Buying solar panels is a big step for many consumers and a confusing one as well! One question asked by many homeowners who want to have solar panels installed on their homes is if they should buy or lease those panels and how their choice will affect their cost savings over the years.
Buying solar panels versus leasing is more expensive at the outset, but purchasing your panels can mean greater convenience and flexibility as well as more cost savings over time.
To ensure you're happy with your solar panel buy vs. lease decision, check out these reasons why we've determined at Greenville Solar Solutions that buying the solar panels is often preferred by many homeowners.
You may not be thinking of putting your home on the market today, but if you do purchase your solar panels and then eventually sell your home, you can often take your solar panels with you and have them installed in your new residence. Leases for solar panels may not be transferable, and you may even wind up paying a financial penalty if you want to terminate that lease early just because you're moving!
In some areas, having solar panels installed on a home may make that home more desirable to potential buyers, but this isn't always the case. If you don't want to take your solar panels with you to a new residence but find that homebuyers don't like the option of installed panels, you can have panels that you own removed and then resell them to recoup your cost. Again, this is without the risk of penalties for early lease termination and other such expenses.
When you sign a ten-year or twenty-year lease, it's easy to overlook the potential for the costs or terms of that lease to increase, as the end of that lease is a long way off. However, those years will eventually be over, and you will then need to sign an entirely new lease agreement, which might be well above the cost of your current lease!
When you purchase solar panels, you don't need to worry about any cost increase or adjustment to the terms of a lease. Once you've made your purchase or have paid off the amount you put on a credit card or that you took out as a loan to buy those solar panels, you then only need to worry about any minor maintenance costs you might face down the road.
When you lease solar panels, you may have limited options as to the installers you can use. The leasing company may dictate these choices to protect the condition of their panels or for their financial incentives.
However, when you purchase solar panels, you are typically free to use an installer of your choosing. You might then save money on the cost of installing those panels and can also choose a company with a stellar reputation, which offers a better guarantee for their work, that can install those panels more quickly than other companies, and so on. In some cases, those installers might also offer packages for cleaning and maintenance of the panels so that you save even more money on lifetime ownership of those new panels.
It typically costs thousands of dollars to buy or lease solar panels. In turn, it often takes a few years to see a return on your investment in terms of money saved on your electric bill.
When you lease solar panels, you might assume you're getting an immediate return on that investment, as the money saved on your electric bill might be more than the money paid for the lease. However, consider that you'll be spending on that lease for as long as you own your solar panels. If you buy solar panels, your savings will eventually match and then exceed your purchase price. Over time, you'll see even more money in your pocket from purchasing panels than from leasing.
This return on investment is even higher if you pay cash for your solar panels versus securing a loan. If you can forego paying interest on your loan for solar panels, that means even more of your savings going directly into your pocket!
Many states have incentives for installing solar panels, including rebates and tax deductions. These incentives are often better for buying solar panels and may include a deduction for the interest paid on secured loans.
If you want to stop using solar panels for whatever reason, you might need to pay the penalty for early termination of a lease. When you own your solar panels, you can have them removed and then resell them as desired without financial penalties. This option is useful for those who might retire before a standard lease term is completed if you haven't decided yet if you'll stay in your home or move to a senior apartment!
Purchasing can also be a good choice if you live in an area with temperamental weather conditions and you're not sure if the solar panels will collect and store enough electricity to offer a significant return on your investment. You can use the panels for several years and note your overall savings, and then decide if you want to keep them or if prefer to resell them and recoup some of your costs.
Because solar panels can be a bit costly to install, many homeowners initially opt for a low-power type of panel that collects and stores only so much energy simply because these panels are less expensive. However, a homeowner may then realize that they enjoy having solar panels on their home and want to upgrade to more powerful models that are able to collect and convert even more energy, along with larger batteries or storage packs to hold that stored power.
Upgrading to better panels is often tricky when you lease, as you may be committed to a particular type of panel for the lifetime of your lease and may face penalties or costs if you want to change those panels. When you buy solar panels, you are free to upgrade or swap out the panels for something different at any time without facing those charges and added costs written into a lease agreement.
There are apps you can buy and connect to your solar panels, which then work with your Android, iPhone, MAC, tablet, or other devices. These apps do all the math and figuring needed to find out how much money you're saving with your solar panels.
Some lease packages do include apps that connect to phones or computers, but note that your choices for these apps may be limited if you have any choices at all! Purchasing your panels allows you to choose any app or program that is compatible with your device and with the panels themselves, making it faster and easier to track your energy usage and finances connected to the panels.
One upside to leasing solar panels is that the lease agreement often comes with a service agreement so that the company leasing the panels will perform needed maintenance on those panels. However, solar panels rarely require any maintenance and care other than a simple brushing of their surfaces on a regular basis, so this may not be much of an incentive to lease.
Also, it's good to consider that this may not be an incentive if the leasing company goes out of business! You might choose a lease so that you don't need to worry about the maintenance of your solar panels, only to find that a particular leasing or finance company is no longer in business after a few years, and you are no longer eligible for that free maintenance.
When you purchase solar panels, you won't be paying for a maintenance option that you don't need and that might not be honored some years down the road. This incentive also makes a purchase more financially sound than a lease agreement.
Permanent ownership of solar panels is one of the best reasons to buy rather than lease. Consider that many people lease cars so that they can turn in their vehicle after a few years when it's suffered some wear and tear and starts to look a bit dingy. A consumer can then opt for a new car model that is a better fit for their needs, and which requires less maintenance because of its age.
However, solar panels don't typically wear out over the years. As they get older, these panels rarely need replacement parts or new wiring. Solar panels have no moving parts that suffer corrosion and other damage from long-term use, and their glass fronts rarely chip, crack, or break even when exposed to very inclement weather. Solar panels can then collect and convert solar energy no matter their age, and you can enjoy these eco-friendly cost savings for many years if not decades, to come!