Dave Ramsey Shuns This Popular Home Update: ‘Don’t Do It'

For many, Dave Ramsey is seen as a trusted source on smart financial decisions and staying out of debt. They look to him for advice on how to approach everything from their mortgage to how they can quickly pay off their credit card. But he recently offered a divisive opinion on a popular home improvement project, and it's causing some controversy across his audience.

During his radio show, Ramsey shared that solar panels aren't necessarily the no-brainer money moves for homeowners that they're often considered to be. But what's driving his hot take? Here's a look at what he says about how the numbers break down and what that might mean for those who are considering solar panels.

What Dave Ramsey has to say about solar panels

On his popular radio show, Dave Ramsey spoke with Sid, a caller from Phoenix, whose plan was to get solar panels by the end of 2025, when the 30% federal tax credit expires. Sid had been quoted $31,000 for solar panel installation, and when the 30% tax credit was taken into account, he was still looking at a cost of $22,000.

Why was the homeowner considering spending that money? In theory, installing these panels significantly reduces electric costs, which, after a number of years, could result in the panels practically paying for themselves.

But Ramsey, who's never sugarcoated his thoughts on solar panels, points out that the numbers don't quite add up, and the time it will take to break even on the solar panels should make any homeowner second-guess whether the expense is worth it.

Why does Ramsey feel this way?

In Ramsey's opinion, solar panel installation needs to have a break-even of six years or less to be worth the investment. Ultimately, he believes they have too long a payback period considering the high upfront costs.

Utility rates vary depending on where you live, and based on Sid's own utility rates, Ramsey said it could take him nearly a decade to break even on the solar panel installation.

Ramsey also notes that solar is continuously evolving, which means today's solar technology could change too fast for the investment to make sense. Add in Ramsey's opposition to debt of any kind and the fact that only 19% of solar panel installations are paid for in cash, and it's clear that these go against his entire money philosophy.

Why solar is so popular

Ultimately, Ramsey encourages homeowners to dedicate their funds toward paying off debt or investing in upgrades with better ROI instead. But despite Ramsey's opposition, solar is becoming increasingly popular.

Between the 30% federal tax incentive and homeowners trying to balance out the increasing price of energy, solar deployments have experienced an average annual growth rate of 28% year-over-year in the last decade, according to the Solar Energy Industries Association (SEIA).

They offer the promise of reduced electricity bills, which is particularly appealing to homeowners facing budget constraints due to inflation. Homes with solar panels often have a better chance of selling for a higher premium, and from a renewable energy standpoint, those who value sustainability find appeal in solar as a clean, renewable energy that reduces carbon emissions.

Cost of going solar

These benefits aren't without a price. While the price of installing solar will vary widely by location, specific products, installers, and the size of the home, there are average costs to consider.

Nationwide, the average homeowner will pay between $18,356 and $36,403 to install solar panels, though the numbers can run as low as $3,500 and as high as $55,000, all depending on the size of the house and other considerations. Within these costs, expect to spend 50% on materials, 25% on labor and permits, and 25% on maintenance.

And, of course, the important piece to consider is whether the installation qualifies for the federal tax incentive. The solar tax credit, originally 30% of installation costs through 2032, was recently terminated by the One Big Beautiful Bill (OBBBA). Beginning Jan. 1, 2026, homeowners will no longer be able to take advantage of the 30% tax credit.

But until then, you can subtract 30% from your total cost. The amount that equals 30% is subtracted from your overall federal taxes you owe on tax day. That means if it costs $10,000 to install your solar system, you would qualify for a $3,000 tax credit, which would reduce your tax bill.

Potential savings

While Dave Ramsey may not support solar panels, there are instances where they make financial sense, even given the expensive initial investment.

If you live in a state with high electricity costs or in a place where you frequently use air conditioning due to the sun and heat, you might break even faster on solar panels. The more you generally spend on electricity, the more solar panels will save you. According to EnergySage, for example, the average homeowner saves $52,000 on electricity over the lifetime of their solar panel system.

Some experts even say that solar panels will add 5% to 10% to your home's resale value, which is more than double previous estimates, notes EnergySage. That means if you don't plan on staying several years, there may still be a payoff.

Potential downsides

Sunshine is required for solar panels to operate at their full capacity, which means your location and climate will have a big impact on whether or not they're actually worth installing.

If you experience more cloudy or rainy days than sunny ones, or if there's significant tree cover around the installation site, you may struggle to maximize the solar panels' energy output. A partly cloudy day could mean your solar panels only produce 10 to 25% of their typical power capacity, according to Solar Alliance.

Additionally, it's no surprise that there are steep upfront costs. But if you live in an area with low electricity costs, it may also take longer to break even on your solar panel installation. During the time it takes to justify the cost, there could be issues with maintenance, lifespan, and other factors that will decrease the efficiency of the solar panels.

Bottom line

Whether or not you follow Dave Ramsey's advice, to avoid wasting money on home improvements like installing solar panels, look at comps in your area, talk to other homeowners who can speak to real-life experience, and carefully consider the potential pros and cons before investing in them.

Home services website Angi notes that homes with solar panels sell for 4.1% more than those without them. But for the ultimate optimization, you'll need a south-facing roof with a 15 to 40 degree slope that isn't shaded, with the most payoff if you live in an area with high or average energy costs.

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