As of 2021, about 4% of homes in the US had installed solar panels, with the number growing by the day. Solar panels not only cut energy costs, but they’re also a clean energy source. This makes them perfect for the burgeoning environmentally-conscious demographic.
Installing solar panels in your home or business will set you back about $15,000 to $25,000, depending on the size of the solar system. This might be too much for the average homeowner or business person.
Thankfully, if you can’t buy a solar panel system outright, you can lease one with solar financing. In some cases, leasing a solar panel is better than buying one, even if you have enough money to buy one. This begs the question, should you buy or lease your solar panels?
This is an excellent question, and we have all the answers you need. In today’s post, we’ll be helping you figure out whether you should buy or lease your solar panels.
The Cost of Leasing vs. Buying a Solar Panel
As mentioned above, buying a solar panel will set you back at least $12,000, depending on the size of the solar panel.
Most residential buildings require 20 to 25 solar panels for a complete setup that offsets their entire electricity bill. This means that in about 10 to 15 years, you’ll have recouped whatever you spent on the solar panels.
On the other hand, leasing solar panels can cost as little as $50 per month. However, you won’t get any of those great incentives that come with burying a solar panel. If you’re strapped for cash, you’re better off leasing solar panels than buying one outright.
What’s the Difference Between Buying and Leasing a Solar Panel?
The two main types of solar financing are buying and leasing. When you buy a solar panel, you’re the system’s owner from day one. This means that if your state or utility company offers any incentives for owning solar panels, such as tax breaks or renewable energy credits, you get to keep all those benefits.
Leasing a solar panel means that you’re essentially renting the system from a solar company. The solar company owns, operates, and maintains the system for you. This means that if there are any problems with the system, it’s up to the solar company to fix them.
Solar Financing Options
If you can’t buy solar panels with your savings, you can always consider one of the myriads of financing options. Some of these financing options include:
- Home equity loans
- Solar loans
- Solar leases
- Power purchase agreements (PPA)
- Property assessed for clean energy
Solar companies like Blue Raven Solar have excellent financing options and payment plans. Check them out and see whether you can find a financing option that works for you.
Pros of Buying Solar Panels
There are many advantages to buying your solar panels instead of leasing them. Some of these benefits include:
Full Ownership of the System
The most obvious benefit of buying solar panels outright is that you get full ownership of the panels. This means you can do whatever you want with the solar panel, including selling it.
It also means you don’t have to keep looking over your shoulder to ensure you don’t violate any of the solar company’s terms.
Better Long-Term Savings
While the initial investment might be higher, buying solar panels will save you more money in the long run. When you lease a solar panel system, you’re essentially paying for someone else to own it.
Over time, the cost of leasing a solar panel system can add up to more than twice the cost of buying one outright. In some cases, it can even be three times as expensive.
Increases Your Home’s Value
A solar panel system becomes part of your home the moment you buy it. This means that if you ever want to sell your home, the solar panel system will increase the resale value of your home.
According to a recent study, homes with solar panels sell much faster and for a higher price than homes without solar panels. If you’re planning to sell your home in the future, consider buying solar panels.
What’s more, homes with solar panels are easier to sell than those without. This is especially true with the surge of environmentally-conscious individuals.
Makes You Qualify for Federal Tax Credits
The federal government offers a tax credit for solar panel systems. This tax credit is only available to people who own their solar panel systems. Homeowners who lease their panels, unfortunately, don’t qualify for such credits.
In addition to the federal tax credit, some states also offer additional tax breaks for solar panel owners. These tax breaks can further offset the cost of buying your solar panel system.
Cons of Buying Solar Panels
While buying solar panels is great, it’s not without its downsides. Here are a few cons to buying your solar panels outright.
It’s Expensive
The most significant downside to buying a solar panel is the hefty cost. With solar panel installation costing as much as $30,000, it may not be a viable option for most people.
If you’re considering buying a solar panel, be sure to factor in the cost of maintenance and repairs. These costs can add up over time and eat into your savings.
What’s more, most solar panel systems have a lifespan of 20-30 years, meaning you’ll have to replace them sooner or later.
You’re Responsible for Maintenance and Repairs
When you buy a solar panel system, you’re responsible for maintaining and repairing it. This means that if something goes wrong with the system, you’ll have to foot the bill.
Over time, the cost of repairs and maintenance can add up. In some cases, it may even be more expensive than leasing a solar panel system. So before buying a solar panel system, be sure to factor in the cost of maintenance and repairs.
Selling SRECs Is Compulsory
If you live in a state with an SREC program, you’re required to sell your SRECs. An SREC is a solar renewable energy credit that’s earned for every megawatt-hour of solar energy produced.
While this may not seem like a big deal, it can be a hassle if you’re not familiar with the process. Fortunately, some companies can help you sell your SRECs.S
Pros and Cons of Solar Leasing
If you’re on a tight budget, consider leasing a solar panel system instead of buying one outright. That way, you can own a solar panel by making tiny monthly payments. It’s way better than spending a lump sum on one when strapped for cash.
Pros of Solar Leasing
Some people find leasing their solar panels a more feasible option compared to buying them. Here are some benefits of leasing a solar panel system.
Zero Up Front Costs
One of the best things about leasing a solar panel is that it requires zero upfront costs. This means you don’t have to spend a lot of money on your solar installation.
With solar leasing, you can start saving on your energy bill right away without having to break the bank.
Leasing Company Caters to Repairs and Maintenance
The company that leases it to you is responsible for maintaining and repairing the system. This can be a great relief, especially if you’re not handy with tools.
As a result, you can avoid the hassle and expense of repairing your solar panel system. What’s more, the leasing company will also monitor your system to ensure that it’s running as it should.
Predictable Monthly Payments
Predictable monthly payments make it easier to budget for your solar panel system. With a solar lease, you’ll know exactly how much you need to pay each month. This can help avoid any financial surprises down the road.
Cons of Solar Leasing
While solar leasing has its fair share of advantages, it’s not without its drawbacks. Here are a few cons of leasing solar panels.
You’ll Pay More for the Panels in the Long Run
While you may not have to pay any upfront costs, you’ll end up paying more for the panels in the long run. This is because you’re only making payments for the panels and not the solar installation.
As a result, you’ll end up paying more for your solar panel system in the long run.
Limited Contractual Period
Most solar leases have a contractual period of 20 years. This means you’ll be locked into the lease for the next two decades.
While this may not be a big deal for some people, it can be a hassle if you move or need to sell your home before the end of the lease. If you do need to get out of the lease, you may have to pay a hefty fee as a penalty.
Solar Financing Simplified
Whether you should buy or lease solar panels depends on your specific situation.
With so many solar financing options, you have no excuse not to get solar panels for your home or business. Join the solar energy movement and save a bundle in energy costs while doing the environment a huge solid.
When picking a solar panel company, ensure you do your due diligence to find the best company for your need. If you’re going solar, make sure you go all the way for the greatest effect.
For more informative content, check out the other posts on the site.