Now That I Have Decided To Go Solar, Is It Better To Buy Or Lease?
Have you recently made the decision to harness the clean energy of the sun and “go solar?” If so, congratulations, it’s a wonderful decision that is great for the environment, the economy and your pocket-book. One of the very next questions you will face is whether to buy a system or lease one.
Many residential solar installation companies like to push leasing. Some will offer “no money down’ or they will charge $1,000 to $3,000 (depending on the size of the system) up front to install the solar panels, and then lock the homeowner into a 20 year contract, where they will have to pay rent every single month for 20 years. For example, if a homeowner has a monthly electric bill of $250, he or she might pay the solar company $125 a month to rent the solar panels and the homeowner’s electric bill would drop to around $100. All in all, he or she would be saving around $25 a month by renting solar panels. This is an example using a system that only partially offsets the homeowner’s electric bill. A large enough system could eliminate the entire electric bill but the monthly rent would be larger and the savings to the homeowner still minimal. Also, it’s important to be aware that solar leases include an approximate 3% annual increase causing the homeowner’s rent payment to increase every single year over the 20 year contract period. These leasing companies also emphasize that they will install the system, monitor and take care of all maintenance. All you have to do is sit back, feel good about the environmental benefits, save money and leave the rest to them. Sounds pretty good, huh? Well there is a whole lot more to the story.
It’s very important to understand the dynamics of actually purchasing a system (remember the solar company is the purchaser when you lease) before making your final decision. A solar system will not only pay for itself in as little as 5 to 10 years, but will continue to make you money over its 35 to 40 year expected life span. Remember, after the system has paid for itself the owner has no electric bill or one that is much lower so the savings grow and grow each year as energy costs rise. This is one of the primary reasons why residential solar leasing companies want you to let them use your roof or your property. Huge utility company rebates are available in many states, some as high as $2,000.00 per kilowatt. With a solar lease you won’t receive a rebate because you are not buying the system. The leasing company will get the rebate because they will own the system that you’ll be making payments on for the next 20 years. This is another reason why residential solar lease companies want you to let them use your roof or your property. The Federal government is offering a 26% tax credit (as of Jan 1st, 2020) that’s currently available for the installation of a solar electric system on your home. With a solar lease you won’t receive the 26% federal tax credit either because you are not buying the system. The leasing company will get the tax credit because they will own the system that you’ll be making payments on for the next 20 years. Yep, you guessed it; this is another reason why residential solar lease companies want you to let them use your roof or your property. A properly installed solar system requires almost no maintenance, by the way, other than a good rinsing upon occasion to remove dust and debris. Solar modules are covered under a 25 year factory warranty and inverters are covered by a 10 to 25 year factory warranty. Also, purchasing a solar system substantially increases the value of your property whereas a lease is a liability in the eyes of someone looking to purchase your home.
All in all it is easy to see that the owner, whether it is you or a leasing/installation company, is the one who gets the risk free annual return on investment of 10-20%! Why not let it be you? If the concept of little or no money down is attractive to you, do the math and it will become clear that financing the purchase of your solar system with little or no money down makes a whole lot more financial sense than leasing. It sure would be great to change over to clean, renewable energy and put a nice amount of money in your pocket at the same time!
Please check out our website at www.altewindandsolar.com and our Facebook page at http://www.facebook.com/pages/Alt-E-Wind-Solar-Ltd/196202797091314 or give us a call at 970.482.SOLAR (7652).