Friday, March 16, 2012

The Cost of Living Off the Grid

Could you afford to live off the grid?
It’s estimated that more than a quarter of a million people have packed it up and headed for the hills over the last decade.

Once thought to be a lifestyle reserved just for the tinfoil hat crowd or the Amish, “living off the grid” is becoming more mainstream, as each year, thousands of Americans opt for energy independence.

Off-grid living, or homesteading as it is sometimes called, has come to mean different things depending on the motivation of the people who pursue it. The vast majority of these people are simply choosing to live a life of self-sustainability for environmental reasons, financial reasons, or to seek the protection of a solitary life.

But then, there are those who believe that black helicopters are swooping in on American citizens and that anarchy will prevail once the citizenry catches on.
How to Live Off the Grid

For all of these homesteaders, their first priority is to get off the electric grid and create their own renewable supply of energy. That is followed by the creation of a renewable water source and sustainable food source for total self reliance.

And, for the doomsday preppers and conspiracy enthusiasts who want to get totally off the grid, the ultimate step is to remove any and all links with identifying institutions including bank accounts, credit accounts, DMV, and even Social Security.

For now, we’ll limit this discussion to those who still feel the need to have access to an ATM or a valid driver’s license.

Across America, you can find millions of people who are attempting to reduce their exposure to the grid by reducing their energy consumption, planting gardens, and generally trying to live simpler and greener lives.
Living Off the Grid Isn’t Cheap

But, if you really want to get off the grid, it does require an almost uncommon commitment and the willingness to invest a good amount of money, which raises some questions that most people have about off-the-grid living: Is it financially viable?

What if you aren’t as wealthy as some well-know homesteaders, like Daryl Hannah (off the grid in Colorado) or Johnny Depp (off the grid on his own island in the Bahamas)? Does living off the grid also mean living watt-to-watt or radish-to-radish? Or can it pay off in the end?

Johnny Depp on his Island: “Theoretically, this place can add years to your life. Money doesn’t buy you happiness. But it buys you a big enough yacht to sail right up to it.”

Here’s the skinny on setting yourself up with a completely self-sufficient, self-sustaining life in the boonies:
Item Description Cost
Land with Unrestricted Building Codes (10 Acres) Remote locations in: Montana, Idaho, Oklahoma, North Dakota, Utah, etc. >$20,000
Energy Efficient Home (1500 sq feet) Wired and plumbed for low voltage use and water pipe heating. $100,000 to $250,000
Renewable Energy Source Wind, solar, geothermal, etc. (including battery storage and generators). $50,000
Sustainable Food Source ½ acre garden; 1 acre fruit trees, farming equipment; farm animals, food storage. $30,000
Renewable Water Source Well, rain collection, septic tank. $10,000
Total $380,000

That’s not a small amount for anyone, but assuming the cost of housing (land, development, and building) is factored into everyone’s budget anyway, we’re really looking at an additional investment of $90,000 for renewable energy, food, and water that must recovered.

In comparison, it would only cost the same household to pay around $10,000 to tie into the commercial grid.

The key to the investment return is the “sustainability and renew-ability” of these resources, because once the investment is made, there should be no further payments made towards those resources.

So, it comes down to the cost savings realized by not having to pay gas and electric bills, water bills, and grocery bills for as long as you remain in your homestead off the grid. What’s that for a family of four? $1000 to $1500 a month? That’s better than a 15 percent annual return.

Just with the electricity, if you consider the savings realized with no monthly bills, no power lines or grid link, and the federal tax credits available, the net cost or investment is close to zero. For the people who invest their heart and soul into self-sustained living, the psychic return is incalculable.

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