Tag Archives: leasing solar panels

Should You Buy vs Lease Your Solar Panels?

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Should you buy or lease your solar panel system? You already know that choosing solar has significant financial returns and environmental benefits, but there are questions you have to answer before you start to see your reader run backwards. Most importantly, how will you finance your system? There are solutions for every budget. There are two main financing options available when installing a solar energy system. One way is to buy the system like buying a house.

The other way is like renting an apartment. Both have benefits. Buying your system, is the best way to maximize your financial savings and returns. All the savings come straight to you. You can save between 40 % and 70 % over the lifetime of your solar panels.

Buying your system yourself, usually costs at least $10,000 to $20,000 after tax breaks and incentives. If you don’t have that kind of capital, many lending institutions around the country offer loans that are specific to going solar.

With loans, you can own your system with zero money down. If you own your solar panels, you can take advantage of the ITC, a federal tax credit that helps people pay for solar projects. The ITC lets you subtract 30 % of the cost of your system from your tax bill.

If your tax bill is smaller than the value of the ITC for your system, leasing can be a great option. Leasing is also ideal if you don’t want to pay the upfront costs or take out a loan or if your credit score is below 650.

When you lease your system, you sign an agreement with the company that owns the solar panels. In exchange for a set monthly payment, they install the panels on your property, for you to use and you enjoy the electricity produced for the length of the contract. Solar panels are very durable and require little to no maintenance during their 30 year lifespan. However, if you’re worried about maintenance, a solar lease might be a better option for you.

The company that owns the panels will be responsible for any repairs and they’ll come out and give you a hand. Now you know the different benefits of buying and leasing your solar energy system.

Got more questions? We’ve got the answers on our solar frequently asked questions.

Source : Youtube

The Pros and Cons of Solar Leases

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Welcome to the solar energy channel where you will get an honest inside look at all things solar. So in this video, we’re going to dive into the pros and cons of solar leases.  

I’m Charles. And I’m Warren. So Warren help us understand what are solar leases. Sure, so solar leases take on a variety of different forms.

Sometimes they’re called power purchase agreements and sometimes they’re leases but either way structured slightly differently but they are where another company or entity owns the solar system and you basically rent or you pay for the electricity that’s produced from those systems.

So one of the pros of that is then that I don’t have to lay out the cash to buy the solar array. – Correct. The great thing about solar leases is that you don’t have to come up with an upfront investment.

Somebody else is going to pay for the solar on your roof. And another approach to that is that they’re also responsible for the maintenance and the insurance of that solar array, while you should still have insurance on your property to cover you, the company who owns or installs that a solar system for you is going to maintain it and insure it as well.

Yep, so there certainly are some cons though, to giving up that right of ownership. And one of those is you do not get the incentives. Yes, so over the long-term, you’re better off owning the system from a financial perspective.

However, if you’re not in a situation to invest or to buy solar, you might be able to save money from the get-go. One of the great things about leases is that many of them offer you an introductory rate that is lower than what you’re currently paying for electricity.

Yeah the reality of that is if you look as a industry standard on the lease, we are seeing 3 to 4% inflation rates on that lease rate over the life of the lease, which may be 10, 15 and 20 years. – And that’s the true trap with leases is that you’ve got to look for, is what is that escalator? You might be starting off with the slightly lower introductory rate, but it’s going to increase at 3 or 4% a year.

And then in five or 10 years from now, you might be paying more for your solar than you would have had you stayed with your utility company. Yep, so the thing again you want to look for is what is that inflation rate per kilowatt hour year over year? Because you do not want to be spending more in 10, 15, 20 years than you would need to, if you were purchasing your power from the utility.

Absolutely and there’s another very important point that you need to be aware of with solar leases is that if you want to sell your home or your property, you need to find a buyer that’s willing to assume that lease.

And so realtors might find that to be a burden or a liability on the sale because you got to find a very specific buyer for that property. And the reality is if you have a lease and you want to move, you’re not going to take that solar array with you and keep paying your lease payment and put it on the new property.

The leasing company is not going to want to pay, to remove and reinstall it. Absolutely, and it’s usually cost prohibitive and they won’t let you get out of those contracts. But if you’d like to learn more about the real estate side of things, we do have additional videos and blogs on that.

So in summary, if you’re looking to save the most amount of money over time, buying your own solar project is going to be the best way to go. However, if you do not have the money to make that purchase, a solar lease could be a good option for you.

You do want to, however, make sure that you’re aware of those pitfalls that we discussed in this video. – Thanks for watching. If you enjoy this information, be sure to like this video and subscribe to our channel for future releases.

Source : Youtube