From a purely financial perspective, the decision to install residential solar panels is transitioning from an environmental lifestyle choice to a sophisticated capital investment strategy. Solar energy allows you to convert that liability into a CAPEX. Understanding the Revenue MechanismTo truly view solar as a business, one must understand the revenue model, which is often governed by a policy called Net Energy Metering (NEM). The solar industry offers a version of this through the investment tax credit. This incentive acts as a massive subsidy for your initial capital investment, significantly shortening the payback period and de-risking the venture.