It’s no mystery that solar installations can be quite expensive, especially if you want the latest technology. And while purchasing solar panels gives you a great return on investment, not everybody has the cash on hand to cover the upfront costs of switching to solar.
As a result, many homeowners are looking for alternative financing options, such as solar leases. However, even though leasing can sound like the ideal solution, it can end up costing you more than just money. Fortunately, we are here to take a look at both options and figure out the real cost of leasing vs buying solar panels.
Ways to Get Solar Panels
To put it simply, there are two main ways to switch to solar panels. On the one hand, you can pay upfront for the entire solar energy system. On the other hand, leasing can make solar panels more accessible by lowering or removing the initial costs entirely.
Generally speaking, buying your own solar panels is by far the best option. Yet, it is also the most expensive, as you will end up paying anywhere between $15,000 and $20,000. Even so, thanks to the money you save on electrical bills, you can get your investment back in a couple of months or years. And best of all, there are no hidden fees or fine print, meaning that you know exactly what you are paying for.
When you choose a solar lease or solar power purchase agreement, you don’t have to pay any upfront costs to install solar panels on your roof. At first glance, that might sound incredible. After all, who doesn’t want free solar panels?
However, you don’t actually own the panels, instead, the solar company that installed them does. Additionally, while you don’t pay for the panels upfront, you will have to pay a monthly lease payment to the solar company. In other words, you are borrowing another company’s solar panel in exchange for a monthly fee.
What You Can Gain By Leasing
No Maintenance Costs
Although solar panels are low-maintenance, they are not entirely maintenance-free, at least if you purchase them yourself. With a lease, any problems and regular maintenance are covered by the third-party owner. Therefore, the only maintenance you have to do is occasionally brush off debris from the panels.
No Upfront Costs
As previously mentioned, depending on the specific solar lease, you could get solar panels for little to no money. And while you will have to pay a monthly fee, you will also save money on your utility bill.
What You Can Lose By Leasing
The Home Becomes Hard to Sell
Even though solar panels usually add value to your home, leased solar panels can make real estate transactions more difficult. Simply put, if the lease cannot be transferred to the new owner, you may have to pay to break it. What’s even worse is that you might be unable to have the panels moved, further complicating the transaction.
Ineligible for Incentives and Rebates
Since you don’t own the solar system, solar leases do not qualify for private or governmental rebates or incentives. Keep in mind that these cash incentives may be enough to help you purchase solar panels on your own.
What You Can Gain By Purchasing
It doesn’t matter if you buy or lease solar panels, as you can save money through utility bills. However, leasing will have you pay a monthly fee, which can reduce the overall savings. So, if you plan to use solar panels for decades to come, you will save more money by purchasing them upfront.
Eligible for Incentives and Rebates
As the owner of your solar panels, you can qualify for private or governmental incentives. Not only can these drastically reduce the cost of solar energy systems, but they can also help you save more money in the long run.
What You Can Lose By Purchasing
Depending on the size of your solar energy system, you will have to invest a considerable amount of money. Luckily, thanks to long-term savings, you will be able to get it back in a couple of months or years.
Which One Should You Go For?
At the end of the day, what option you choose depends solely on your personal preference. For instance, if you don’t have the money necessary for solar panels but still want to take advantage of reducing your utility bills, leasing is the way to go. In contrast, while the initial investment can be quite hefty, the panels will eventually pay for themselves when you purchase them upfront. So make sure to take everything into consideration when deciding whether to buy or lease solar panels.