[bongobingo]

Opportunity cost is simple. It’s a calculation of what your money could have been doing if you put it to use doing something else. The easiest to estimate is the market opportunity cost.

If you spend $10,000 on a solar installation that is $10,000 you could have put in the market. After 15 years you saved $10,000 in electricity, and you’re supposedly profiting. However, that $10,000 investment would have grown to $24,000 at a modest 6%. So you’re actually still in the red, and you’ll likely never catch up and break even.

If you took out a loan it’s the opportunity cost on the payments. There is actually a theoretical break even here, but it’s not 15 years.

If you’re doing it for some altruistic reasons then it doesn’t matter. But if you’re making a payback calculation, you should do it properly. Opportunity cost is a real thing.