When considering the installation of solar panels on your home or business, you’ll hit a major crossroad: to rent or to buy? This is the Great Solar Panel Debate that could leave you scratching your head. Researching the pros and cons of both options can help you make an informed decision. There’s no right answer for everyone. It depends largely on your personal preferences. Both decisions will lead to significant savings on energy bills. However, one or the other may be the better move for you.
Leasing Your Solar Panels: Pros and Cons
When you lease solar panels, you don’t have to worry about purchasing your equipment, hiring installers, or maintaining the system. The company you lease the panels from will take care of these aspects for you. Leasing is a simpler approach for people who don’t want to deal with the things that go into owning solar panels. You won’t incur any costs if your system needs repairs or solar panel replacement after your warranty expires. For an affordable monthly rate, you can enjoy many of the benefits of solar energy, including lower energy bills. With prices around $70 per month, however, you may not save nearly as much as when you buy solar panels in the long run.
The most obvious con when leasing your solar panels is that you don’t own them. You must still make a considerable investment but you aren’t the official owner of your system. If you plan on selling your home, you won’t be able to list the solar panels as a feature or increase the value of your home. You’ll also miss out on considerable cost savings – in a leasing arrangement, you’re stuck paying an agreed-upon rate for the duration of your contract plus your electric bills. Most solar panel systems pay for themselves within about 10 years. For the rest of the system’s lifespan (which can be from 30 to 40 years), you’re basically enjoying free energy.
Another downfall of leasing your panels is that you can’t take advantage of attractive tax incentives and ownership benefits. The federal government currently offers to give back 30 percent of the total purchase price of a solar system, including labor and equipment. This can immediately give you thousands of dollars back on your purchase. State tax credits can increase savings even more. You’ll also miss out on Solar Renewable Energy Certificates (SRECs), which you can sell to power companies several times per year at about $200 per 1,000 kilowatt hours of energy. Leasing gives up your right to any of these financial perks and tax breaks.
Buying Solar Panels: Pros and Cons
Purchasing a solar system outright will obviously be a larger investment than leasing your equipment. The average cost of the system runs from $15,000-$29,000 or more depending on the size. Fortunately, there are plenty of financing and loan opportunities available for people who want to buy solar panels (on top of an immediate 30 percent tax credit plus other incentives). You can find an affordable monthly payment plan that works for you or take out a loan. Most purchases come with 20-25 year warranties, so your investment is protected for most of its life.
Buying might be more expensive initially, but you’ll ultimately save much more in the long term than by signing a 20-year lease. When you own your solar power system, you can all but say goodbye to your monthly energy bills. You can enjoy such incredible energy savings that your system will pay for itself in about 10 years. After you’ve paid off your system, you can enjoy free solar energy for decades – never worrying about fluctuating energy costs or your leasing company changing the terms. You’re in control of your monthly costs.
Paying up front doesn’t have to be your only option. Many companies offer lucrative loans. After you pay off your system, it’s yours to keep. You can calculate it into the value of your home and increase the sale price. You can start enjoying returns immediately – as soon as the day of installation. You’ll qualify for the solar Investment Tax Credit and enjoy energy independence. You could even find a leasing agreement with the option to eventually buy at a discounted price for the best of both worlds. In the long run, buying will save more money than leasing.
And the Winner Is…
If your goal is to switch and maximize the financial benefits of solar energy, you’ll want to BUY your system. Leasing simply won’t give you the same returns on investment as buying outright. That being said, leasing may be right for you if you don’t mind not owning your system and are mainly concerned with having a system you don’t have to maintain.
Talk to a solar installer if you’re still having trouble making up your mind. A professional can assess your home or business and help you weigh the pros and cons of both solutions. Either way, going solar is a great choice.