As the cost to purchase solar energy slowly declines, more and more energy companies are buying and leasing these systems to residential and business customers. For those who want to use 100 percent green energy, leasing a system can be a cheaper option than purchasing an entire array of solar panels. If you’re thinking about leasing a solar energy system, make sure you keep these facts in mind as you make your decision.
Why lease a solar system?
Pay less up front. When you lease solar panels instead of buying them outright, you have to pay little money up front. The cost to purchase a solar energy system and have it installed can add up to thousands of dollars. In contrast, leasing a solar system may require just a small upfront fee. Some solar leasing companies even offer zero-down options, making solar energy leasing an inexpensive option. You just have to pay a monthly fee for the use of the panels, which could be less than what you pay for electricity every month.
Don’t worry about repairs. Since you don’t own the solar panels, you won’t be held responsible for making repairs. If there’s ever a problem with your solar energy system, you just have to get ahold of the system’s owner so it can make the necessary repairs or replace the panels at no cost to you.
The drawbacks to solar leasing
You won’t make your money back. If you purchase a solar system, you will have to pay a large amount of money up front. Sure, the systems have gone down in price over the past few years, but you might still have to spend thousands of dollars to power your home. But if you think about the value of the system over time, it might be a better financial decision to buy solar panels outright. You see, a solar system can help lower, or even eliminate, your electricity bill. Plus, you can often sell extra solar power to your utility and make a profit. In a few years, your solar system should pay for itself in energy savings. And for the remainder of its lifetime, it will only generate a profit for you. If you lease solar panels, you will always pay a monthly fee with no end in sight.
You don’t qualify for tax credits. You’ve probably heard that federal and state tax credits can help ease the cost of installing solar panels. But if you don’t actually own the panels, the credits don’t apply to you. Instead, the energy company that owns the panels is eligible to apply for a 30 percent federal tax credit, which is usually worth thousands of dollars for a typical home.
Selling your home could be more difficult. A typical solar panel lease can last 20 years or longer. If you’re planning to sell your home during that time, you may have some difficulty getting potential buyers interested. It’s true that green energy is a huge benefit for house hunters today, but the price for leased solar panels can’t be lumped into the price of the home. Instead, potential buyers have to be willing to assume your solar panel lease and have to qualify for the financing of the panels on top of the mortgage loan.