When I was a kid, my parents made a bold move—they installed one of the early solar power systems on our house. The panels were bulky and unattractive, and unfortunately, they never delivered the savings or efficiency my parents had hoped for. Eventually, they removed the system altogether.

Fast forward to today, and solar technology has come a long way. Panels are sleeker, more efficient, and backed by improved financial incentives. With the recent advancements, we decided to install solar panels on our home in Florida. Now, we want to share the pros and cons of this sizable investment!

Pros: Why Solar Makes Financial & Environmental Sense

1. Major Financial Incentives

Thanks to the Inflation Reduction Act (IRA), tax credits for residential solar installations have increased. The Residential Clean Energy Credit covers 30% of the total system cost. Unlike a deduction, this is a dollar-for-dollar tax credit that reduces what you owe to the IRS.

For example, if your solar system costs $50,000, you would receive a $15,000 tax credit. Even better? If your tax liability is lower than the credit amount, you can roll over the unused credit to future tax years. Getting 30% off a major home investment is a strong incentive!

2. Solar Technology Is More Efficient Than Ever

Thanks to the Inflation Reduction Act (IRA), tax credits for residential solar installations have increased. The Residential Clean Energy Credit covers 30% of the total system cost. Unlike a deduction, this is a dollar-for-dollar tax credit that reduces what you owe to the IRS.

For example, if your solar system costs $50,000, you would receive a $15,000 tax credit. Even better? If your tax liability is lower than the credit amount, you can roll over the unused credit to future tax years. Getting 30% off a major home investment is a strong incentive!

3. Protection Against Energy Price Inflation

Fossil fuel costs continue to rise, and states powered primarily by natural gas and coal (like Florida) experience frequent price fluctuations. With solar, the energy you generate is immune to market inflation, stabilizing a portion of your energy costs.

4. A Greener Future

Regardless of politics, reducing carbon emissions is a step toward a cleaner future. Even in states with renewable energy sources like hydroelectric and nuclear power, fossil fuels still play a role in electricity generation. Solar helps decrease dependency on nonrenewable resources and lowers your overall carbon footprint.

Cons: Why Solar Isn’t for Everyone

1. High Upfront Costs

A solar power system can be as expensive as a new car—ranging from the cost of a Chevrolet Malibu to a Cadillac Escalade, depending on the system size and features.

To determine your break-even point, calculate:

• Total system cost
• Annual energy savings (based on your current kWh cost)
• Estimated payback period (divide system cost by annual savings)

Keep in mind that your savings increase as utility rates rise over time, but it still requires a long-term commitment to recoup the initial investment.

2. Home Resale Considerations

If you plan to sell your home, you may be required to pay off your solar loan before closing the sale. While solar can increase home value, it can also complicate the selling process if the system is financed.

3. Roof Replacement Costs

Solar panels typically last 25-30 years, but roofs don’t. If you need a roof replacement, your panels must be removed and reinstalled—adding to the cost. It’s best to install solar only on a newer roof to avoid early removal expenses.

Is Solar Right for You?

For our household, the numbers made sense. After installing our system in late February, we generated 106% of our energy needs within just a few weeks. Our tax credit reduced the system’s cost, and our monthly solar loan payment is less than our previous electricity bill—resulting in net savings.

If you’re considering solar, it’s essential to evaluate your financial goals, homeownership plans, and energy needs before making a decision. A financial planner can help assess whether this investment aligns with your long-term strategy.

For more information on how we can assist you please visit us at www.f5fp.com, or schedule a free consultation.