When it comes to having solar panels on your home, there are two different options: leasing and owning.
Whether you choose to do one or the other is ultimately up to you and whether your budget allows you to lease or buy. Sometimes it’s cheaper to do one vs. the other.
Today we’re going to break down some of the differences so that you know what to expect from both leasing and buying solar panels. If you’re wondering if solar is really worth it, then this post is for you.
What’s the Difference Between Leasing and Buying?
A lot of consumers ask us what the difference is, so let’s dive in. At the highest point, the biggest difference between leasing and buying is who owns the solar panels. When you lease solar panels, you’re choosing to rent them from the company that’s installing them. That means you’ll see the benefit of solar electricity for your home, but you’ll need to continue making a monthly leasing payment. And when you want to be done leasing, the company will come and take the solar panels back.
When you purchase solar panels, you’ll own them outright. This means that when you finish paying them off or if you pay for them in full, you won’t need to worry about continuing to pay for them. Instead, you get to continue enjoying the benefits of the solar panels at no cost to you. Note that you still own the solar panels even if you need to take a loan out.
Leasing Solar Panels: Pros and Cons
Some homeowners decide that leasing is their best option. Sometimes that’s a financial decision, and other times, it may be impacted by where they live. Nonetheless, there are certainly some benefits as well as downsides to leasing solar panels instead of buying them.
We’re going to break down both the pros and cons so that you feel comfortable making the best decision for the solar panels that you want on your home.
Leasing Solar Panels: Pros
The biggest benefit to leasing solar panels is that you’ll get many of the perks that come with owning solar panels, but you won’t have to put forward the capital to purchase them. For example, if you want to install a home solar system that comes close to reaching your home’s full electricity pull, the cost can be substantial. But, when you choose to lease the solar panels instead of buying them, you won’t need to worry as much about that cost.
Homeowners also will be able to ignore any maintenance costs or updates that their solar panels need, minimal as those may be. Instead, they can call the company they’re leasing from to help take care of any issues and keep their system running smoothly.
- No money down.
- It helps to supplement your electricity usage and bill.
- No maintenance – the solar company takes care of it.
Leasing Solar Panels: Cons
Some of the downsides to leasing solar panels instead of buying them directly are essentially the exact opposite of each benefit. For one, while you won’t need to put down a lot of money when you initially start renting or leasing the panels, you will need to continue paying for them monthly until the lease or contract is up. In many cases, this can be 20 – 25 years for the duration of the contract.
When you choose to lease solar panels, you won’t be eligible for the tax credits or local incentives that come with purchasing solar panels. Many homeowners will use the federal and state tax credit to help pay for the solar panels. You also won’t be able to see the investment of solar panels ever pay for themselves when you sell your property or own the panels outright. Unfortunately, when you lease, the value of the solar panels on your home won’t be considered in the home’s sale price.
- Homeowners don’t own the panels.
- Doesn’t add value to your home.
- Homeowners miss out on federal tax credit and local incentives.
- Difficult installation process without long-lasting benefits.
Buying Solar Panels: Pros and Cons
Just like leasing, there are pros and cons to buying solar panels as well. But, at the end of the day, you will own the solar panels, and for some homeowners, that’s all they need to know. When you’re able to put money towards something that turns out to be an investment for your family and the future of your home, most homeowners see that as a positive.
For this reason, at Sun Badger Solar, we always encourage homeowners to take steps towards purchasing or owning their solar energy system. There’s a lot that goes into owning a solar energy system, but you’ll never regret investing in something like solar panels or renewable energy.
Buying Solar Panels: Pros
One of the obvious benefits of buying solar panels is that you’ll own the panels and thus be able to generate electricity without a monthly cost associated with the panels. This should be a huge incentive and benefit for you as a homeowner.
Another advantage is the tax credit you can use in the coming year’s taxes. The federal income tax credit is currently 26% through at least the end of 2022. The sooner you choose to install solar on your home, the greater the tax credit you’ll receive for doing so.
Homeowners will also be investing in the value of their homes. While there is some minor maintenance, you will be increasing the value of your home. Research done by Zillow shows that homes with solar panels can increase their value by up to 4.1% based on where they’re located. That’s a huge advantage and a great investment into the value of your home.
- Own the solar panels for electricity with no monthly payment for solar panels.
- Receive the federal tax credit and be eligible for state and local incentives.
- Own the solar panels and add value to your home when you choose to sell it.
Buying Solar Panels: Cons
There are still some downsides to buying solar panels. One of the biggest struggles that many homeowners will face when it comes to buying solar panels is the cost associated with them. While yes, there are a number of ways that you can finance solar panels or pay for them without having to put forward a large amount of your personal capital, there is some investment required.
Solar panels will need some regular maintenance. You won’t need to worry too much about keeping them clean, but you should regularly ensure that they’re free of leaves and other debris that can build up on your roof. Trees can grow a lot over the lifetime of a solar panel system, meaning that at some point, you may need to trim trees in order to keep the sun shining on your solar panels.
If an element of your system wears out, you’ll be responsible. Take this downside with a grain of salt because it’s not something that you’ll need to worry much about. Most solar panel systems and their components have a warranty that lasts 25 – 30 years. But some specific components won’t have quite as long of a lifespan as the panels themselves. Your solar partner is always going to be willing to come back and replace these components at as small of a cost as possible. But you should be aware that there is that possibility.
- Solar panel systems are expensive and will require a significant amount of capital.
- Homeowners are responsible for all regular maintenance and keeping the solar panels operating smoothly.
- Any components that fail outside of the warranty become the homeowner’s responsibility to pay for.
Finding the Right Solar Partner
Finding the right solar partner is critical to help you not only install your solar panels but to keep them running for years to come. Sun Badger Solar could be that partner for you. As solar experts serving Minnesota, Wisconsin, Illinois, and Florida, we’re ready to bring out the best so that you get everything you need out of a solar energy system.
Reach out to Sun Badger today to learn more about solar panels, their benefits, and whether or not solar is right for you. Our solar sales team is ready to answer your questions and ensure that you’re well taken care of.