Solar Panels and wind turbines are the future. You can run from them as much as you want but soon they will be the norm. Clean and green energy is here to stay and be the way of the future. So those that want to wait for them to be forced on them can continue to do so while those that wish to get a solar panel for their home can check out leasing solar panels vs buying comparison as we figure out which of the two is better. And to do so we will be looking at the pros and cons of leasing vs buying solar panels among other things so that by the end of the article we have a solid answer for you.
Leasing Solar Panels Vs Buying: What is Better?
It’s not like you don’t have the option of buying a solar panel outright it’s just that the system is a bit too costly for most people to buy at once and so finance options like solar loans and leases are available to them. Solar loans and leases are similar to normal loans and leases but are taken and can be specifically used only towards buying or funding a solar panel. Now since we are concerned with finding out the differences between leasing solar panels vs buying let’s get going with the comparison.
Leasing a solar panel means getting a solar panel to get you off the grid. However, you just get to use the system, and the electricity it generates but you don’t become the owner of the system once the lease is over. On the other hand, buying a solar panel means paying the whole sum upfront and claiming ownership of the solar panel system. You outright own the panel and have gone off the grid and you also don’t have any monthly payments to make as you would if you took a solar lease or loan.
So when we compare these two options, there are differences in ownership, upfront costs, access to tax credits and SRECs, life savings, monthly bill amounts, maintenance, property value, and other stuff between the two. And more often than not it is buying a solar panel outright that poses as the better option. This is because you own the system now, get access to tax credits and SRECs, get access to net metering programs, have higher life savings, and get a low or no monthly energy bill as compared to a leased solar system owner.
Of course, you have the disadvantage of paying a huge upfront cost and are also responsible for the repair and maintenance of the solar panel but those are very small disadvantages as compared to the handful of advantages that the ownership of the system brings with itself. What’s more, is that a solar panel may cost less when purchased in one installment rather than when choosing to pay monthly installments which can take the cost of panels much higher than the original price. To choose the better option between leasing and buying solar panels, understanding the pros and cons of leasing vs buying solar panels is very important.
What are the Pros and Cons of Leasing Vs Buying Solar Panels?
You can surf the internet as much as you want and you would barely find an article or a person saying that leasing a solar panel is better than buying one but that should not cut short our detailed review and so keeping with the theme we would further elaborate on the differences between the two by looking at their pros and cons.
Buying a Solar Panel
1. Pros of Buying a Solar Panel
- In the long run, the cost of a solar panel is much cheaper when you make the payment in nine short than choosing to go with a monthly lease or loan payments that significantly increase the cost of the system.
- The best benefit has to be you become the owner of the system when you pay for it up-front.
- You qualify for tax incentives and other rebates which help you save a significant sum.
- An owned solar panel adds to the value of the property.
- You don’t need to worry about any sorry of monthly payments as you would with other financing options.
2. Cons of Buying a Solar Panel
- Since you are buying the solar panel outright you need to pay a hefty sum at once which might not be possible for everyone.
- The burden of repair and maintenance charges falls on your shoulder.
Also Read: 3 Pros and Cons of Offshore Wind Farms
Leasing a Solar Panel
1. Pros of Leasing a Solar Panel
- A solar lease may come with a very low or almost no upfront cost and thereby helping your pocket.
- The responsibility of maintenance of the solar panel falls on the company that owns the solar panels.
2. Cons of Leasing a Solar Panel
- The ownership of the system is not with you even after paying much more money for the system.
- The monthly payments more often than not increase every year adding extra burden to your pocket.
- The lease lasts for a long time which is usually 20 to 25 years.
- The savings that you make on your electricity bill is more or less negated by the monthly payments.
- You don’t qualify for the net metering program, or for the tax credits.
Even before looking at the pros and cons of leasing solar panels vs buying, we knew that the latter was the better option among the two. And now that we have reiterated the point let’s move to the next point of distinction.
Solar Lease Vs Buy Calculator: How to Choose Between the Two?
If you still have some reservations about going with an upfront purchase and want to consider going for a lease then that is something you can consider. Quite a few people might not want to own the system or may have other reasons for the same. And so you can use a calculator to calculate the difference in prices under either method. This way you can also plan your plan of action.
Leasing a solar panel doesn’t need you to make any sort of down payment in most cases but with buying that is not the case. Without applying any rebates or incentives a solar panel can cost you anywhere between 7 to 20 thousand dollars or even more. With a lease, the payment duration may go on for 20 or even 25 years in which period the total pay might hit the total of 40k dollars or more.
The difference is significant when considering leasing solar panels vs buying and that can be put into perspective once you use a calculator and work out the final figures payable in both cases. Buying a solar panel might have a higher upfront cost but in the end, you’ll own the panel, thus it will be a cheaper option as well as a better decision in a lot of ways.
Also Read: What is Meant by Solar Loan Calculator?
Does Solar Lease Count as Debt?
Any option apart from buying a solar panel is a way of financing a solar panel be it leasing or taking a loan. And when you get the finance from someone else it is as good as debt as you need to pay back this amount. So if you ask does a solar lease count as a debt then the answer is yes. And for this reason, your credit score might be affected if you are not making your monthly payments on time.
When you compare leasing solar panels vs buying or even loans then lease offers the least benefit among the three. Getting a PPA is similar to leasing a solar panel while solar loans are similar to buying solar panels outright. Either pair share the pros and cons. Also, solar loans are second when it comes to saving money in the long run wheel solar lease are by far the most expensive option.
A solar loan and lease might be the same in the sense that they both give you instant savings which is something you don’t get when you buy a solar panel outright. But then again taking a solar loan again gives you ownership of the panel which just as buying outright adds value to your property. Also, loans and outright purchases both help you qualify for tax credits and other incentives.
So yes it is safe to say that signing for a solar lease is signing for debt, however, you can use it to improve your credit score at the very least. Also, it is the safest route to take for anyone who may not have that kind of money to make a one-shot payment. And so even though buying might be a better option some people can still opt to go for a lease for the small benefits offered by this finance option. Let’s finally find out between leasing solar panels vs buying which is better.
Leasing Solar Panels Vs Buying Which is Better?
The only benefits of leasing solar panels are that they may involve no upfront costs, you start making net savings immediately, and you don’t have to pay any repair or maintenance charges. However, a solar panel may not even need much maintenance during its lifetime which almost negates this factor. Also, the savings over the lifetime offered by buying a solar panel are much more than what you make by leasing a solar panel. So there is just one clear benefit to leasing a solar panel.
A home becomes difficult to sell when you have a leased solar panel as you either need to pay off the remaining lease to clear it or need to convince the new owner of the house to transfer it to their name which is not easy. On the other hand, a purchased solar panel or even a solar panel purchase by obtaining a loan is known to add more than decent value to the property which can help you make a significant profit.
Also, the solar lease includes an escalator factor which means that the price of your monthly payments goes up each year and so your savings on your utility bill goes down each year, and your monthly payments start looking like your electricity bill by the time the end of term comes up. Considering all these points you will be able to answer that of leasing solar panels vs buying which is better.
|Cash from Pocket
|First Year Savings
|Greatest Lifetime Saving
|Own the Equipment
|Value added to Home
And so with that, we reach the end of leasing solar panels vs buying comparison and our verdict is that buying a solar panel is without a doubt the better option among the two. However, you can use a solar lease vs buy calculator and work out the payments for you and go with the option that suits your condition better. If a lease or buying doesn’t work for you then you also can consider getting a solar loan or signing up for a PPA.
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