You have researched the different kinds of solar panels that are available, received answers to all of the important questions, preparing your house, and now you have a big decision to make: should you buy or lease a solar panel system? This question does not have one right answer since it will depend on a couple of crucial factors – which include your energy goals, living situation, and finances. However, we can help you deal with the larger questions by going over the advantages and disadvantages of each.
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Purchasing Solar Panels
When it comes to buying solar panels there are two different options: you can either pay cash and buy them outright or you can get a loan. When you get a loan, your lender will pay for the costs of the solar panel installation and then you will repay your lending company the way you would a mortgage.
A solar panel system on average costs from $15,000 up to $40,000. It will depend on how big your house is, the kind of solar panels you choose, the company that you buy from, and more. If you need a loan, interest rates range from three up to eight percent. Remember that there are several federal and state tax incentives that may dramatically lower your installation costs, which includes the 30% Residential Renewable Energy Tax Credit. Your system will have had to be purchased no later than December 31, 2016, in order to take advantage of the federal credit.
Purchasing solar panels is similar to an investment that has a guaranteed return. That is because your home’s value will increase when you install solar panels, and if you stay in your house for a couple of decades, you can gain the costs that you paid for your system back easily in the form of energy savings.
Since it is an investment to purchase a solar panel, you must make a significant upfront investment. If you pay for them outright, you will need to have $15,000 at least or the amount that is quoted to you for the system. Many families are not able to afford to pay that much in a single lump sum. If you instead can get a loan, then you will need to pay interest, which will add to how much your system costs.
Should I Buy A Solar System:
If you have the financial means, then the better option is to buy. Over time you will earn back whatever you pay, and the value of your home will increase if you decide to sell your house.
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Leasing Solar Panels
When it comes to leasing solar panels
, you have two options: You can get a solar power purchasing agreement (PPA) or a solar lease. PPAs and solar leases are basically the same thing, with one major difference. When you have a solar lease you agree to pay a certain fixed monthly amount as rent to use the solar energy system so that your energy bills are reduced. A PPA involves agreeing to buy the power that the system generates. Some companies enable you to select an option, but others only offer one option, like NRG.
Although a down payment is required by some companies, many will let you start with a zero down an agreement. This is similar to getting a loan for the system. There are several different factors that will determine how much your monthly fees are, including your credit score, your location, the company, and the amount of energy that you use. If you are leasing a system, then you won’t be eligible for any incentives or tax rebates.
When you lease solar panels, it allows you to immediately enjoy energy savings with just a small or no down payment. That is ideal if you would like to lower your energy bill but are unable to afford to buy your system outright or you cannot qualify to get a loan.
If you are planning on selling your house before your lease expires, there could definitely be some complications. You will need to persuade your prospective buyer to take your solar lease over. Otherwise, before you sell you will need to pay the lease off.
Should I Lease?
To keep things cost-efficient and simple, the better choice is to lease solar panels. You won’t need to pay a large amount of money upfront, worry how your tax return will be affected by the system, or fix the panels if anything goes wrong, or maintain them.
Compare the advantages and disadvantages of the two options with your financial situation and solar goals to determine whether the best option for you is to buy or lease. If you still aren’t sure which way to go, consult with a few solar panel companies, and have them make recommendations and provide you with quotes on both of the options. Which option you decide on, you will move one step closer towards your energy bill being reduced and the sustainability of your being improved.