Which Makes More Sense For You?
More and more people are making it a point to switch to renewable energy resources every day.
Not only does it help the environment, it can also be more economical. Because of this and the increased affordability, a lot of homeowners are turning to solar panels as an energy source for their homes. But whats better, buying or leasing solar panels? Here are some basic considerations that can help you decide if you should buy or lease solar panels for your home.
SEE ALSO: The Solar Panel Basics
The main difference between buying and leasing a solar panel system is ownership.
When you buy the panels, whether financing through a loan or paying for it in full, the system is yours; you own it. Leasing, on the other hand, is like renting. If you lease the panels, they belong to the company you are leasing them from. You pay the leasing company for the length of your contract term, and when that period is over, the company will take the panels back. In some cases, though, you may be able to buy the panels from them at fair market value once the contract is up.
There are three types of solar panels that can be used as an energy source for a typical home: monocrystalline silicon, polycrystalline silicon, and building integrated photovoltaics (BIPV). The main factors people consider when deciding between these three panel systems are in the efficiency, price, and look of each.
When buying your panels, you have the freedom to choose whichever one you prefer. So, whether you want the more efficient monocrystalline silicon or the less noticeable BIPV, the choice is yours. Even the brand you go with is up to you. However, if you decide to lease the panels, your choices are narrowed down to whatever systems the leasing company has on hand.
If you have commitment issues, leasing your solar panels may not be for you since solar leases usually come in 10 to 25 year termswith 20 years being the most common. Also, if you plan on selling your home, you should know that many homebuyers hesitate to buy a house with a long-term solar lease attached.
Because, unless you pay off the lease completely, they will have to take over the payments. And who wants to pay for used panels that still have 15 years left on the contract, especially when there are probably newer, more efficient systems available?
Buying your panels outright gets rid of this problem. When you own the panels, you can sell them if you decide they arent working for you or if you want to upgrade to a newer model. Plus, having a fully paid system already installed on a house can raise its value as much as $25,000.
Upkeep And Repairs
Whether you lease or buy, maintaining properly installed solar panels doesnt take much effort because they dont have any moving parts. A gentle spraying with the garden hose should be fine, or you can use a soft sponge and some soapy water if needed. Of course, you can also get the panels professionally cleaned. Also, the solar panel systems power inverter or battery should be changed every 10 to 15 years.
If you lease your solar panels, though, the leasing company will come out and change the inverter for you. This is because most solar leases come with the bonus of free repairs and system monitoring,
which allows you to monitor the performance of your solar system from an app, website, or other software. So, if anything ever does go wrong with the system, the leasing company will come out and take care of it for no extra charge.
Cost is probably the most influencing factor when debating between buying and leasing solar panels. While the price of the panels themselves are standardized, its really the installation, permitting, roof size, and amount of electricity you need that determines how much you pay.
While these costs often vary by region, in todays market, the average home owner will spend at least $20,000 when buying a solar panel system, installation and all.
With leasing, however, the homeowner usually pays nothing upfront. A main selling point for a solar lease is free installation and $0-down.
Although youll be making monthly payments, which you wont have to do if you buy the panels outright, youll most likely be paying less than youre electricity bill, so youll still be saving money. Just make sure your lease contract includes a locked-in rate, or youll find your monthly payments increasing year after year.
On the other hand, when you buy your panels, you qualify for tax credits, rebates, and other incentives that can reduce the overall cost of the system up to 50%, depending on where you live. When leasing, these benefits go to the leasing company, who in turn charges you your low monthly rate.
SEE ALSO: 4 Loan Programs That Will Help You Pay For Your Solar Panels
While buying your solar panels gives you more benefits and will save you the most amount of money in the end, leasing is a great option for those who dont want to invest a large amount on the offset, or who dont pay enough taxes to benefit for tax credits. Any way you go, installing solar panels in your home will save you money on your electricity in the long run.
Just make sure you research all your options in order to get the best deal.