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The cost of solar panels has come down greatly in recent years, prompting more homeowners to consider going solar. Properly sized panels can slash energy expenses by 50% or more and generate extra income during peak months. These are just two of many benefits of adding solar panels to your home. One of the first decisions you must make is whether to buy or lease the panels.
What Are the Advantages of Leasing Solar Panels?
Solar panel leases offer many advantages, including:
No upfront cost. Solar panels cost tens of thousands of dollars to install, even with a decrease in manufacturing and installation costs. Therefore, many homeowners who would benefit from lowered utility expenses do not have enough money to buy panels outright. Leasing puts solar panels within everyone's reach.
Some utility savings. Depending on the company you choose to lease panels from, you will receive a 10% to 20% reduction on your electricity costs. While the savings are not as great as when you own solar panels, it's better than nothing. When you can pay nothing up front, lower your energy expenses, and make green home improvements, what's not to love?
You don't have any maintenance costs. When you own solar panels, you need to pay for routine maintenance and repair. When you lease solar panels, the company takes care of this for you, so you never have to worry about unexpected repair costs.
What Are the Disadvantages of Leasing Solar Panels?
The downside of leasing solar panels relates primarily to their inability to provide value as a long-term investment. Consider the following:
You won't get the tax credit. Federal tax credits for green energy improvements are a big incentive to go solar. However, when you lease panels, you will not get the credit, which can run up to 30%. The company that owns the panels will get it on your behalf.
You save less and own nothing. If you plan to live in your home for decades to come, you may be better off purchasing solar panels. You'll save the most money on your utility bill and begin paying off the installation cost right away. Once you recoup your initial expenses, you can start earning money from your home and even sell extra power back to the grid. With leased solar panels, you own nothing at the end of the lease term and save less money over the long run than if you were to buy the panels.
If you decide that leasing solar panels is a good option for you, ask several companies for quotes. Then review the fine print of their contract to see how much you can expect to save on your utility bill. Find out what happens if you want to sell your home. Will the new homeowners assume the solar lease? Will you be responsible for a lease termination fee or any fees associated with removing the panels? Then weigh the pros and cons to decide on your own whether buying or leasing solar panels meets your needs.
