Owning VS Leasing Solar Panels
The decision on how to finance your solar panel system hinges on your specific financial goals. The main practical difference between buying and leasing a solar panel system lies in ownership. Buying: If you purchase a solar panel system, you own it outright (if purchasing with cash) or after repaying your solar loan. Leasing or Power Purchase Agreement (PPA): With a lease or PPA, a third party owns the solar panel system. This distinction impacts the cost, maintenance, terms, financial offsets, and savings/returns on investment of your solar panel system
Buying solar panels offers significant advantages if you're aiming to:
Be the owner of your solar panel system.
Maximize the financial benefits of solar.
When you purchase solar panels outright, you'll experience greater long-term savings. This is because you won't be making monthly payments to your solar provider for years; instead, you'll own the system right from the start. Consequently, you'll achieve overall savings sooner compared to leasing your solar panel system. Additionally, by utilizing the power produced by your solar panels, you can reduce or even eliminate your electric bill.
It's worth noting that you can also finance your solar panels through a solar loan, which still provides you with the benefits of home equity and tax incentives associated with owning solar panels, without the significant upfront cost of outright ownership.
To further maximize the financial benefits of solar, you can claim the 30% federal investment tax credit (ITC), provided you meet the eligibility criteria based on your tax liability. This tax credit can substantially reduce your solar panel costs.
Moreover, you may qualify for state or local incentives such as SREC credits, which, depending on your state, could reimburse you for up to 50% of your system cost
Leasing Solar Panels:
The attraction of leasing lies in receiving a new solar installation without the burden of a loan. Instead, a third-party lessor finances the entire project - covering parts, labor, maintenance, and monitoring entirely free of charge for you. In return, you commit to paying for the clean solar electricity generated by your "leased" panels. These monthly payments are typically lower than what your utility company charges for grid electricity, resulting in immediate savings on your energy bills. Additionally, you enjoy the environmental benefits of solar power, effectively reducing your carbon footprint.
Typically, solar leasing agreements span 25 years. At the end of the contract, you'll own the system and continue to benefit from the power it produces for the remainder of its lifetime.
Whether you choose to buy or lease solar panels, you're contributing positively to both the environment and your finances. If you have the financial means to purchase solar panels outright or secure financing for a solar loan, the benefits outweigh those of a solar lease. Buying enables you to leverage all available solar panel incentives, become the owner (and potential seller) of the energy you produce, and realize significantly greater long-term savings.
Which Solar Finance Option isThe Right Fit For You?
Complete our proposal request form, and we'll connect you with a local specialist who will guide you through the details to determine the best option for your financial goals.
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