Better to Lease or Own Solar?
So what’s better for you?
Buying your solar array or leasing it.
Well let’s take a look.
According to the Pew Research Center about ½ of U.S. homeowners have given serious thought to going solar in the past year or so.
There are two ways to do this.
Lease a solar system or Buy a solar system.
When you lease you are basically renting a solar system from a solar company.
The company puts solar panels on your roof and you pay them a monthly fee.
You still pay your utility for grid connection and whatever electricity you use that your solar array doesn’t generate, but the two bills combined should be less than your current electric bill.
The leasing contract lasts about 20 years and the solar company will maintain the system.
The leasing option was very popular a few years back when solar installations were expensive, but now prices have come down.
And today's solar financing options allow homeowners to lock into low fixed rates, while leasing deals are often subject to annual rate increases of 2-3%.
For people who want to go green, but don’t have cash or can't get a loan, leasing still might be the way to go.
But for most, buying a solar system makes more financial sense.
When you buy your system, you get the 26% Federal Tax Credit. When you lease, you don’t qualify for the tax credit.
In states that offer solar energy credits, the owner of the solar system reaps this reward. If you lease solar panels, you won’t see that cash.
When you own the solar system selling your home is much easier.
Solar panels add value to your property and increase the price of your home.
According to the National Renewable Energy Laboratory, homes with solar panels sell 20% faster and for 17% more than those without.
Potential buyers see the value of producing their own electricity and this makes your property more appealing.
If you’re leasing a solar system selling your home could be more difficult, since you’ll have to pay off the lease or have the new homeowner assume it.
Buying out a solar lease is often expensive, making it harder for you to sell your home.
Finally, owning a solar array gives you the freedom to control your own electricity. When you lease, someone else still has control.
Both options enable you to reduce your carbon footprint, but owning your solar system makes you the decision maker and is more financially sound.
Joe Collins is the owner of CIE Solar Energy, LLC.