential of the system during the day. To date, in over a year, I have used 1100KWH or around 2.5kwh per day. At roughly 12 cents per unit, if I already had access to the grid, it would have cost me $132USD. If I used the entire daily average potential of the solar system it would have come up to $438 (3650kwh) (Omitting all the other service and bogus tax charges or different tiers)

You can easily see my weird situation. I broke even by needing/wanting access to electricity and opting to not pay for a power pole to connect to. In the process I 'saved' money over that choice AND I get ownership of tangible items. I quote 'Save' because that as well is an abstract thought. How does one save money when they are shelling out $7500?? You have to understand that I am very confused when someone is elated that they 'Saved' 50% on some purchase when it is a BOGO item or the like. My immediate thought is how much money I 'Saved' by simply not purchasing ANYTHING at all. Ha!

Was it a wise decision to purchase land. Go off-grid. Purchase Solar. Live in a Tiny House.  

Let us break it down a bit. (Über-duper cost analysis below)

I am about in for around $21,000USD.

$8500 for a couple acres, $7500 for electricity when you figure the mountings and misc, the rest is building material costs between the two buildings. The original one on concrete piers and the one thereafter on a wheeled base. (I think I can finish it all up for an additional $2000) 

Was I crazy to spend all that money and live in a tent for 10 months all over the US to accomplish it. 

If I were to sell this place, no one could get a bank loan for anything other than basically raw land (unimproved) with an out-building or two. Shed's basically. Plus One mighty fine wheeled utility trailer. (I guess I am the Toy in this hauler) 

Hmm. Doesn't sound very good for building equity. 

WAIT. OK. If I was living in an apartment I would most likely be spending around $700 a month. $21,000 divided into $700 comes out to 30 months. All things equal, if I make 30 months here, then I 'break even' on cost for cost. But. No. At the 30 month mark I would have spent the same in rent as doing all this, however, I still have land and solar and some mighty fine outbuildings. 

Toss in $50 bucks a month in Electricity or so (300kwh) that cuts off $600 bucks a year. Bringing me closer to the parity between the two choices (Me living here or renting in the city) of around two years. 

This whole thing tells me that after two years, even if I walked away, never made a dime on it. Say, transferred it to a homeless person or family for a dollar, I would be no worse off than if I had rented in the big city. All without making a dime. 

So, when you think about the validity of homes on wheels and whether tiny houses make any long term fiscal sense... it behooves you to think further. Yes. There are those Tiny Houses in which people put $50 grand in them. Material choices and costs vary wildly! Pick what appeals to you. Regardless they will never be a $500 70s travel trailer as some YouTube commenter would tell you. They really are miniature houses. 

According to the county assessor, this land is already worth about $13,000. 

The solar panels are guaranteed out to 25-30 years. At which, they are supposed to still produce 80% of rated. 1600 watts worth after 30 years. It's doubtful that I have not increased it in size for an electric car and bigger house with larger loads or simply move to electric heating exclusively (just because I can). The thought is that you replace your inverter every 15 years or so. (Converts battery Direct current into Alternating in order to power normal things that plug in the wall) Right now, if prices remained, I would have to shell out $1800 for a new one. (This is a top line with the highest wattage Outback makes. To get bigger, you have to hook additional ones together. 48 volt/3600 watt constant/5400 for 20 minutes/ 7000 for a couple seconds.) In 10-15 years I probably will have to replace batteries as well. 

Another year of living the semi-retired Hobo life and I will have broke even. 

What are your thoughts and take on it all? Could you see the worth in purchasing something even knowing that it isn't going to be able to be sold later, but over all, the ability of using it to offset the very costly choices you would have made in its place, makes you money.

- Cloud

// The Trailer's main floor/living is 12'x14' (168SF). The Upstairs Loft is 12'x8' (96SF). 264SF Total //

Total INV





Land 2.88 acre





Panels–250w 8 $221.77 $1,774.16

Charge Cntr 1 $659.00 $659.00

Inverter 1 $1,877.43 $1,877.43

Lightning Arr 1 $95.81 $95.81

Combiner bx 1 $144.25 $144.25

Batteries 16 $149.00 $2,500.16 $116.16






Tiny House
Trailer 1 $800.00 $800.00

Fl/wall Spply 1 $591.75 $591.75

Roof/supply 1 $1,149.33 $1,149.33

Screws 1 $22.29 $22.29

Fireplace/Vnt 1 $175.00 $175.00

Door Material 1 $73.26 $73.26

Insltn-Paint 1 $480.50 $480.50

Clk-pnt-stpls 1 $17.26 $17.26

Windows 2 $88.96 $183.08

Cork Floor













  1. I think it's great that you can and chose to take a break for as long as you can from the work everyday life everyone else does. Working everyday only pays the ever increasing bills which normally just barely matches the income.

    A couple years from now you'll probably have everything finished, the tiny house, gazebo with hot tube, power shed and a great garden. Since you're on a highway with some traffic you could raise and sell vegetables from your front porch. Great way to make money, pull up a lawn chair have a cooler filled with some home brew and watch tomatoes grow! :-)

    1. Ha! Great idea! I have been thinking about replacing the fencing from metal post and barb wire to one of Wooden post and either slat, lattice, or picket. How great would it be to install along the fence line a little Fruit/Veg stand built in. Between that 'kiosk' and the chosen colors of the Tiny House... I really would feel like I am in FL.

  2. One thing you left out of the concept of economic break-even was your labor. You were able to provide the needed labor because you did not need to work while you were building. That made the entire project possible. Your willingness to make due without all the comforts of an apartment and other "necessary comforts" to save the money was the idea that kicked off the entire project. Those human choices will make your life better than any millionair in this country. Your stress level is down, your exersize level is up. I think your enjoyment of life is at a very high level. Those things are priceless. There are so few people in the world that live a well thought out life. You have am almost endless number of paths to choose for the future. I am very sure your attatude of being happy with the things you need and not being caught up with all the things that the tv tells you that you have to have will serve you well through out your life.

    Have fun my friend

    1. Exactly, Frank. In essence, I paid myself with labor. There is going to always be a labor cost component. If you can do it yourself, assuming your time isn't worth an astronomical amount per hour doing something else, then it is worth doing.

      How is Virginia these days??

  3. It's not just break-even point that counts - you did something that made your life the way you like it and in some way it's worth more than just renting a place. We also invested in solar and back up generator to get off the grid. It cost nearly 30K, but in our mind it was worth every penny. Because when the Sandy hit and knocked out power for a week, we still had our electricity, which in turn gave us water (pumped from well) and all appliances without interruption. I do wish we could downsize to much smaller home, but the idea of self-sufficiency is definitely worth it in our life.

    1. I agree, Jenny. When I was living in Ann Arbor, we had lost power for about a week or so. Wish I had solar sooner. :) Now that we have the equipment, we can opt to take it with us anywhere.