In this article, we will summarize the different financing options available from our solar partners and give you both the benefits and careful considerations when thinking about whether you should lease or buy solar panels.
A LGCY Power energy consultant can help you choose what financing option is right for you – contact us today!
Leasing Solar Panels
When it comes to leases, you have a couple of options* to choose from:
- Leasing – this means paying a fixed monthly “rent” to use the system and take advantage of the energy generated; you may be given an option for a prepaid lease, where you pay all of your contract up-front and skip the worry of monthly payments
- Power Purchase Agreement or PPA – instead of paying to lease the system, you buy the energy the system generates from the leasing company
Pros and Cons of Leasing
A lease often requires no money down to get started, which can be attractive to many looking to get into solar and start saving. PPAs generally have a cheaper cost per kilowatt-hour compared to what your utility may be charging. And maintaining the system is covered by the leasing company, meaning you don’t have to worry about equipment failure.
Some people are wary of signing a long-term contract, especially when the cost of panels themselves are going down. If you should need to move, a lease may complicate selling your home if the new owner does not want to take over the lease. Additionally, the benefits of tax credits and incentives may go directly to the lease company.
Buying Solar Panels
Generally, when purchasing solar panels for your home, you can do one of the following:
- Take out a loan and finance through a loan provider, or
- Pay up-front in cash to the installer
Pros and Cons of Purchasing
Although there is an initial upfront cost, you may save more over the life of the system by purchasing rather than leasing. Additionally, you own the panels and the system and can take advantage of any tax credits or incentives available to you. Plus, your home value goes up!
Most people do not have the financial capital to fully pay for a system upfront, which means taking out a loan and paying moderate interest over the same length of time as a lease. You will be responsible for maintaining the system once it is installed, including repairs or fixes outside the warranties on the equipment or by the manufacturer.
* Not available in all states or markets where LGCY Power or our installation partners are located