Lease or Buy your Solar panel system?
While solar energy offers multiple benefits to households, there’s the big question over whether to buy or lease the solar panel system. It’s a debate that has raged for years and many homeowners get confused by varying opinions on the matter.
If you are in Arizona, it’s advisable to talk to your solar installer to get all the details you can about solar system leasing vs purchasing. Total Solutions is among the best AZ solar installers and has a knowledgeable consulting team to work with clients on their projects.
This post looks at the pros and cons of leasing and buying solar panels to help you make an informed decision.
Buying Solar Panels
This is the most common option for homeowners who consider solar systems a home improvement project. Purchasing the solar system offers some benefits, including:
- Maximizing the full financial benefits of installing a solar panel system without any conditions attached. You won’t pay monthly payments for years the leasing company and you start enjoying the cost savings immediately.
- A simple and straightforward option. Within five to seven years, the system will have paid for itself.
- Greater flexibility if you plan to sell your home in the future. These panels increase your home’s value.
- Leverage federal and state incentives and tax credit opportunities and sell Solar Renewable Energy Certificates (SRECs).
Leasing Solar Panels
solar power system leasing involves a partnership with a financing and installation company. The company installs solar panels on your home without any money down and makes all connections necessary to provide electrical power to your home.
In return, you will pay a fee for the rights to use these panels for a set period (mostly15 and 25 years). Once the lease ends, you have no further financial liability.
The other lease option is a Power Purchase Agreement (PPA) where you agree with a solar power provider a set price for each kilowatt-hour of electricity consumed. This means your monthly payments will fluctuate based on how much power used in your home.
In this arrangement, the solar leasing company keeps the government subsidies and is responsible for the solar panel system. Some reasons to lease solar panels include:
- Quick and easy option to start enjoying the benefits of solar energy
- No upfront costs for the solar system
- No responsibility for maintenance or repairs to the solar panels/system
- Chance to buy the solar system at the end of the lease at a lower price.
Buying Vs. Leasing Your Solar Panels
So which is the best solution between purchasing the system and leasing? While both offer savings, buying solar panels will give better returns. If the lease comes with a can come with a fixed payment plan, it means you only save if the utility bills exceed the payment plan.
What’s more, purchasing your panels makes this a wise investment that can increase your home’s value. You might not need to pay any upfront costs for a solar panel lease, but you will lose control of your roof.
Solar lease contracts can also scare away home buyers if you intend to sell in future. While the maintenance/service plan looks like a good deal, you might never need it for the life of the lease.
Are you wondering whether to buy or lease a solar panel system for your Arizona home? Talk to us at Total Solutions and let’s help you make the right choice.