Getting a New Roof With Solar Panels

If you’re anything like me, you’ve likely been bombarded by social media ads, particularly on Facebook, promising that your local solar company could give you a hand in footing the bill for a new roof if yours needs replacing.

In fact, many of the homeowners I talk to these days are asking upfront if they can get a new roof with solar panels. I’ve noticed that for some, the allure of going solar is not just to harness clean energy but also a way to get their worn-out roofs replaced when they’re strapped for cash.

But, you’re probably wondering, where’s the catch? Nothing comes free in this world. Let me break down how to qualify for a new roof with solar panels and give some insight on whether it’s a smart move to let the solar company foot the bill for your roof replacement.

Three Roof Replacement and Solar Scenarios

Working on Cape Cod as I do, where the housing stock tends to skew on the older side, I often run into folks who are keen to switch to solar energy, but are hesitant to do so due to their old roofs. It’s a hurdle we in the solar business are motivated to try and overcome because no help with the roof often means no chance for an installation.

Generally, when we’re talking about installing solar panels, the state of your roof can fall into one of three categories.

• Your roof is in rough shape. You’re excited about going solar but the moment the solar company guys show up for a site survey, they take one look and nix the idea immediately.
• Your roof is pretty fresh, like it got new shingles in the last five or ten years. Everyone agrees that installing solar panels should be a breeze. The panels might even help your roof live longer by shielding it from its biggest enemy, the sun.
• You’ve got the solar company over for an inspection and they give your roof the green light, but you’re not convinced. You know deep down that your roof is on borrowed time and you really don’t fancy the fuss or expense of taking off those panels in a few years when it comes time to replace it.

It’s in this third scenario that you need to have a serious chat with your solar guy. The solar company might be able to help with your roof.

Is it Really a Free Roof?

I use the term “help with your roof” very deliberately. I don’t like it when solar ads promise customers a free roof. It’s misleading and inevitably leads customers to ask “what’s the catch?”. After all, it’s your house, it’s your roof. The only person who can reasonably be expected to pay for it’s replacement is you.

Solar reps pretending that the solar company is going to pay for it are being dishonest.

That doesn’t mean it’s not a great deal for some homeowners. But let me explain exactly how it works so there’s no misunderstanding.

Disclaimer: Before I walk you through an example, the lawyers make me say the following: I am not your tax advisor. I am not qualified and certainly not certified to give you tax advice. It’s up to you to consult your own tax professional for professional advice on your own tax situation.

Okay, with that said, let’s consider the following scenario:

• You’ve calculated that you’re currently paying 38 cents/kWh to the utility company
• Your roof gets great sun and you use an average of 800 kWh/month in electricity
• The site survey determines that you don’t need any home upgrades, not even a new roof
• In spite of this green light, you know the roof is 18 years old and you want it replaced before you’ll consider going solar.
• Because the home gets great sun and uses quite a lot of power, the solar company could easily charge 23c/kWh and still make a decent profit on the deal. This would give the homeowner a 40% discount on what they are currently paying to the utility.
• If you want to include a new roof, the solar company can instead charge 28c/kWh. The five extra cents would give the solar company an even bigger profit margin, enough that they can cover some (or maybe even all) of the cost of replacing the roof.

So, the solar company’s deal is like a long-term loan you pay back over the term of the power purchase agreement. It’s interest-free and paid back as part of your monthly electric bill, which is still 26% less than it was before.

It’s not like you’re getting a taxable gift or taking on a loan that might impact your credit score or debt-to-income ratios. It’s just an electric bill that costs a a little bit more each month than it otherwise might have because of the new roof.

It’s a win-win, in that the solar company still gets a profitable installation out of it and you get to finance an expensive home upgrade in a creative way. But it’s not a free roof.

Who is This Deal Best For?

Getting this kind of help from the solar company isn’t always the best way to finance a new roof, but for some homeowners it’s a great deal.

Most obviously, it’s a great solution for people who really need a new roof (like, yesterday) and don’t have the cash to pay for it. Fortune magazine once famously estimated that 37% of Americans couldn’t afford to cover even a $400 emergency expense, and a new roof costs a lot more than $400. So for those people, this deal makes a lot of sense.

Even people who do have the cash to pay for a new roof may choose to keep it for themselves. Maybe you have some known expenses on the horizon, such as a new car or a kid who will soon be heading off to college.

Or maybe you’d rather just put that money into the stock market, where the 25-year gains could far exceed any gains you’d get from putting a big chuck of cash into a new roof. Plenty of people would prefer to have to solar company help with the roof, while they invest in the next Telsa, Apple or Nvidia.

What if You Sell the House?

One of the great benefits of this program is, if you think you might be selling the house in a few years (or even ten years), the benefit of the new roof becomes a real selling point. So does the promise of cheaper electricity. And better yet, the lion’s share of the roof “loan” gets assumed by the eventual buyer.

They’ll assume the electricity bill that the roof cost has been wrapped into. They’ll be happy because that electricity bill is still cheaper than prevailing non-solar electricity rates, and they may even pay a premium for the house because it has a new roof.

So if you need a new roof and you don’t want to shell out cash to pay for it, a solar PPA could be a great option.

What if You Purchase the Solar Panels?

If you buy your own solar panels, not only are you likely to save more money going solar, but you’ll also potentially save more on your roof replacement. But you will either have to come up with more cash or take out a bigger loan. The solar company isn’t going to front you the money in the same way as they would for a PPA.

What is less clear is whether the roof replacement expense can get bundled with the solar panel cost as one project for the purposes the Federal Government’s 30% Investment Tax Credit? And it doesn’t help that even the IRS is unclear on the matter. The IRS form 5695 suggests that the only way to get the 30% tax credit for the roof portion is if the solar array is part of the roof itself, such as with solar tiles or solar shingles. 

That said, there are plenty of solar companies that will give you a single invoice for both projects and encourage you to to submit that with your taxes. As to whether doing so would stand up to the scrutiny of an IRS audit, who knows?

Disclaimer: As mentioned earlier, I am not your tax advisor. I am not qualified and certainly not certified to give you tax advice. It’s up to you to consult your own tax professional for advice on your own tax situation. Never take tax advice from a solar rep.

Final Thoughts on Getting a New Roof With Solar Panels

It’s hard to argue that it’s better to replace your aging roof before you go solar, rather than after. But whether or not you should ask the solar company for financial help is not a simple question to answer.

As with most things in solar, you have to weigh in several factors, such as how much sun your house gets, how much power you use, and whether you’re thinking about buying or leasing your panels.

And remember – if you have any questions about taxes or finances, consult with a tax professional before making any decisions. Never take tax advice from a solar guy, especially not from one on the internet.

If you’d like an informative, no-pressure chat with either of the Cape Cod Solar Guys, about whether going solar could help your home qualify for a new roof, you can contact us here.

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