Should You Purchase or Lease Your Solar Panels?

The question to purchase your solar panels or lease them has been around for years. Solar Negotiators is breaking down the benefits of each option for those looking to move forward with a solar contract. A common misconception about is that you must have cash on hand to invest in a solar purchase. Similar to leasing, there are options that include no out-of-pocket cost. Both options also will offer a solar manufacturer warranty to cover performance, defects, panel integrity, and possibly environmental factors that can cause premature wear. Let’s review some of the main differences in the two options homeowners have for solar installation. 

Solar Lease vs. Purchase

Purchasing:

  • Can be overlooked because people are under the impression that you must have cash on hand to invest. Similar to leasing, there are options that include no out-of-pocket cost. 
  • The great thing about financing your solar project is that it is under your terms. Our sales consultants work with you to build custom financial plans. This way, you’re able to pay off your system as soon as you’re able while keeping your monthly payments lower than your current energy bill. 
  • Because your monthly costs will be reduced, this zero-money down option means instant savings.
  • Can avoid the responsibility of maintenance and repairs to the solar system.

Leasing:

  • Can oftentimes be as long as 20-25 years, and solar loans offer much shorter terms.
    • With a lease and PPA’s, you will have set monthly payments that increase anywhere from 1-3% annually. 
    • There are designated points during your contract that the contractor will allow a “buy-out”. A buyout is when you purchase the system for then market value. 
    • Unfortunately, the majority of leasing companies will not allow a buy out before 5 years of ownership, because they want to take advantage of the full depreciation on your system.

Both options, whether you’re leasing or purchasing, will offer a manufacturer warranty to cover performance, defects, panel integrity, and possibly environmental factors that can cause premature wear. However, it is the responsibility of the homeowner to identify these issues so that it doesn’t affect long-term savings (low production causes higher bills).

Why Owning is Your Best Option

What you will pay in energy costs over ten years is higher than the cost of financing a solar system. If your average bill is $350, in ten years you will pay $42,000 (ignoring the annual rate increase). Our company can build you a system to offset 100% of your monthly power bill for much less than that.

There has never been a better time to go solar, and purchasing your system is the best route. Our CEO Chris Moran confirms, “Solar prices are less than half of what they were just four years ago. Additionally, the cost of electricity has gone up by almost 25% in the same period.” There are many financing options available, and it can be overwhelming. Consumers are frequently misled into thinking leasing their system is a better option because it is a less expensive. We’ve done the math, and purchasing a system will actually save you more in the long run.

Comparing Purchasing and Leasing Your System

The great thing about financing your solar project is that it is under your terms. Our sales consultants work with you to build custom financial plans. This way, you’re able to pay off your system as soon as you’re able, while keeping your monthly payments lower than your current energy bill. Because your monthly costs will be reduced, this $ 0 money down option means instant savings.

Leases can oftentimes be as long as 20-25 years, and solar loans offer much shorter terms. With a lease or PPA, you will have set monthly payments that increase anywhere from 1-3% annually. There are designated points during your contract that the contractor will allow a “buy-out”. A buyout is when you purchase the system for then market value. Unfortunately, the majority of leasing companies will not allow a buy out before 5 years of ownership, because they want to take advantage of the full depreciation on your system.

Overall, the decision is yours. We at Solar Negotiators hope we’ve provided you with the tools to make an informed decision about how to approach your solar project.

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We are breaking down the common questions about how your bills work with solar energy.
How Does Solar Billing Work?
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We are breaking down the common questions about how your bills work with solar energy.
How Does Solar Billing Work?