The Critical Differences Between Leasing and Buying Your Solar System
At Solar Experts, one of our most frequently received questions is whether it is better to buy or lease solar panels. We understand that every homeowner has different financial goals and preferences, but in most cases the answer is clear.
Buying solar panels often requires more investment and decision making than leasing. However, the long term benefits of owning your system are hard to beat. Let’s explore why so many homeowners choose to buy their solar panels.
A huge plus for customers who own their solar systems, is they keep all the benefits from government tax incentives. When you lease instead of buying your solar panels, you add layers of expenses while giving away federal tax credit, state incentives, and company rebates that would otherwise benefit you. These incentives could end up covering the cost of the solar system in the long run, but will instead go to the leasing company.
Low Energy Bills
Once you purchase your solar system, your monthly savings on utility bills start to accumulate. Within 5 to 7 years, these savings will likely surpass the upfront cost of your investment. From there- your solar electricity will be 100% free for the remaining lifetime of your installation.
People who lease their solar systems save far less than those who buy them. Many leases contain an escalator clause that can reduce savings by increasing your payments yearly. For many, this choice does not make financial sense, and if you have poor credit, you can end up paying more than the advertised price.
One of the most important benefits of buying a solar system is your ownership and control. Leasing companies want to maximize their profit. Because of this, you can end up with more panels than you want and in highly visible places without regard for appearance.
Leasing contracts can also make it more difficult to sell your home. Potential buyers may be frightened by an existing solar lease because they will have to meet credit requirements and make payments on the remainder of the lease term. In contrast, if you own your solar system, the property value of your home increases. This is because future buyers will gladly pay a premium to acquire a solar-enabled residence.
Whether you decide to buy or lease a solar system, this decision will help you shrink your carbon footprint and help everyone get closer to a more viable planet. Contact us today and we can take a look at your financial goals and help you get started.