‘Don't Do It': Dave Ramsey Shuns Homeowner Eager To Update Their Home With Popular Remodel

Yahoo

3 days ago

A recent caller to financial guru Dave Ramsey's radio show thought he was making a smart, money-saving move: adding solar panels to his home.
But Ramsey didn't just advise against it—he flat-out dismissed the idea.
And it's not just recent, political developments that have guided his decision. Truth is, he's never been very fond of the improvement for homeowners.
Why Dave Ramsey says solar panels are a thing of the past
Sid from Phoenix called into The Ramsey Show this week to see if he should get solar panels before the end of 2025, so he'd be eligible for the 30% federal tax credit that's expiring Dec. 31.
Sid was quoted $31,000 for a solar installation, and his cost would be about $22,000 after the 30% tax credit.
Based on Sid's local utility rates, Ramsey estimated it would take eight to nine years to recoup the cost through energy savings.
But Ramsey—who has historically been skeptical of solar and energy-efficiency upgrades with long break-even timelines—advised Sid not to do it, since he believes solar needs to have a break-even of six years or less to be worth it.
Ramsey said that because solar technology becomes obsolete quickly, "eight years from now, it will be substantially different than it is right now.'
Because of solar's high upfront costs, long payback period, and declining federal and state incentives, Ramsey advised against it—especially in states with lower electricity prices.
His advice? Homeowners should focus on paying off debt, boosting cash flow, and investing in upgrades with better ROI instead.
The changing future of the residential clean energy credit
The Energy Policy Act of 2005 introduced a federal solar tax credit, which was originally 30% of installation costs.
Under the Inflation Reduction Act of 2022, the Investment Tax Credit of 30% for residential solar systems was extended to 2032.
After 2032, the credit was scheduled to fall to 26% in 2033 and then to 22% in 2034.
However, under the Trump administration, there's an accelerated phase-out of solar tax credits.
The One Big Beautiful Bill (OBBBA), now law, terminates the residential solar tax credit as of Dec. 31, 2025. After that, homeowners will no longer be eligible for the 30% tax credit.
That means a $25,000 solar system would qualify for a $7,500 tax credit if installed before Dec. 31, 2025—but starting Jan. 1, 2026, that benefit disappears.
Pros and cons of solar panels in today's market
The advantages of solar panels are many, according to Steven Grant, co-founder & chief operating officer of solar company Guardian Home.
Grant notes that in sunny states, solar can cut electricity bills dramatically—or even erase them altogether.
'You'll have a levelized cost compared to the potential rate hikes from utilities over the next five, 10, 20, or 30 years,' he explains.
Solar offers environmental advantages, greater energy independence, and, in some areas, the potential to increase a home's value.
Still, solar skeptics caution that buyers need to watch out for steep upfront costs and potential financing traps.
In areas with lower electricity rates, long payback periods can also be a drawback.
Other concerns include ongoing maintenance, limited equipment lifespan, and uncertainty around future incentives and net metering rules.
Homeowners need to carefully consider both the benefits and drawbacks before deciding if it's the right choice for them.
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