I want to keep this one short and clear. Do not let the opportunity cost of other investments tangle up your decision about solar panels.

The Main Idea: Cost saving is a better investment than increasing earnings.

  1. A power bill, probably from from Idaho Power, is an expense for your investment portfolio. You must pay it, you do not get that money back later, you cannot expect a return on your power bill. The power bill is subtracting from your portfolio balance over time.
  2. A typical investment like retirement savings, stocks, bonds, a rental property,… is going to yield some positive return. You pay now, for gains later. The investment is adding to your portfolio balance over time. You will pay taxes on these types of gains.
  3. Solar is a different, third thing. A double play. By eliminating the power bill expense from your portfolio you add to your portfolio balance. Totally untaxed gains! As an additional bonus; the value of your property goes up by some amount (similar to the value of your solar system) so the installation cost is more like paying your mortgage than paying rent. You have added to your savings.

Commcercial solar installations may also be eligible for accelerated depreciation, but let’s not go there today.

What about investing in X, Y, or Z?

Same idea. I hope your IRA gets you great returns, and your rental property does well, and your stocks go up and to the right. However, I argue that solar installation is a superior choice. Panels remove your power bill, AND contribute to the value of your home. Any other investment will hopefully make a return for you, but not address the ever growing negative power bill in your portfolio. If your next investment charged you several hundred dollars a month would you still choose it?

Disclaimer: I am not a financial advisor, and I am certainly not YOUR financial advisor.


Good luck with your solar panels!
Thomas Lansing