8 cases when solar might be a bad investment

Solar is great for a lot of homeowners, but there are some situations where you might want to invest your money elsewhere.

— by The Solar Nerd — About a 13 minute read.

If you read the last article, you know there’s a lot of great reasons to go solar. But there are definitely some situations where rooftop solar just isn’t going to work out. Maybe your roof isn’t suitable, your climate is poor, there are few or no incentives in your area, or there are anti-solar interests in your state working to roll back net metering or solar incentives.

While The Solar Nerd website is obviously all about solar advocacy, for solar to have a strong future it’s important that people who do chose solar are happy with their decision. To help you make an objective decision, this is a list of eight reasons why solar might not work out for you.

Reason 1: You don’t own your home

As a tenant, generally it’s a bad idea to hire a bunch of people to install things on the roof without asking your landlord first. If you’re renting a home, here’s what we suggest: use our cost calculator to get a quick estimate of whether your home might be a good candidate for solar.

If the calculator shows a decent payback period - say, 10 years or less - then have a conversation with your landlord, talk with them about the environmental benefits of solar, and show them the numbers.

As a renter, you’re either paying the utilities yourself, or your landlord is and including it in the rent. If you can demonstrate a strong payback period for solar, you can make the case that the property becomes more attractive to renters with a reduced or even zero dollar monthly utility bill. That’s a pretty competitive selling point they’ll have over other landlords in the area. Landlords want to make sure that there are few or no months where their property is sitting empty, so any advantage they can gain over their competition makes for a strong financial argument.

Also, it lets them advertise their property as a solar home, which has appeal to environmentally-minded renters.

If it turns out that the home you’re renting doesn’t work for solar, or your landlord isn’t swayed by your arguments, you’re still not out of luck. You can still explore community solar.

Reason 2: Your roof needs a replacement soon

If you have solar and your roof needs a major repair, you have to uninstall and then reinstall your solar panels. The solar company will come to disconnect all the wiring, remove the panels and racking hardware, and store them offsite. When the roof is repaired, they need to make a second visit to reinstall and reconnect the system. This can be expensive - in the range of a couple thousand dollars - so it’s a cost you definitely want to avoid.

A solar photovoltaic system will last 25 years or more, while warranties for a new roof range from 20 to 50 years. If your roof is relatively new and is in good condition, then you should feel confident about mounting a PV system to it. In fact, photovoltaics can actually prolong the life of the roof underneath by shading it from the sun and elements.

Unless there’s obvious degradation, it’s hard to tell how much life your roof has left by visually inspecting it from the ground. If you’re not certain how old it is, we definitely recommend getting a professional roofer to perform an inspection, which many will do for free.

If your roof has only a few years left, then it’s best to wait until you can do a roof replacement and solar installation at the same time.

It’s the grey area inbetween that is tricky. What if your roof is middle aged, with about 10 years of life left? That’s a trickier call. There may be things that can be done to extend the life of the roof - for example, replacing or repairing worn shingles. You may even consider re-roofing only the part of the roof that will be underneath the solar panels, although that will be more costly on a per-square foot basis than simply replacing the entire roof.

Remember that the roof underneath the panels won’t be visible, so you don’t have to worry about it looking strange to have a section of new shingles beside older ones. Again, it’s best to consult with a professional roofer to see what they recommend.

And when you’re interviewing solar installers, ask them how much they charge to uninstall and reinstall the system.

Reason 3: You have too much shade on your roof

If you’ve tried our solar cost calculator, you’ll learn that shade on your roof can have a major negative impact on how much energy your system produces. Almost everyone has some shade on their roof, whether it’s trees and buildings casting shadows early or late in the day, or even from your chimney or other parts of your own roof. But if your roof is heavily shaded, then a PV system might not be able to produce enough electricity to pay for itself, even if you live in a very sunny part of the country.

Photo of an abandoned cabin.
Nice cabin you got there, but the angles on the roof and all the trees means that it’s not the best for solar.

Sometimes, shading is something you can control - for example, by trimming back trees on your property. Often it’s not. For example, if your roof has multiple gables, the roof may cast shadows on itself, and there’s not much you can do about that. Or, there might be mature trees on your neighbors property that can’t be trimmed.

If that’s the case, there’s one option you could explore: ground-mounted solar. If you have room in your backyard, solar can be installed on aluminum scaffolding or a pole mounted rig. If you go this route, you will normally need a geotechnical inspection to make sure that the weight of the panels and ground mount can be properly supported and that the structure will hold up in high winds.

The same caveat about shade applies to ground mounted solar. You need to check that it’s sunny enough and doesn’t have too many obstructions that will cast shadows during the day. But if it is feasible, this can be a great option for people who don’t have a suitable roof.

Reason 4: You haven’t done energy efficiency upgrades yet

It doesn’t really make much sense to put solar on your roof if you haven’t taken care of inexpensive energy efficiency fixes first. Be sure to read the first article in this series for a few ideas that are cheap to tackle.

In general, energy efficiency is the most cost-effective thing you can do to save energy and reduce your carbon footprint. Plugging air gaps, making sure your ducts are insulated and leak-free, and adding insulation to your attic are easy to do and have short payback periods.

Blowing cellulose insulation into your walls is a little more complicated but it can also be a DIY job. You’ll need an energy auditor with an infrared camera to first identify what’s already in the walls.

photo of a old houseNice south-facing roof, but we would recommend doing some energy efficiency upgrades before adding solar. (credit)

Once you’ve picked the low hanging fruit of easy energy upgrades, that’s a good time to start thinking about solar. Photovoltaics can have a better payback period than deep energy retrofits, especially big ticket items like replacement windows. Unless your windows look like the house above, replacement windows may actually never save enough energy to pay for themselves - one energy consultant estimates that window replacement may have a financial payback period as long as 200 to 300 years.

So, take care of that hole in your attic first, and then come back here to find a solar installer.

Reason 5: You live in an area with poor solar potential and cheap electricity

Solar can work in a surprising number of places in the US. How far north you are is less important than the weather patterns in your area, which can vary significantly within the same state. For example, take a look at this map of solar radiation for Washington state from the National Renewable Energy Laboratory. On the west coast where it’s famously grey and rainy, the solar potential is among the lowest in the country, so photovoltaics aren’t going to perform very well.

But if you go just a couple hundred miles east into the rain shadow of the Cascade mountain range, the solar potential is much higher - near average for the United States. That means if you live in Yakima, Washington, even though it is one of the most northerly cities in the continental US, your photovoltaic system would perform much better than it would in Aberdeen, Washington.

Unfortunately, also working against solar in Washington state is the availability of cheap and clean hydroelectric power. This combination of low solar radiation - at least in the coastal areas - and cheap low-carbon electricity means that solar in Washington has a longer payback period than in other parts of the country.

This website provides a number of resources to help you find out if solar might be a good choice for you. In addition to the calculator, we’ve put together some one-page reports that make it easy to see at a glance some important variables you can use to make your decision about solar. These include the solar radiation, what others in your city have paid for solar, the current and historical electricity prices, and how polluting the electricity sources in your state are.

We’ve created reports for the hundreds of cities in the US that have a sizeable residential solar presence. Use the link below to find your city.

Solar Nerd city-by-city report: https://www.thesolarnerd.com/city-report/

You can explore the NREL solar resource map for the rest of the US here: https://www.nrel.gov/gis/solar.html

Reason 6: You don’t have net metering

If you haven’t read our guide on net metering, go do that now. Having a net metering policy in your state makes it significantly easier to recoup your financial investment in solar. While a majority of states in the US do offer net metering, not every one does. Also, even if your state mandates net metering, there is often a cap on how much net metering that utility companies are required to offer (usually a percentage of the utility’s peak electric demand). This means that even if your state does mandate net metering, your local utility may be oversubscribed and no longer offer it.

When this is the case and you have net billing, a solar homeowner must try to shift their electric usage so they consume their solar electricity instead of utility power. This means using most of your electricity during the day and not at night. Otherwise, the excess solar power goes into the grid and the homeowner is reimbursed at a price that’s less than the retail rate of electricity.

In our net metering guide, we gave some tips on how a homeowner with net billing can time shift their electric usage, primarily through the use of internet connected devices and time delay features in large appliances like clothing washers and dishwashers. But this isn’t feasible for everyone - for example, if you work the second shift, you might not have a choice but to use more electricity at night.

So if you have net billing instead of net metering, can’t afford a battery system to store your solar electricity, and don’t think it would be possible to schedule most of your electricity usage during the day when your panels are generating power, solar may just not work out for you.

Reason 7: Net metering is under attack in your state

Not everybody is fond of solar. Electricity is big business, and distributed solar threatens the entrenched interests whose revenue depends on the continuity of the current fossil fuel-based utility system. Because of this, net metering is continuously under attack somewhere in the US.

Most recently, SB-9 in Connecticut rolled back net metering in 2018. However, the new governor Ned Lamont, who took over the statehouse in 2019, has expressed interest in revisiting SB-9, which just goes to show you how volatile this issue can be.

In 2019, net metering was under attack in Kentucky, where the General Assembly passed (and the Governor signed) Senate Bill 100 on March 29, which rolled back net metering in that state.

If you live in a state where the current legislature is hostile toward solar, you should definitely stay abreast of developments such as these. Unfortunately, if you don’t think net billing would financially work out for you, it may be prudent to delay your decision on solar until net metering has a more certain future in your state - which is precisely the sort of thing that anti-solar interests want to see happen.

Reason 8: You can’t afford to purchase a system, and you may sell in less than 20 years

It may sound like a scam, but it isn’t: through a lease or power purchase agreement, it’s possible to pay nothing up front for a solar PV system, and save money every month on your utility bill. There are caveats, however, as outlined in our article on how to buy a solar system and also in this report by Consumer Reports.

The main issue with a PPA or lease is if you sell your home before the contract term is up, which on average is 20 years. If you do sell, you’ll have to convince the home buyers to take over the contract. While solar is becoming more mainstream every day, it’s always possible that a future home buyer won’t want the panels on their home and will refuse to take over the contract. If they refuse, you will have to buy out the lease or PPA and have the panels removed.

The cost of that might be thousands of dollars, and could negate the savings you’ve earned from having solar.

In reality, this shouldn’t be a problem. According to a survey by the Department of Energy, most home buyers see solar as a positive, and would be willing to pay a $15,000 premium for a solar home. Also, this survey was done in 2013, and with the continued growth of solar, the public awareness of its benefits should only increase over time.

That said, if you are feeling risk-averse, you may want to think twice about going solar until you’re able to afford to purchase a system, or you’re certain that you won’t move before a lease term is up. Our feeling at The Solar Nerd is that if you live in an area with a lot of solar (check our map), then future buyers are more likely to have awareness and a positive attitude toward solar than if you live in a place with few solar homes and less familiarity with solar. While the odds are that having solar should actually help you sell your home, it’s important to be aware that not every buyer will see it that way.

But still…

If you find that solar might not financially work out, should you still do it? Maybe: after all, there are plenty of reasons to go solar. It’s better for the environment. You’re protected from future electricity rate increases. It’s really cool to generate your own electricity.

Think of it this way: what’s the payback period for granite countertops? Or stainless steel appliances, or a big television? A house is not just an investment - a home is a place to feel comfortable. A home reflects who you are. If the enviroment is something you care deeply about, that alone may be reason enough to make the leap to solar.

Buying Solar For Your Home: The Complete Guide

This article is part of a series to help the homeowner go solar.