Solar panels are a worthy investment as energy prices continue to rise and good stewardship of our planet becomes increasingly important. But even if you’re ready to switch to solar, there’s still one crucial decision you must make: whether to purchase or lease your system for your home or business. Both options have pros and cons, but purchasing or financing a solar array packs far more benefits than leasing. Here’s a look at each option to help you make the right decision.
Leasing Solar
Pros:
- Lower upfront cost.
- No maintenance or repair costs.
Cons:
- You don’t own the system – you won’t see any appreciation in the value of the system.
- You miss out on tax breaks and other solar incentives – all the benefits go straight to the financial institution, not the customer.
- Some leasing contracts require you to pay higher electricity rates than you would if you owned your system.
- If you decide to terminate your lease early, you may have to pay a fee.
- Leased solar panels can complicate a real estate transaction, making the home harder to sell.
Buying Solar
Pros:
- You own the system, so you’ll see the full appreciation of the system’s value if the value of solar panels goes up.
- Lower monthly energy bills. Once the cost of the system is paid off, your energy is free!
- Solar panels can increase the value of your home.
- Access to tax rebates and solar incentives.
- Higher lifetime savings.
- Most solar installers, including Tampa Bay Solar, offer warranties on all installations. Tampa Bay Solar offers a 20-year warranty.
Cons:
- Higher upfront cost if not financing.
What You Lose By Leasing
When leasing a solar energy system, homeowners or businesses give up the benefits of ownership. These benefits include receiving government incentives, tax credits, and rebates – including the 30% federal tax credit through the Inflation Reduction Act, Solar Renewable Energy Certificates (SRECs), net metering, and more.
Leasing is often compared to renting an apartment, where the tenant pays for the right to use, but not own, the property. As such, the leasing company reaps the rewards of any government incentives or credits. Additionally, if you’re a homeowner who decides to sell your house later, you must either transfer the lease agreement or pay off the remainder of the lease. This can present a challenge if the lease payments become too burdensome for the new homeowner or if they prefer a home without solar.
Why Buying Solar is Thinking Bright
Many experts, including our team here at Tampa Bay Solar, recommend purchasing a solar system over leasing, primarily due to the benefits of ownership. When owning the equipment, homeowners or businesses have control over their energy costs, while those leasing are at the mercy of the leasing company’s rate increases and contract terms. Additionally, a home or business with owned solar panels has more value than one with leased panels, providing free energy and a higher return on investment than a leased system.
Purchasing a solar array doesn’t mean you’re responsible for the total upfront cost either. Plenty of financing partners offer solar loans with zero-down terms, minimizing your initial financial burden and making it easy to work toward fully owning your solar array.
The Joys of Solar Ownership
In conclusion, purchasing a solar system is the better option for most homeowners and businesses. While leasing can be a good option for some people, it has many drawbacks, such as no system ownership and ineligibility for any tax breaks or financial incentives. Purchasing a solar system gives you access to incentives and higher lifetime savings on your electricity bills. Additionally, you will build equity in your home or building and enjoy the peace of mind that comes with knowing that you’re doing your part to protect the environment.
If you’re considering going solar, we encourage you to do your research and talk to a qualified solar professional on our Tampa Bay Solar team to learn more about the benefits of purchasing a solar system and how to get started.
