Are you a homeowner considering making the switch to renewable energy? Going solar has so many environmental benefits, but your wallet will thank you as well — although perhaps not at first. Solar panel systems come with a pretty high price tag, and the sticker shock often makes homeowners have second thoughts. The good news is that homeowners have options: they can either purchase and own the system outright or they can choose to lease their panels. It is important for everyone to understand both options so they can make the most informed decision for their unique circumstances.
Both options have their advantages and disadvantages, so let us dive a little deeper into each option below.
The Key Differences Between Buying and Leasing Solar Panels
Homeowners that buy their solar panels might not have access to a payment plan, although there are usually credits and incentives in place to help ease the financial burden. Still, the upfront costs will be much higher when you buy, which is why solar panels are considered to be a huge investment.
Leasing solar panels makes the switch to renewable energy more attainable for homeowners who do not have the cash on-hand for an upfront payment. However, a third-party owns the equipment and handles the installation and maintenance for you. You pay a monthly fee to utilize the energy that is generated by the system you are leasing.
The Pros and Cons
Your decision will ultimately depend on your circumstances, but below are some of the pros and cons of buying and leasing your solar panels.
Pros of Buying
- Owning your system can give you access to federal tax benefits and local incentives.
- You will enjoy monthly savings on energy bills and get a full return on investment in less time than someone who leases their system.
Cons of Buying
- Regardless of if you use cash or a loan to pay for the system upfront, it will still be a pretty substantial payment.
- You are responsible for the cost of removing the system at the end of its useful life, or if the next homebuyer does not see the value in solar energy.
Pros of Leasing
- Most solar leases require little to no upfront costs, so you will be able to enjoy the benefits and savings of solar energy with almost no money down.
- Even though you will likely be responsible for paying a monthly fee, most problems you experience with your solar panels will be on the third-party owner to pay for and fix.
Cons of Leasing
- You will not qualify for any government or local rebates or incentives since you do not own the system.
- You will likely end up paying more to lease your solar panels in the long run than if you would have bought the system yourself.
- If you try to sell your house before the end of your lease, you may need to buy out your solar panels if the next homeowner does not want this type of financial commitment.
There really is no wrong answer to buying or leasing your solar panels. You get to help the environment while also saving money on your energy bills. If you ever need to get a solar system appraisal, we are here to help!