Should You Lease or Buy Your Solar Panels
If you’re a homeowner that’s considering installing solar panels on your home, you’re likely facing the question, “Should I lease or buy my solar panels?”
While leasing solar panels may sound less complicated and less expensive, you should purchase your solar panels rather than leasing them.
Many homeowners consider leasing their solar panels because of the low start-up cost and the fact that someone else is handling the financing and installation of their solar panels. However, leasing solar panels can leave homeowners with:
- Fewer savings over time than purchased solar panels (due to escalator clauses in leases)
- Loss of control over where panels are placed
- Potential complications when selling your home
On the flip side, buying solar panels can:
- Add value to your home
- Save you money through certain tax credits and incentives
- Make selling your home less complicated
In the blog below, we’ll take a deeper look at the benefits of buying solar panels rather than leasing them, so you can better understand which option is best for you.
If you’d prefer to speak directly to a solar panel expert about installing solar panels on your home, reach out to Photon Brothers. Our team has years of experience providing high-quality solar installations and outstanding customer service. Call 719-204-3094 or schedule a free estimate online.
Add value to your home
Solar panels add (sometimes significant) value to your home, like other large investments such as a new roof or new flooring.
According to Energy.gov, solar panels can increase your home value by about $15,000.
While solar panels are expensive to install, they can save you a significant amount of money in the long run by lowering (or even eliminating) your monthly energy bills. For a buyer, this can be a very appealing prospect, especially if they don’t have to invest the time and money to install the panels in the first place.
If you choose to lease rather than buy your solar panels and end up wanting to sell your home down the road, you may encounter some issues attracting potential buyers. Although buyers are interested in homes with solar panels, the lease transfer process is extremely complicated (more on that, below).
Like any other home improvement project, buying panels will likely add value to your home, while leasing panels may make selling your home more complicated.
Save money through certain tax credits and incentives
Buying solar panels allows you to tap into tax credits, like the Solar Investment Tax Credit (ITC), which lets you apply 26% of your solar panel installation cost toward your federal taxes.
This tax credit is only available to homeowners who purchase solar panels and is not available for homeowners who decide to lease panels.
According to Energy.gov, one of the requirements is that “You own the solar PV system (i.e., you purchased it with cash or through financing, but you are neither leasing nor are in an arrangement to purchase electricity generated by a system you do not own).”
Many states also offer specific rebates and tax credits or exemptions for buying and installing solar panels on your home. For a list of incentives, you can visit the Database of State Incentives For Renewables & Efficiency.
Note: If you choose Photon Brothers as your solar panel installation partner, we can help you determine which rebates and tax credits you are eligible for.
Make selling your home less complicated
When you lease solar panels instead of buying them directly, you’re usually entering into a lengthy contract with the financier/installer where a third party technically owns the system.
If you want to sell your home, you will usually have to buy out the lease or have the potential buyer absorb your solar panel lease’s contract and potential fees. Some leasing companies will move solar panels, but this is a complicated process, usually including fees, approvals from your HOA and utility, and assurance that your new home can accommodate the panels.
If a new buyer agrees to absorb the loan, the third party who technically owns the solar system will usually need to be involved in this process, which can complicate matters and increase the time it takes to sell your home.
Even if you have no intention of selling your home in the near future, we’d still recommend buying solar panels. Solar panel leases usually last a very long time (think 20 years), and even if you have no plans to sell your home, certain unplanned life events can trigger or even force a sale. Rather than be stuck in a lease, we recommend that homeowners purchase their solar panels.
Interested in purchasing solar panels for your home? Schedule a free cost estimate with a company you can trust: Photon Brothers.
At Photon Brothers, we know that installing solar panels is a big investment, which is why it’s extremely important that if you’re considering panels, you work with a company you can trust. At Photon Brothers, we are committed to helping homeowners invest in clean energy solutions and are committed to providing the best installations in the business. Our in-house technicians have over eight years of experience and will do everything in their power to ensure you receive the highest-quality brands, products, and service possible.