By Tim Henderson
If you’ve decided to make a positive environmental impact and reduce your dependence on the power grid by installing solar panels at your home, congratulations.
Investing in solar panels is a solid choice, but you may have lots of questions when it comes to the technology, such as:
• Which types of panels are best for my home?
• What is the cost of a solar energy system?
• Should I buy or lease solar panels?
• How does a solar lease work, anyway?
Here at Sandbar Solar, we believe that buying is the best option for the majority of homeowners. Buying solar panels for your house means you’ll start saving money from day one. Here’s why.
As of 2015, California leads the country in both solar energy production and installation. And despite the demand for photovoltaic systems in our state, prices are steadily dropping.
According to the California Solar Energy Industries Association (SEIA), the cost of a solar energy system is down about 66 percent from 2010 prices. This means that solar energy systems are more affordable than ever. Now is the perfect time to invest in clean, renewable solar energy.
If you’re wondering whether you should buy vs lease solar panels, keep in mind that the biggest distinction between a solar panel lease and an outright purchase is the amount of savings.
If you own your home’s solar energy system, you’ll reduce your energy expenditures by between 40 and 70 percent over the system’s lifetime.
Those who lease solar panels, however, will see a fraction of those savings. You’ll pay about 10 – 30 percent less for energy than homeowners without solar when leasing.
Many homeowners consider the negligible cost reduction as one of the most glaring solar lease disadvantages.
As we’ve discussed, installing solar panels can help increase the value of your home while reducing your monthly expenditures over the life of your solar energy system. Most systems perform efficiently for at least 25 years.
If you’re looking to maximize the financial benefits of solar energy by taking advantage of tax credits, buying solar panels is a smart choice.
The federal Residential Renewable Energy Tax Credit offers a 30 percent incentive to homeowners with a solar- or wind-powered energy system in place. You can take advantage of this tax credit at least through 2019, when the percentage homeowners are allowed to claim will begin to drop.
When you buy instead of lease solar panels, you’ll also avoid the hassle of a middleman or having to pay back the lease over a number of years. What’s more, an outright purchase with cash may not be required.
Depending on your budget, credit score and the estimated cost of the system, there are plenty of loan options available.
Solar loans do not require home equity, and you can pay off the loan in just a few years using savings from your utility bill. Whereas, if you lease solar panels, your payments will continue, and most homeowners will see only marginal savings between their lease payment and utility costs.
Homeowners who may be on the fence about the true benefits of solar or who are concerned about the initial investment cost often consider a solar panel lease.
You may be swayed by the idea that solar panel maintenance costs are often negligible with a solar lease. The reality is, however, that maintenance costs incurred when you install a solar energy system are negligible. What’s more, a reliable solar energy company will provide maintenance services and long-term warranties to ensure no-hassle performance.
Despite the advantages of a solar lease, such as no upfront cost, buying is still typically the best option, for several reasons.
If you lease your home’s solar energy system, you will not qualify for any tax credits or incentives. Instead, the third party owner will receive all rebates associated with your solar energy system.
A solar panel lease can also be limiting if you decide to sell your home. Buyers will have to take on the existing solar lease, which may require a high credit score, or buy the lease outright. Both options are typically unattractive to would-be home buyers.
If you have ultimately decided that a lease is the best choice for you, make sure to do your research. Find a reputable solar company that can work with you throughout the leasing process, and be sure to read the clauses so that you fully understand the lease terms.
Fortunately for today’s California homeowner, you have more options than ever when it comes to solar energy system size, capacity and purchase price. Most solar energy providers can even refer you to financing professionals who can offer you a loan.
Sandbar Solar is a leading solar company in Santa Cruz, and we’re happy to work closely with homeowners in order to design and install the right system for your needs.
We’ll let you know about tax incentives and how to apply for energy credits, and we’ll give you all the facts when you’re choosing to buy vs lease solar panels. Additionally, your solar energy system will be paired with a user-friendly app that can help you track your solar system’s performance, at no additional cost.
Tim has worked in the solar industry since 2008. He has a Master's Degree in Energy Resources Engineering from Stanford University. His years of experience include working on solar energy projects for both homes and commercial properties. Tim enjoys sharing his knowledge of this evolving industry and making a difference in his community.
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