As solar energy gains popularity, homeowners are increasingly turning to solar panels to save on energy bills and reduce their carbon footprint. One crucial decision in the process is whether to buy or lease solar panels. Both options have advantages and drawbacks, and understanding these can help you make the right decision based on your financial situation and energy needs. This blog will explore the debate of solar panels buy or lease, breaking down each option to help you determine the best fit for your home.
How Does Leasing Solar Panels Work?
Leasing solar panels is much like renting a car or a home. You don’t own the solar panels; instead, a third-party company owns them and installs them on your roof. In return, you pay a fixed monthly fee for the energy the system generates. This option can make solar energy more accessible by eliminating the need for an upfront investment. If you choose to lease or buy solar, leasing is appealing to those who want immediate savings without the responsibility of ownership.
One of the significant benefits of leasing solar vs buying is that the leasing company handles the installation, maintenance, and repairs. This can be especially advantageous if you don’t want the hassle of maintaining your solar system. However, leasing means that you will not own the panels, and as a result, you won’t be eligible for federal or state solar incentives like the 30% tax credit.
Buying Solar Panels: Ownership and Long-Term Savings
When you opt to buy solar panels, whether through cash or a loan, you own the system entirely. One of the primary advantages of buying solar panels vs lease is that you qualify for significant federal and state tax incentives, including the 30% federal solar tax credit. If your solar system costs $20,000, for example, you can claim a $6,000 tax credit. Buying also increases your property value; homes with solar panels tend to sell faster and at a higher price. According to Zillow, solar panels can add up to 4% to the value of your home.
On the flip side, the upfront cost of buying vs leasing solar panels can be steep, typically ranging from $15,000 to $30,000. However, this initial investment can result in more substantial long-term savings, especially if you plan to stay in your home for many years.
Ownership vs Leasing Solar Panels: What Happens When You Sell Your Home?
When comparing owning vs leasing solar panels, selling your home can be a pivotal factor. If you own your solar panels, they will likely increase the resale value of your property. Potential buyers will appreciate the energy savings and the eco-friendly aspect of the home. The panels become an asset, adding value to the sale.
However, if you lease solar panels, the process can become complicated. Many buyers may not want to take over the lease, which could potentially delay or even derail the sale of your home. Some lease agreements allow for the transfer of the lease to the new owner, but not all do, so it’s crucial to clarify the terms with the leasing company before putting your home on the market.
Cost Considerations: Leasing Solar vs Buying Solar
One of the most important aspects when deciding to buy or lease solar panels is the overall cost. Leasing solar panels typically involves a monthly payment that ranges from $50 to $250, depending on your location, energy usage, and the company’s terms. While this cost might be lower than your previous electricity bills, leasing can become more expensive over time due to escalating interest rates or additional fees. Over a 20-year lease, these costs can add up.
In contrast, buying solar panels requires a higher upfront cost but offers more predictable long-term savings. If you finance your purchase with a solar loan, you can spread out the payments over time while still enjoying the benefits of ownership. Additionally, owning the system ensures that any savings from reduced electricity bills go directly into your pocket.
Which Option Is Best for You?
The choice between owning vs leasing solar panels largely depends on your financial situation and long-term goals. If you can afford the initial investment and plan to stay in your home for many years, buying solar panels is generally the better option. It allows you to maximize savings, qualify for incentives, and increase your home’s value.
On the other hand, leasing may be the better choice for homeowners who cannot afford the upfront cost or don’t want to handle the system’s maintenance. Leasing also offers immediate savings and requires less financial commitment, making it ideal for those who don’t qualify for solar incentives or plan to move in the near future.
Conclusion
Deciding between solar panels buy or lease is a significant step in your solar journey. Both options offer the chance to save on energy costs while reducing your carbon footprint. However, buying offers long-term financial benefits, ownership of the system, and an increase in property value. Leasing provides a low-cost entry into solar energy but comes with limitations, particularly regarding ownership and potential financial incentives. Consider your budget, future plans, and energy goals to determine the best choice for you.
For expert guidance and the best solar financing options, contact SolarSME today!