Retirees are using this strategy to slash their biggest monthly bills

We all look forward to the day we can finally retire. It’s easy to romanticize a life free from the daily grind, where you can fully enjoy hobbies, time with loved ones, and the freedom to do as you please. But a stress-free retirement requires a lot of planning and saving. Unlike your salary, your bills won’t disappear once you stop working. Without a steady paycheck, your investments become essential to running your household. 

Establishing a secure financial future for your retirement means exploring a variety of savings options—including solar panels. Many homeowners don't realize that installing a solar panel system can be one of the smartest retirement investment strategies, especially given today’s rising electricity rates. By viewing a home solar panel system as an investment opportunity, homeowners can reduce or even eliminate their electric bills, freeing up that cash for what matters most. 

“A key thing for retirees to consider is cash outflow because you no longer have a cash inflow from a job,” said Jeffrey Walker, who went solar through EnergySage in 2021. “I looked into solar as I noticed what was happening to electricity prices. Now that I’m retired, it certainly helps reduce monthly expenditures on electricity.”

To ensure financial stability, retirees and those planning their retirement generally invest in lower-risk options. Solar panels are a natural fit: They provide steady, increasing returns—similar to the high returns associated with traditional investments like stocks and bonds—but without the unpredictable fluctuations of those markets.

Solar has many financial benefits, including reduced electric bills, protection from future price increases, boosted home value, additional income streams, and tax-free savings. 

Solar reduces or eliminates electric bills

Your solar energy system can generate up to 100% of your electricity needs, eliminating electric bill costs and freeing up more cash every month to spend or invest elsewhere. 

That said, it’s important to note that even if you don't owe money on your electric bill, you'll still receive an electric bill if you're connected to the grid. 

Solar protects against future price increases

Utility electricity rates are turbulent. Over the past 10 years, they've increased by over 38%—and thanks to today’s growing electricity demands, they're only expected to continue increasing. 

By generating your own electricity, rather than buying from your utility, you can protect yourself from unpredictable rate increases for the lifetime of your solar energy system—generally 25 to 30 years. 

Solar increases the value of your home

Installing a solar energy system is an investment in your property. Multiple studies have shown that homebuyers are willing to pay more for homes equipped with solar panels.

You may generate additional income with solar

If you live in a state with a market for solar renewable energy certificates (SRECs), you can earn extra money by selling them. It works like this: A utility company purchases the right to “count” your panels’ electricity towards their renewable generation. Selling SRECs is one of the best solar incentives available. 

The benefits of solar investments aren't taxable

Unlike returns from more traditional investment vehicles, your financial returns from solar come in the form of monthly savings, not income (with the exception of SRECs), meaning they are not subject to taxation.

Thanks to the growing availability of $0-down solar loans, homeowners who don’t have cash on hand—or who, like Jeffrey, prefer to keep their money invested—can still leverage solar as a smart retirement strategy. 

When Jeffrey went solar, it made more financial sense for him to finance the system rather than pay upfront using cash from his investment portfolio. “I didn't want to reduce my portfolio that generates interest, dividends, or appreciation in stock prices,” he explained. Instead, he secured a loan with an interest rate low enough that his investments could continue earning more than he’d pay in financing. 

Generally, buying your system outright with cash provides the greatest long-term savings. However, as in Jeffrey’s case, financing your system with a low-interest loan may make more sense if your cash is better invested elsewhere. Ultimately, the best option depends on your individual circumstances.

You can finance your system in one of three ways:

1. Buy the system outright

If you have a CD or other recently matured investment, using that cash to purchase a solar energy system can be a smart way to reinvest it. In 2025, the average EnergySage homeowner reaches payback in just about seven years.

Paying upfront means avoiding interest altogether—you keep 100% of the system’s financial benefits. And with today’s high interest rates, that’s often the most lucrative financing option. Even Jeffrey, who initially chose a solar loan, eventually paid off his system in full. “The rates that I started with were incredibly low,” he said. “But then, as interest rates shot up, it became very expensive. At that point, I just paid off my loan and essentially paid for the panels outright.”

2. Buy the system with a solar loan

If you can't or don't want to pay for the system in cash, many banks and other financial institutions offer $0-down, low-interest solar loans to help with your purchase. Monthly payments are often lower than your monthly electric bill, enabling you to save money right away. Homeowners retain 40% to 70% of the financial benefits of their system with a solar loan, depending on the loan terms.

“If the [monthly loan payment] is less than what you would pay on average for electricity costs, then that’s an immediate benefit,” Jeffrey offered. “In the longer term, it becomes a very positive event in terms of eliminating or dramatically reducing your cash flow outflow to pay for electrical bills once you pay off the investment.”

3. Sign a solar lease or PPA

If you choose a solar lease, you won’t pay anything upfront. Instead, a third-party owner charges you a monthly rate to "rent" a solar energy system. This will likely result in 10% to 20% savings on your electric bill for the duration of your lease agreement. 

Solar leases and power purchase agreements (PPAs) generally result in the lowest solar panel savings. While the monthly payments are often similar, a loan allows you to own your system—and qualify for valuable solar incentives. With a lease, you don’t own the system, so you miss out on most of those savings opportunities.

Still, a solar lease is a great way to reduce your electric bills, especially for retirees who aren’t eligible for the federal solar tax credit.

Retirement should be about enjoying the years you’ve worked so hard for—not watching rising electricity bills eat away at your fixed income. Yet that’s exactly what’s happening to millions of retirees as utility rates skyrocket year after year. 

For retirees like Jeffrey, who still pay income taxes on investments, going solar now could offer major savings. Starting January 1, 2026, the federal solar tax credit will drop from 30% to 0% for residential systems, following the enactment of President Trump’s megabill. Homeowners who install solar before the deadline can save around $9,000. 

Many retirees without federal tax liability have less urgency, since they can’t claim the credit directly. For leased systems or PPAs, the credit remains available if construction begins before July 2026 or the system is placed in service by 2028—though it goes directly to the company, not the homeowner. 

Tax credits aside, solar delivers something even more valuable: energy independence. Switching to solar shields you from unpredictable utility rate hikes, protecting more of your savings for the things that truly matter.

"Our electric bills for air conditioning used to be astronomical in summer, and now we still have energy credits going through the whole summer,” Jeffrey said. “We’re covering about 90% of our electricity demand with solar.”