Buy or Lease Solar Panels

buy vs lease solar panel

Solar panels can benefit your electricity budget, the environment, and the reliability of your power supply. You may be considering buying or leasing solar panels for your home or business. This article has all the answers you need.

We will get straight to the point. If you can afford it, buying solar panels is always going to be more advantageous compared to leasing solar panels because you pay less in the long run, you are the sole owner of the panels, and the value of your property is not negatively impacted through having them installed.

As the owner, you are also entitled to all of the tax rebates and government incentives whereas with leasing, you are not. Here are the main differences between the two.

Renting or buying? Renting Buying
Who owns the panels? The solar company You
Long term cost? More expensive Less expensive
Does it increase or decrease the house’s value? It almost always decreases the house’s value. The panels cannot be removed prior to the home sale without buying out of your lease. It can increase the home’s value, or the panels can be removed prior to the sale.
Number of years taken to pay back? 20–25 years 10 years on average before all upfront costs are recovered
Tax incentives? The solar company benefits from any tax or state-specific solar incentives. You benefit from tax and solar advantages directly and pocket the savings.
Average savings? Initially, you will save roughly 20% per month. With escalation clauses however, you may end up paying more for going solar than for grid power over time. After an average of 10 years, you will begin to make savings of up to $70,000 or more after 20–25 years.
Who pays for the maintenance of your panels? The solar company pays. However, many service and maintenance packages do not deliver as they should. You do.

Despite some of the obvious negatives, leasing is the only viable option available for some people if they want to go solar. You are going to need to very carefully weigh it up if you are one of them, however. There are lots of different factors that you need to contemplate when you are deciding whether to buy or lease solar panels including the following considerations.

 

  • The true cost of leasing vs buying
  • Whether or not leasing solar panels can boost the value of your home in the same way that buying them can
  • The real day-to-day impact of leasing on your overall electricity costs especially in the long term
  • How leasing can affect your ability to sell your home if you are still in contract
  • The different options at your disposal for buying and leasing solar panels and their different costs

 

The above areas should all be considered as they play an enormous part in your day-to-day life with solar panel technology, regardless of how you choose to access it. With the average solar panel system costing around $15000 to $30000, this can make the prospect of leasing an incredibly attractive option for those who do not have the upfront cash to buy a system outright.

This is especially true when you consider that most companies who offer solar leasing are usually willing to install the system and assess your property for suitability free of charge. However, as with any form of loan, you are almost always going to be paying more in the long run than you would have if you had the money to purchase your panels outright.

In some instances, the long-term cost of leasing can be so significant that even the free installation can pale in comparison to the expenses you will outlay over time. With that said, leasing can be a great option for those who want to access solar power for a wide variety of reasons including the low environmental impact and the sense of freedom that comes from self-sustained power generation.

The aim of our post today is to help you determine which method of acquiring solar panels is going to be right for you and, regardless of your preference, make you fully aware of all the pros and cons that come with leasing or buying. Without further discussion, let’s dive into the world of leasing and buying solar panels.

Table of Contents

1. Is It Better to Buy or Lease Solar Panels?
2. What Are the Pros and Cons of Leasing Solar Panels?
3. Is It Worth Renting Solar Panels?
4. Should I Buy a House with Leased Solar Panels?
5. Do Leased Solar Panels Increase Home Value?
6. Can You Buy Leased Solar Panels?
7. Why Leasing Solar Is a Bad Idea?
8. How Do Escalation Clauses Affect Solar Leasing?
9. Homeowners Trapped by 25 Year Solar Panel Contracts – Here’s Why
10. How Much Does It Cost to Lease a Solar Panel? What Are the Solar Lease Rates Like?
11. Solar Panel Lease Calculator
12. Solar Lease Rates – How You Can Make Real Money Out of Leasing
13. The Downside to Leasing Solar Panels
14. Lease Solar Panels Tax Credit Benefits, Free Solar Panels, and Solar Buyback – Which?
15. Is It Better to Buy or Lease Solar Panels? Who Owns the Panels?
16. Is It Worth Renting Solar Panels? What Will Happen to My Home?
17. Buying a Home with Leased Solar Panels
18. Buy or Lease Solar Panels – An Unreliable Business Model
19. Difference Between Solar Lease and Solar PPA
20. Solar Lease vs Solar Loan
21. Buy or Lease Solar Panels Comparison at a Quick Glance
22. Is It Better to Buy or Lease Solar Panels? – The Pros and Cons of Buying Solar
23. Solar Panels Purchase: Cash or Loan
24. Where Is the Best Place for Buying Solar Panels?
25. Where to Buy Solar Panels for Home Use?
26. Frequently Asked Questions
27. Buy or Lease Solar Panels: Conclusion

Is It Better to Buy or Lease Solar Panels?

Leasing solar panels can seem like an incredibly attractive option especially considering the sometimes-enormous upfront costs of buying your own system. Is it a good idea? Are leased solar panels worth it in the long run, or will they actually end up costing you more money?

This is exactly what we want to answer in this section so that you are completely aware of precisely what you are getting yourself into before you decide to commit to a long-term lease agreement with a solar company.

What Are the Pros and Cons of Leasing Solar Panels?

In a nutshell, here are the pros of leasing solar panels compared to buying them.

  • There are usually no upfront costs for leasing. Alternatively, when buying, you have to pay for the system in full up front.
  • You do not have to pay for the system to be maintained. In contrast, if you are buying, you have to pay for any repairs or servicing to your system.
  • You may pay roughly 20% less per month for your electricity usage from day one. When you buy, it takes roughly 10 years to start making back the costs of your solar system.
  • You do not have to pay for the installation if you lease. Installation costs come as standard when you are buying your panel outright.

Realistically, even though some of the above points may seem incredibly attractive, that is where the positives start to come to an abrupt end.

 

The reasons why are numerous. Here are the primary cons of solar panel leasing compared to buying.

  • Some solar leases have built-in escalation clauses, meaning that your payments may increase by up to 3% per year. Keep in mind that if the cost of energy in your area does not increase in line with this, then you will actually end up completely losing any savings you make over time.
  • The service packages for solar leases are often virtually non-existent, meaning that you will not actually get the assistance you need to properly maintain your solar panel system, which in turn could reduce its effectiveness over time. This would then reduce the amount of usable energy that you would be able to access and render your cost saving efforts less productive.
  • Solar leases can reduce the value of your home. This occurs because until the lease has been paid in full, the new homeowners would then have to assume responsibility for the lease, or you may even have to pay the lease off in full before being in a position to sell your property.
  • Assuming the costs of energy rise alongside any escalation percentage tied into your solar panel lease, you will still find that it will take considerably longer to make savings over time when compared to buying your system outright.
  • Any tax incentives or solar incentives running in your specific state or area will instead go to the solar company as opposed to you. This includes tax rebates of around 30%.
  • As opposed to a solar loan (a loan acquired to purchase your solar panel system), a solar lease simply means that you are “borrowing” your solar panels. This means that for all of the hard-earned money you pump into the lease, you will never actually own the panels.
  • Solar companies place solar panels in locations on your home that serve their needs the most. This includes everything from their exact placement to the number of panels they wish to use. This can lead to incredibly unsightly solar systems that are not sensitive to the original appearance of your residence. Your roof and walls essentially are not yours anymore.

 

In contrast, this is how the above areas compare to buying a system outright and why buying is much better on the whole.

  • The overall price you pay for your system is always much cheaper than the overall costs of a solar loan or solar leasing, and once paid, it never needs to be paid again.
  • Even though you have to pay to service and maintain your own panels when you buy them, this is actually a blessing because when you are in a lease agreement, you can only use approved solar company technicians. It can often prove very difficult to get any assistance from these technicians when they are needed.
  • Solar panels of any kind, whether they are leased or purchased outright, can negatively impact the value of your home. When you are the owner of the panels, you can simply remove them if you do not want them. Some prospective buyers also want solar panels, and if there is no lease attached to them, then this could potentially increase the value of your home.
  • It only takes about 10 years to fully cover the costs of your solar panels. Even though you are initially paying less with a lease, the amount of money you will actually save will be roughly 30% at the most over the 25-year lifespan of your lease compared to the money you will spend (and save) when you buy solar outright.
  • As the owner of the panels, you will be entitled to all of the tax rebates and other solar incentives being provided by the government. Every dollar will go into your pocket as opposed to the pocket of a solar company.
  • Because you own the panels, you can place them wherever you wish, however you wish. You will not have anybody to answer to, and you can safeguard the appearance of your home in the pursuit of solar energy.

Is It Worth Renting Solar Panels?

is it worth renting solar panels? - buy or lease solar panels

Whether it is worth renting solar panels or not is all going to depend on exactly why you are considering entering into a solar lease agreement in the first place along with your financial circumstances.

 

It is worth renting solar panels if the following circumstances apply to you.

  • You have little to no spare finances to be able to buy a solar system outright or enter into a PPA agreement.
  • You have bad credit history, and you are incredibly passionate about using solar technology.
  • Your main priority when going solar is to access green and renewable energy with minimal upfront outlay, and you do not mind that you will be paying increasingly more over time compared to buying a system outright.

 

However, many circumstances make it not worth renting solar panels. Buying solar is often the best option.

 

Here are some common reasons why it is typically ideal.

  • You can comfortably afford to pay for the system in full.

Or

  • If you cannot pay in full, you have a good enough credit history to be able to take out a solar loan, which is an infinitely better option than a solar lease.

 

The main non-debatable benefit of renting solar panels is that you will be using a green and renewable energy source that leaves no negative impact on the environment. No matter whether you rent or buy solar, that constant will always remain. However, you are already aware of the many negative aspects of renting solar.

As such, you have to ask yourself if “going green” outweighs the fact that in the long run, you are going to be paying significantly more than the price of your solar panels. Other than leaving zero harmful emissions in the environment, there are really no other genuine long-term benefits to entering into a solar rental agreement. On balance, there are plenty of negatives.

Should I Buy a House with Leased Solar Panels?

In order to effectively answer this question, we need to present a hypothetical scenario to you. The scenario is that you are a prospective home buyer and really like the look of a property. What is the only problem? It has solar panels attached to the roof and a few other areas.

You like the benefit of having solar panels so much, including the long-term cost savings, that you do not mind and are actually happy to buy them as part of the purchase. You tell the seller that you are willing to purchase the solar system as part of the house price and feel like you are doing them a favor because they do not have to take them down and move them.

This is when they drop an enormous bombshell. They do not actually own the solar panels. Instead, they are eleven years into a solar lease with a built-in escalation clause. The lease is going to go on for another fourteen years. As part of the house purchase, you need to be willing to take on the payments for the solar lease for the duration of its remaining lifetime.

Currently, the escalation clause has led to the monthly payments increasing to the point that the monthly payments on the system cost roughly the same as standard utility rates would in your area. As the years progress and starting from two years down the line, you are going to be paying more money per month for using the solar panels than you would for grid power.

Not only that, but the system is in need of maintenance due to its age. This means that it is not as efficient as it used to be. Unfortunately, the solar company providing the lease does not seem to be very forthcoming with offering any services or repairs to improve its performance. How would you feel about purchasing this home? If you answered that you would not feel great at all, then you feel just like millions of other prospective homeowners that do not want to take on the burden of a solar lease when they buy a new home.

What’s worse is the fact that in this day and age, so many of the original solar lease companies have gone into administration. This means that the panels on many homes are now instead owned by another company. These companies can be incredibly difficult to track down in some instances, making elements like service agreements even more insufficient than they were in the first place.

In other words, buying a home that has a series of panels placed on it that are midway through a solar lease agreement is not a particularly attractive prospect at all. So, what do you do if you want to get rid of the panels and are the homeowner? You might have to consider buying them from the solar company.

Unfortunately, you are going to need a lot of spare cash to be able to do this. For most people, this is completely unrealistic and places them in an almost impossible situation. This actually ties into the next question that is often asked by those who are considering taking out a solar lease.

Do Leased Solar Panels Increase Home Value?

do leased solar panels increase home value? - buy or lease solar panels

Though it might seem to many like equipping their homes with solar panels could be a great idea that will massively increase their value, the truth is often the complete opposite.

 

Consider the following important factors.

  • It is very rare that having solar panels on your roof will increase your property value.
  • The only viable way to improve your home’s value with solar technology is to own your panels, but even then, you are more likely to break even and simply get what the house is worth and not a cent more.
  • Any solar leases aside, panels can actually decrease the value of your home even when you own them. The problem with leasing is that you cannot remove the panels prior to sale unless you have plenty of spare cash.

 

As you can see, even if you buy a solar panel system outright, this can still reduce the value of your home. Solar panel systems just are not to the liking of everybody. The one positive aspect that almost everybody can agree on is that solar panels do not emit any harmful emissions into the ozone layer. However, there are many people out there who do not value this mitigated environmental impact as much as they do a home’s appearance.

That is understandable too because solar panel systems take up a considerable amount of exterior property space. This means that the appearance of solar panels alone can be enough to completely put off a prospective buyer from purchasing your home. If you own the panels and this is the case, you can at least remove them and either take them with you or choose to sell them.

Unfortunately, your options are not quite that simple when you are engaged in a solar lease. This is because the panels do not belong to you.

 

Consider the following information.

  • When you are in a solar lease agreement, this agreement will still exist even if you sell your home.
  • Your prospective buyers will need to be willing to take on the payments of your solar lease as part of their property acquisition when they buy your home.
  • Moving your solar panels with you to your new location is possible, but very strict criteria must be met first.

 

The first point mentioned here is actually at the crux of many house sale dilemmas involving solar panel systems. When you see it from a buyer’s perspective as presented in the previous section, it is easy to see why too.

Can You Buy Leased Solar Panels?

If you are in the unfortunate position of being a homeowner who is in the middle of a solar lease agreement and are trying to sell your home, you have probably been thinking about how you can get rid of your solar panels or purchase them outright, which would give you free rein over what you do with them.

 

Here is the reality of buying leased solar panels.

  • At the very minimum, you will have to pay the combined total value of all the outstanding monthly payments on your account.
  • Usually, there are hefty cancellation and contract exit fees.
  • The escalation percentages built into your contract are often factored into the final payment value.
  • The cost of buying out of a solar lease is frequently comparable to the upfront costs of paying for an entirely new solar panel system.

 

In other words, the solar company wins. No matter which way you look at it, you are either going to have to pay the lease on your panels over an extended period of time or pay in the short term for buying out of your contract.

 

These are the benefits of buying your leased solar panels.

  • You own the panels outright and can do as you wish with them.
  • Often, the cost of buying out of a solar lease is going to be preferable to the value loss on your home if you are still in contract.
  • You can potentially sell the panels and recoup some of the money spent on the buy-out process if they are still operating at a high enough efficiency level and are in good enough condition.

 

As you can see, buying out is not all bad. What is the problem? You need to have enough spare money to be able to do it. Considering you went for a lease option in the first place, it is unlikely that this is going to be the case.

Why Leasing Solar Is a Bad Idea?

One of the most attractive prospects of a solar lease is that you are not responsible for maintaining the solar panels. Here are the realistic costs of annual solar panel maintenance for the majority of average-sized systems over the years.

Costs Average 10 kW capacity system
Average cost per year after 5 years? $450
Average cost per year after 10 years? $450
Average cost per year after 15 years? $600
Average cost per year after 20 years? $750
Average cost per year after 25 years? $900

The above cost estimations are based on two thorough solar panel cleanings at a cost of $150 each, occurring twice per year, and an annual inspection costing $150. And here are the average additional costs you will pay per year based on your solar lease having a built-in escalation clause in comparison.

Potential monthly escalation costs based on an escalation percentage of 3% Average $200 per month solar panel system on a solar lease
Potential escalation cost per month after 5 years? $230
Potential escalation cost per month after 10 years? $260
Potential escalation cost per month after 15 years? $290
Potential escalation cost per month after 20 years? $320
Potential escalation cost per month after 25 years? $350

What does this mean? Well, at the 10-year mark with a purchased solar system, you are usually getting ready to put your feet up and relax because you have made all of the money back that you spent on your system in the first place. Provided you do not have any major issues, you will just need to perform 1–2 cleanings a year and an optional annual inspection.

After 10 years when you are leasing, even though your service and maintenance costs are covered, this is the point where you start to pay more than the equivalent of performing annual inspections and cleanings. Every year beyond that, you are paying much, much more per annum in total than you would if you owned your own solar system.

Unless anything goes wrong with one of the mechanical components of your panels, the figures in the first table are realistically the most you are likely to have to pay out per year to keep your panels in prime condition as a solar panel system owner.

Cleaning the panels in particular is also something that the majority of homeowners can do themselves if they are comfortable with and own a large set of ladders. This saves on most of the additional expense. What attracts many to leasing is the fact that you are not directly paying for servicing, inspections, or repairs over the 20–25-year duration of your solar lease. Considering that these repairs can cost an enormous amount of money, this can seem like a great deal at first glance.

As with many aspects of solar leasing though, all is not as it initially seems in this department either. This is because the “service” packages included as part of many solar leases do not offer much service at all. The main aim of a solar lease is primarily to allow a solar company to generate as much power as possible using your home. Your needs are a secondary aspect of the agreement.

What this means is that provided the solar company is able to meet its energy requirements at large, it is not likely to spend extra money on improving or maintaining the efficiency of the system that they have placed on your residence. Even if your system requires vital repairs, it is not likely that a solar company is going to be willing to spend any of their resources on carrying them out unless the system at large is at risk of completely shutting down.

As they are not likely to prioritize your needs, if you find that you are not achieving the level of efficiency that you need from your panels and that your home is not running as smoothly as it should as a result, this is not likely to be high on the list of concerns of your solar provider. This means that the “dream” of free maintenance for the lifetime of your solar lease that many solar salespeople pitch to you is in reality going to be completely different.

What you are likely to expect before signing on the dotted line is a well-maintained, regularly serviced system that meets your home energy requirements while providing the power that your chosen solar company requires all for less money per month than your current grid-based utilities.

What is more likely to happen is that you are going to be spending increasingly more money over time on a system that becomes less and less efficient and is not appropriately maintained by your solar leasing company. In other words, as time progresses, you will be paying more and getting less in the process. If that sounds like a bad deal to you, then you should put some serious consideration into whether solar leasing is going to be right for you.

Even if you could afford to have the repairs carried out on the solar panel system as they came up over time, this would breach your agreement with the solar lease provider because you would not have used one of their approved company technicians if you had the repairs done on your own. In other words, on pretty much every level, you are likely to be completely pinned in place.

How Do Escalation Clauses Affect Solar Leasing?

Escalation clauses are designed in such a way that the initial monthly payments on your solar lease start low but increase progressively over time at a fixed rate per year for the duration of the lease.

The following chart shows the real-world impact of these increases over time.

cost of solar: owning vs leasing - buy or lease solar panels
(Source: Run On Sun)

Here are the main issues with an escalation clause.

  • It can lead to your payments increasing at a faster rate than the value of your utilities in your area of residence, thus meaning that you end up paying more for your utilities than you would when using grid power over time.
  • Escalation clauses can make it incredibly difficult to sell your home because prospective buyers know that they are purchasing a property that will progressively get more and more expensive as time goes on.
  • In a worst-case scenario, you will not only be paying more for your utilities, but you will also decrease the value of your home and potentially even trap yourself at your current location until you can either buy out of your solar lease or it reaches the end of its term.

 

In comparison, when you buy your system, these advantages are present.

  • The upfront costs are the only costs you will pay other than for cleaning and maintenance that you might be able to perform yourself.
  • The value of utilities in your area has no impact on you financially, whether they rise or decrease (unless you are selling back to the grid some of the solar energy you produce).

 

Escalation clauses are one of the main areas that people overlook completely when making a decision about whether or not to enter into a solar lease agreement. This is because the sales pitch of many solar companies is incredibly misleading and is designed to cleverly mask the financial reality of entering into an escalator clause.

The way that a company will often pitch solar leasing is to say that the initial outlay is incredibly minimal when compared to purchasing outright. This is because there is no down payment, and the first series of monthly payments are significantly lower than they would be if you were paying for grid-based power over the first few years.

They further present this as an attractive option by telling you that their integrated service package will also mean that you will not be paying a penny for maintenance once your system has been installed. As you already know, the truth is that solar panel system service packages are often almost completely useless and do not assist solar users anywhere near as much as they should.

The real problem here is that service packages aside, the initially low outlay of solar leasing is always progressively outweighed over time as your monthly costs rise. As most people enter into solar leases based on their current financial situation, this means that should their circumstances change over time for the worse, they are actually going to find it harder and harder to make the monthly payments required to sustain their solar leases.

Not only that, but even if your financial situation stays the same or even improves, you are still going to be faced with an enormous problem involving your home. Solar leases present a great short-term solution for equipping your home with solar power due to the virtually non-existent start-up costs, but your solar dream can fast become a nightmare if you have any plans to sell your home in the not-too-distant future.

Remember too that because it is just a lease, you will never actually own the panels. In instances where the escalation percentage outweighs the rise in utility value in your area, you can actually end up paying more over time than you would have for grid-based utilities and having nothing to show for it. If you are uncomfortable with that idea or it does not tie in with your future plans, then it is highly likely that an escalation-based solar lease is not for you.

Homeowners Trapped by 25-Year Solar Panel Contracts – Here’s Why

As you already know, the reason why so many homeowners are trapped by 25-year solar panel contracts is because they are virtually impossible to get out of unless you are incredibly lucky or have a lot of spare cash lying around. Let’s discuss the luck element, although we say this lightly because being lucky would still mean that you had to take your panels with you. In the best circumstances, these outcomes could be possible.

 

  • You may be able to take your solar panels with you when you relocate.
  • This will depend on the suitability of your new residence and whether the new roof and the general structure of your home will be able to house the solar panels.
  • If the solar company providing your solar lease is able to achieve the same power output at your new location, this may prove to be a more viable option than buying out your solar lease early.

 

For those who simply do not have the spare resources to be able to buy their way out of their solar lease, taking your leased panels with you may prove to be a way for you to sell your home to someone who does not want to take on the burden of your solar lease.

 

However, you should be aware of these potential issues.

  • Your new home will need to have an initial survey performed to determine whether or not it will be a viable location for your existing array of solar panels at a cost of $500 or more.
  • The movement and installation of your existing panels is likely to cost $500 or more.

 

Even though you do not have to find what would likely be an enormous amount of money for you to be able to buy out of your solar lease early and are able to sell your home without a hitch, you will definitely still need to find at the bare minimum a spare $1,000 for the luxury of being able to do so.

The problem with this, of course, is the fact that you are still going to be faced with the same issues as you were faced with in your previous location. The solar company is still going to have a large claim on your property as they are going to be able to place your solar panels wherever they want.

This means that the new property that you have searched so hard for might not resemble its current appearance in any way shape or form soon. As before, the solar company will place their panels wherever they need to place them in order to be able to achieve the highest energy output possible.

This could lead to all of the features that you love about your new home so much no longer resembling their original appearance in any way. Your only other alternative would be to buy out of your solar lease early. For most people, this simply is not an option, however. Even if you could afford to pay the total combined value of your remaining monthly payments, most solar leases have built-in clauses that require that you pay additional fees when exiting your contract.

On top of that, if your solar lease has a built-in escalation clause, then it is likely that the combined value of the additional interest over the remaining years of your contract will be added to the final buy-out price.

This can easily add $5,000–$6,000 more in fees on top of an already hefty buy-out price tag. Considering that most people choose solar leases because they are a more affordable option in the first place, it is unlikely that they are going to have the spare resources to be able to lay out that kind of money prior to selling their homes.

As such, it is not uncommon for people to remain trapped in their homes and unable to move as a result of incredibly costly solar lease buy-out agreements. Considering all of the reasons that we previously highlighted in regards to why buying a house that is in the middle of a solar lease is not the most attractive of options, it is fairly easy to see how this can happen. Again, this poses another incredibly important area of consideration for you to ponder before making a final decision on whether to buy or lease solar.

How Much Does It Cost to Lease a Solar Panel? What Are the Solar Lease Rates Like?

On average, depending on the size of your system based on the energy requirements of your home, it costs between $50–$250 to lease solar panels from a solar company per month. However, this assumes that there is no escalation clause built into your solar contract. These are starting estimate figures only.

As previously mentioned, these clauses can lead to incredibly negative financial situations with solar leases because they can actually lead to you paying more for accessing solar power than you would for standard electricity. Though you have already seen figures for a $200 per month solar system and how escalation can massively amplify costs over the years, we are now going to show you figures per year for a wider variety of systems to get a true account of the real costs associated with solar leasing.

Solar Panel Lease Calculator

Monthly solar lease cost with built-in escalation percentage $50 per month system $100 per month system $150 per month system $200 per month system $250 per month system
Monthly payment after 5 years @ 3% $57.50 $115.00 $172.50 $230.00 $287.50
Monthly payment after 5 years @ 4% $60.00 $120.00 $180.00 $240.00 $300.00
Monthly payment after 5 years @ 5% $62.50 $125.00 $187.50 $250.00 $312.50
Monthly payment after 10 years @ 3% $65.00 $130.00 $195.00 $260.00 $325.00
Monthly payment after 10 years @ 4% $70.00 $140.00 $210.00 $280.00 $350.00
Monthly payment after 10 years @ 5% $75.00 $150.00 $225.00 $300.00 $375.00
Monthly payment after 15 years @ 3% $72.50 $145.00 $217.50 $290.00 $362.50
Monthly payment after 15 years @ 4% $80.00 $160.00 $240.00 $320.00 $400.00
Monthly payment after 15 years @ 5% $87.50 $175.00 $262.50 $350.00 $437.50
Monthly payment after 20 years @ 3% $80.00 $160.00 $240.00 $320.00 $400.00
Monthly payment after 20 years @ 4% $90.00 $180.00 $270.00 $360.00 $450.00
Monthly payment after 20 years @ 5% $100.00 $200.00 $300.00 $400.00 $500.00
Monthly payment after 25 years @ 3% $87.50 $175.00 $262.50 $350.00 $437.50
Monthly payment after 25 years @ 4% $100.00 $200.00 $300.00 $400.00 $500.00
Monthly payment after 25 years @ 5% $112.50 $225.00 $337.50 $450.00 $562.50

The initial costs of leasing are without a doubt attractive, but the above table shows just how costly it becomes over time. Solar is supposed to be a preferable option to using grid power not only because it emits zero emissions into the environment but also because it is significantly cheaper over time. Instead, leasing becomes more and more expensive over time.

This entirely defeats one of the main purposes of using solar technology in the first place. Solar power should realistically cost less once installed and after all the initial planning, permits, and labor costs have been covered because it relies on an endlessly sustainable energy source to produce the energy that you harness from it. Of course, that energy source is the sun.

Solar Lease Rates – How You Can Make Real Money Out of Leasing

solar lease rates – how you can make real money out of leasing - buy or lease solar panels

We are going to take a momentary sidestep to make you aware of one way that you can actually make a lot of money out of leasing. This method does not actually involve you leasing solar panels though. Instead, it involves you stepping into the role of the lease provider.

 

Here are some things to consider.

  • There are many companies out there that are desperate to find spare space where they can place solar panels.
  • There are a significant number of homes that have spare land that is not being used.
  • You can make a considerable amount of money out of offering your spare land to solar companies in the form of leases.
  • You might even be able to sell your spare land to a solar company so that they can build a solar farm on it, depending on your available space.

 

This version of solar leasing falls into the classic “no one thinks about it” category of revenue opportunities for homeowners. It is a completely viable way to make some really good money though. The average payout range per acre, per year is between $250–$2,000 depending on the solar viability of your land.

How much money you make is largely going to depend on whether your land is south facing, has no obstructions in the surrounding area, and has plenty of peak daylight hours per day. This is how much you could realistically make from leasing your available land to a solar company depending on the size of your free area.

Size of land $250 per acre $500 per acre $1,000 per acre $1,500 per acre $2,000 per acre
5 acres $1,250 per year $2,500 per year $5,000 per year $7,500 per year $10,000 per year
10 acres $2,500 per year $5,000 per year $10,000 per year $15,000 per year $20,000 per year
15 acres $3,750 per year $7,500 per year $15,000 per year $22,500 per year $30,000 per year
20 acres $5,000 per year $10,000 per year $20,000 per year $30,000 per year $40,000 per year
30 acres $7,500 per year $15,000 per year $30,000 per year $45,000 per year $60,000 per year
40 acres $10,000 per year $20,000 per year $40,000 per year $60,000 per year $80,000 per year

If you are lucky enough to meet the criteria for having incredibly viable solar real estate based on the factors we mentioned earlier and have plenty of spare space, you can easily earn another full-time salary (or significantly more) per year just through leasing your land to a solar company.

Of course, you could always sell your land to a solar company if you have plenty to spare so that they can turn it into a farm. It is hard to say how much you could make from doing this, but it would be likely to be a significant and quite probably life-changing figure depending on the space and viability.

The Downside to Leasing Solar Panels

We have been talking about how bad leasing is for you financially in the long run because of escalation clauses, but what happens if there is not an escalation clause in place? Does this suddenly mean that leasing solar panels is worth it? The first point to mention is that it is going to be almost impossible to find a company who will offer solar leasing without there being a built-in escalation clause.

This is because they are not actually going to be able to harness as much excess power as you might think from your solar system. Your monthly payments might be significant to you, but to a large company with millions of dollars of backing, the profits in one series of panels alone are not enormous even factoring in the excess energy that the company is able to harness in surplus of your power requirements being met from the system.

But for argument’s sake, let’s say that you are actually able to find a company that offers a solar lease without a built-in escalation clause. How much money are you actually likely to save over time compared to purchasing your system outright? Here is the cold, hard truth.

System type Purchased outright Leased
Potential savings after 5 years No savings Between $3,000–$4,000
Potential savings after 10 years Between $20,000–$25,000 Between $8,000–$10,000
Potential savings after 15 years Roughly $40,000 Between $10,000–$14,000
Potential savings after 20 years Between $50,000–$60,000 Between $20,000–$25,000
Potential savings after 25 years Between $70,000–$80,000 Between $25,000–$29,000

The above chart may have opened your eyes a little regarding the realistic savings that you are able to make when buying a system outright compared to leasing it over time.

Admittedly, the environmentally friendly nature of solar technology is going to be the same regardless of the means you use to access or purchase your system, but if cost savings are important to you, then the above chart shows you precisely how much money you can really save after only a few years when purchasing your system.

Imagine if you had a particularly steep escalation clause percentage built into your contract too. The savings presented above for leases would be even less and in a surprising number of cases would actually end up being non-existent over time.

As such, cost savings should not be at the forefront of your priority list in the long term when you are listing all of the pros and cons behind solar leasing. Instead, you should consider whether the environmental impact is a significant priority to you.

If you are incredibly passionate about sourcing all of your power from a green and renewable energy source, then leasing makes total sense. It will allow you to do this with virtually no upfront outlay. Provided you are willing to take a long-term hit if your escalation clause percentage is high, then you are going to be able to achieve everything you wanted out of using solar technology.

However, if you are looking for a power solution that is green while also ensuring that you are able to keep plenty of green in your wallet, then you need to try and look past the short-term outlay of buying a system outright and instead look at the bigger picture.

In the long term, solar leases only ever benefit solar companies as opposed to the people who are using the panels. The entire leasing process has actually been designed purely around this concept.

Try not to give into momentary urges and instead think about the long-term implications before signing on the dotted line. Your wallet will thank you for it many years from now.

Lease Solar Panels Tax Credit Benefits, Free Solar Panels, and Solar Buyback – Which?

If you are looking into solar leasing options or solar buyback and are wondering about the kind of tax rebates you are going to be entitled to after hearing about them all over the internet (and perhaps even the television), then we are sorry to inform you that you are unlikely to be able to access any whatsoever.

We will cover solar buyback first. Solar buyback takes place when you get paid the same rate per kWh for the electricity that you feed back into the grid using your solar panel system as the rate you pay for it yourself.

 

In the past, solar buyback made certain things possible.

  • Achieving enormous profits from having a solar panel system installed
  • Almost completely offsetting the utility costs of your home

 

As great as these positive traits are, they all revolve around you owning your panels as opposed to leasing them. Some companies offer solar buyback as a built-in component to their solar leases. So, considering you might be able to access a solar buyback scheme as part of a solar lease, what could possibly be the negative of making extra money from having solar panels installed on your roof, virtually for free?

 

Well, here are the issues.

  • Solar buyback schemes are almost completely a thing of the past, and payout rates have decreased considerably over the years.
  • The realistic amount of excess energy that most homes are able to generate in surplus to their needs is very minimal, and the return of a buyback scheme often pales in comparison to the monthly payments made on a solar lease.

 

If you are a solar panel system owner, then solar buyback is not a particularly attractive option anymore. If you are engaged in a solar lease though, what little benefit there was previously is now virtually non-existent. You might instead be thinking about tax rebates. You have probably heard all about the great government incentives for “going solar” and emitting no harmful emissions.

You will be pleased to know that these incentives are very real and that they exist across many states in America. Though the actual incentives vary from state to state, it is safe to say that there are some really great financial reasons for going solar including massive tax rebates of up to 30%.

What is the problem? You will not be seeing a penny of these incentives if you are leasing. If you factored enormous tax rebates into the annual outlay of engaging in a solar lease then, sadly, you will need to think again. This is because it is the solar company that is providing your solar lease agreement that will be able to access and benefit from the many schemes and incentives that have been put into play by the government and individual states.

The reason is that the solar panel company is the real owner of the panels. Remember, although you are making monthly payments to the solar company, you are not actually the owner of the solar panels. As all of the incentives are designed for the owners of the solar panels, this means that the solar company themselves are going to pocket every additional penny that these schemes allow them to access.

When you consider that you are already likely to be paying your solar company excessively as the years go on, suddenly solar leasing looks like a fantastic business model from every angle. In reality, that is because it is. Unfortunately, though, it just is not great in the long run for the person who is engaged in the lease. Instead, it is incredibly lucrative for the company that provides the lease.

Is It Better to Buy or Lease Solar Panels? Who Owns the Panels?

is it better to buy or lease solar panels who owns the panels? - buy or lease solar panels

You already know that if you purchase a solar panel system outright, then the solar panels that form the backbone of said system are unquestionably yours. It is the same in the long run at least when you take out a solar loan. Even though you might not be the immediate owner of the panels and overriding system, eventually, once your last payment is made, the entire solar panel system that is currently nestling comfortably on the roof of your house is going to be yours.

But what about when you take out a solar lease? When you are pumping all of your hard-earned money into the pockets of a solar company every month, especially when you are paying more over time due to an escalation clause, will you one day have something to show for it?

Unfortunately, you will not. One of the most negative aspects of solar leasing is the fact that when you finally get to the end of your 25-year lease term, the owners of the panels will simply come to your home and take your panels away. They can do this because they are the true owners of the panels.

As sad as that may seem, for all of the time that you have spent pumping money into the solar panel system that has sustained your home over the years, you are not actually going to have anything to show for it at the end of the lengthy 20–25-year term. Sure, you might never have been able to access solar power without a lease, but this begs the question of questions. Why did you want to do it in the first place?

If you knew at first, before signing on the dotted line, that you would be paying considerably more over time in conjunction with receiving very little assistance in the form of an effective service package to maintain and sustain the efficiency of your panels as they aged, would you still have gone through with your decision all for the sake of using a green and renewable energy source?

This is a very important question to ponder over because ultimately the primary gain of solar leasing is that the panels you use leave no harmful impact on the planet. Other than this though, there is genuinely not a great deal that is positive to be said for entering into a solar lease agreement at all.

Is It Worth Renting Solar Panels? What Will Happen to My Home?

The final piece of the equation to fully consider if you are thinking about entering into a lease agreement is your home’s appearance. It should stand to reason that the appearance of your house is going to be altered through the installation of a solar panel system. However, when you enter into a solar lease, this alteration can be taken to extremes.

This is because of the fact that solar companies view your property as a solar “farm.” They are not considering its appearance or residential usage when they start to design their systems.

 

Consider the following drawbacks.

  • Solar companies want to cram as many solar panels as possible onto the available surfaces of your home.
  • Once you sign your solar lease, you are giving permission to the solar company to essentially do as they wish with your property.
  • Often, absolutely no regard is shown for the original appearance of your property in the pursuit of harnessing as much power as possible.

 

After you sign your name on the dotted line, you are effectively surrendering all of the exterior surfaces of your property to the company. It is absolutely imperative that before you decide to commit to an incredibly lengthy lease agreement like this, you first check over the final system design blueprints and any other available documentation showing precisely what the final system is going to look like.

Many people have committed to solar leases before without performing this final check, only to be absolutely horrified at the extent of the alterations that then occur to their property. If you are not careful, your beloved home might not look anything like your beloved home whatsoever once the solar company has finished with it.

Some properties lend themselves well to the placement of a high number of solar panels, whereas others look completely out of place and sometimes very odd when panels are crammed into every available space on their exterior surfaces. If the appearance of your home is important to you, then you should think very carefully about whether having solar panels and “going green” means more to you.

If it does not, it is safe to say that entering into a solar lease agreement is probably not going to be a good idea for you unless by a stroke of luck the final design blueprints show that the system is going to be sympathetic towards the original design of your house.

Buying a Home with Leased Solar Panels

If you are buying a home with leased solar panels and thinking that you might be able to take them off, then think again.

  • You can only remove leased solar panels when the lease agreement ends or when you buy out of it.
  • Until the agreement ends, you are legally bound to keep the solar panels in place.

Unless the lease agreement on a property is almost at an end, then you are going to have to buy out of the solar lease as a new homeowner before you can take them off. If you see solar panels on a property that you are considering buying, make sure that you find out whether they are leased or purchased first.

You already know from one of the earlier sections of this guide that you will be paying for the panels, but you might not have been aware that you cannot remove them either. If you are buying a house based on its appearance, this could have disastrous ramifications.

Buy or Lease Solar Panels – An Unreliable Business Model

One of the most worrying aspects of solar leasing (aside from all of the other areas mentioned) is the fact that many solar companies who offer leasing do not last for very long. As solar leasing is a very short-sighted concept, this problem extends into the lifespan of many of the companies who offer it, and they frequently fold several years down the line, leaving many of their customers trapped with solar panel systems that they are paying increasingly more for as the years go on.

Sometimes, when a solar company closes shop, they do the right thing and carefully select their buyer to ensure that all of the active leases are handled respectfully, fairly, and professionally. Sadly, there are many providers who simply do not pay this level of diligence to their buyer selection process. Solar companies have been known to simply hand ownership of their panels over to buyers and sail off into the sunset, not once worrying about the impact that this could have on their existing customers.

The problem with this is that quite often, the new owners of the solar panels are not easily contactable. This makes it an absolute nightmare to perform simple tasks like discussing your lease and payments or scheduling any kind of servicing and maintenance.

In other words, you may be stuck paying into a solar lease without having any real idea about who your money is going to, while also having no means of discussing the possibility of ending your contract early or even sustaining your panels.

This can quickly lead to you being trapped in an impossible situation and is a scenario that many unfortunate people have found themselves in either after buying a home with an existing solar lease or after being in a lease agreement for several years themselves.

Difference Between Solar Lease and Solar PPA

difference between solar lease and solar ppa - buy or lease solar panels

Aside from leasing, you can also sign a power purchase agreement (PPA) with a solar company. There are definitely some similarities between leasing and PPA agreements. The main difference between a solar lease vs solar PPA is that when you enter into a PPA agreement, you only pay for the precise amount of solar energy that you actually use.

The beauty of this is that there is no escalation clause built into an agreement like this. It is not a given that you will pay more as time goes on as it is with the vast majority of solar leasing options. The only time you are likely to pay more per month is when the cost of utilities rises in your area. If you are lucky, this will either not happen at all or only happen to a marginal degree, meaning that your monthly payments will remain near enough the same over the course of your agreement.

The downside to a PPA is the fact that you are almost always going to have to pay a hefty down payment. For those who do not have any available resources, this will completely price them out of the PPA market as typical down payments are a minimum of $1,000.

As with leasing, the maintenance and servicing of your panels is all supposed to be built in as a standard part of the package. Of course, as you already know, these service packages are not always as they seem, which can render this aspect of a solar PPA meaningless as a realistic selling point.

With a lease agreement, it is incredibly unlikely that there is going to be any kind of initial down payment, meaning that leasing will always be the best option for those who want immediate access to solar without any financial outlay being necessary in the process.

On both fronts, any tax incentives or other state-specific incentives for using solar technology in your area will go to the solar company who provides your lease or PPA. You will never see a penny of the savings or revenue generated by these incentives.

Solar Lease vs Solar Loan

They sound very similar, but in actual fact, a solar loan is very different from a solar lease in a variety of different ways. A solar loan is actually the next best thing to buying your panels outright.

 

  • You will completely own your panels once your final loan payment has been made.
  • There are no built-in escalation clauses with a solar loan. You will only ever pay more on your monthly payments if you are in a fixed-term loan for several years with variable interest rates that then rise.
  • You will be entitled to the tax rebates and other incentives offered from the government when making use of a solar loan because the panels will be in your name as you are the individual responsible for the loan.
  • You can choose where and how to place your solar panels because the solar panel system is in your name.
  • Solar loan payments are typically cheaper than lease payments in the long run.

 

A solar loan is no different than taking out any other form of loan to purchase an item. You are in full control of the item that you have taken the loan out against, meaning that you can place it wherever you wish on your property.

 

With that said, there are some obvious downsides to not being attached to a solar company.

  • You must have good credit history to be able to qualify for a solar loan.
  • As the panels and system are in your name, this means that you will have to pay for any servicing and repairs yourself.
  • In the short term, your loan payments are likely to be higher than solar lease payments, but in the long run, they will be cheaper due to the escalation clauses built into almost all solar leases.

 

Realistically, the above points form the main issues that surround solar loans. So, is it better to finance or lease solar panels? The truth is that loans offer a much better alternative that is second only to purchasing outright. Just remember, though service packages seem attractive at first, the truth is that the majority of them simply do not deliver what you need them to, when you need them to do it. This makes them somewhat of an illusion.

In these instances, having the option to be able to pay a qualified professional to resolve the issues you are having with your panels is actually favorable. When you are engaged in a solar lease, this simply is not possible, however, as you need to use an approved company technician. As such, even this seemingly negative aspect of solar loans is actually more of a blessing if you want to guarantee the sustained efficiency of your system over the years.

Buy or Lease Solar Panels Comparison at a Quick Glance

So, what is the real difference between buying vs leasing solar panels? Take a look at the below quick reference chart to get a concise, clear idea.

  Buy Lease
Energy savings 40–70% in energy costs plus free electricity while your system is functional 10–30% of energy costs
Installation Requires professional fee minus any discounts Handled by the solar company leasing the panels
Maintenance Maintained by the owner and may be covered by manufacturer warranties for a few years Maintained by the solar company at no cost to you
Upfront expenditures $15000–$30000 $0
Other differences Increases value of property Makes it difficult to transfer the ownership of the property with the leased panels

Because you have now read all of the various points on leasing, you know that even the merits associated with leases listed in this table are not quite what they seem. To the unknowing eye, all of the positives of solar leasing seem very attractive in the initial moment. It is when you cast your eye several years down the line that everything starts to look very different. Luckily, you now have the knowledge and foresight to be able to do this.

Is It Better to Buy or Lease Solar Panels? – The Pros and Cons of Buying Solar

Before we conclude our guide today, we want to take a moment to remind you of the pros and cons of buying solar compared to leasing once more. This quick nutshell overview is crucial to help those who might be tempted to lease because it effectively proves that those “amazing” deals being offered by solar salesmen are actually just an illusion.

 

Here are the positive aspects of buying solar panels outright.

  • You are the sole owner of the panels. Therefore, you are not associated with a solar company, nor do you have to answer to one.
  • Should you wish to relocate, you can simply sell your panels or dispose of them however you wish if your prospective buyers do not want to keep them.
  • Once your system and its installation have been paid for in full, you will not have to worry about any further financial outlay save for maintenance or servicing costs, which you can actually bring down to virtually zero with a little DIY work.
  • You will be able to claim every penny of the tax rebates and other state-specific incentives being offered by the government for yourself.
  • After roughly 10 years (depending on the size and cost of your chosen system), you will have made back the money you initially spent on your panels.

 

On almost every level, buying solar outright is absolutely the way to go for those who can afford to handle the substantial costs of owning a solar panel system.

 

Of course, there are cons associated with doing this too.

  • You will have to pay every penny of the upfront costs of the system yourself. This includes the surveying of your home, any planning permissions required for placing the panels, the materials, and the professional installation time and expertise if you are not in a position to be able to do this yourself.
  • You are going to have to pay for the maintenance and servicing of your solar panels out of your own pocket. Again though, how much you pay will depend on how much of the maintenance you take care of yourself. The majority of the maintenance involved is actually cleaning!

Arguably, another con could be that you might decrease the value of your home, but because you are able to remove and dispose of the panels yourself since you are the owner, this is not so much of an issue as it is when you are in a lease agreement. Financially and logistically, owning solar panels is absolutely the best way to access solar technology.

Solar Panels Purchase: Cash or Loan?

solar panels purchase cash or loan - buy or lease solar panels

When it comes to owning your own system and having full control, as we have already mentioned, your options are either to buy outright or to take out a solar loan. If you have a good credit score rating, loans provide another great option for owning solar that takes away some of the financial burden of paying for the system in the form of set monthly instalments and a low down payment.

The main negative when we are comparing the two is that due to the interest required with pretty much any loan type including solar loans, you are going to be paying more overall for the cost of your system compared to purchasing it with cash. Another negative aspect is that if you fail to meet your payment terms over the course of your loan agreement, this could lead to your system being repossessed and the outstanding amount on your solar loan still being due until paid in full.

Even though the system is entirely in your name and you can essentially do with it as you wish when you have entered into a loan agreement, the system is never truly yours until the final payment has been made on your loan. Where possible, paying cash for your system and taking immediate ownership is the best option for those who want to go solar and will always yield the best price when compared to paying over time and the interest rates that come with this.

However, solar loans definitely present a more viable option compared to a lease or PPA agreement and are easily the best way to pay for your solar panels over an extended period of time. They are cheaper in the long term and certainly more convenient. We will now dive into the most frequently asked questions about solar leasing vs buying so that no stone has been left unturned about this subject before you make a final decision.

Where Is the Best Place for Buying Solar Panels?

The truth is that there is not one singular best place for buying solar panels because every provider offers different packages and solutions. Before you consider buying, if you have an intermediate level of DIY knowledge and ability, then you should definitely consider making your own panels instead. This makes owning a solar system virtually free in comparison to the prices that you will pay to established solar companies, and it is absolutely the best way to own solar.

If you are interested in seeing whether this is viable, check out websites like Backyard Revolution that offer comprehensive step-by-step guides on how to build and install your own solar panel system. If you would still rather pay for someone else to install your solar system and provide all of the components however, then companies like SunPower, Seraphim, Tesla, and Solaria are all very highly regarded.

With companies like Tesla too, just remember that while the prices might be slightly elevated compared to some other companies, the quality of the components and service offered can mean that the additional expense is more than worth it. If you have the money to buy outright, always try to buy the best quality system you can afford from the best supplier you can afford.

Where to Buy Solar Panels for Home Use?

There are a wide variety of places that offer individual solar panels or solar panel systems that you can purchase and either install yourself or enlist the help of a qualified professional to install.

These are some of the best places to buy solar panels for home use.

  • Amazon
  • eBay
  • Any of the top 10 search results on Google
  • Local, well-established solar companies that have a good reputation

Any of the above options will provide a great platform for purchasing individual panels if you would rather save a little money through buying the components for your system yourself.

As companies often charge a premium for providing all of the components for your system, this can prove to be a great option as long as you take the time to research what is needed for a system large enough to provide your home with all of the power it needs.

Frequently Asked Questions

Here are the most commonly asked questions about buying or leasing solar panels.

 

Q: Is it better to buy or lease solar panels?

A: Though the upfront costs of leasing are typically zero or similar, there is little doubt that buying your solar panels outright is always going to be the best option when possible. In the long run (after roughly 10 years or more), it will save you significantly more money.

 

Q: Should I buy a house with leased solar panels?

A: Buying a house with leased solar panels can be an incredibly risky move. When you purchase a house that is attached to a solar lease agreement, you are then legally obligated to take over the payments for the solar lease. As solar leases typically cost more over time, this can make moving into a property like this incredibly expensive in the long run when the escalation percentages are added to your existing mortgage payments.

 

Q: What are the pros and cons of leasing solar panels?

A: The pros of leasing solar panels are that you will not have to pay anything up front to access solar technology. The initial monthly payments are likely to be very low, and you also will not have to pay for the maintenance and repair of your system. The cons of leasing are that your monthly payments will increase over time, you are not likely to receive an adequate level of service to maintain your panels to an efficient standard, and you will never actually own the solar panels.

 

Q: Is it worth renting solar?

A: It may be worth renting solar. This depends on what you are actually looking to get out of having solar panels attached to your home. If your primary goal is to use a green and renewable energy source as your main power source, then renting solar is a great idea. However, if you are looking to save money over time or to own your own system one day, then solar rentals are a very bad idea.

 

Q: Why is leasing solar a bad idea?

A: Leasing solar is a bad idea because you will never actually own the solar panels on your home. Over time, you are going to pay considerably more than you would if you purchased your system outright.

 

Q: Can you write off a solar lease?

A: Sadly, you are not able to put solar leases down as an expense on your tax return.

 

Q: Is it harder to sell a house with solar panels?

A: It may be significantly harder to sell a house with solar panels. This all depends on the prospective buyer of your property, however. If you own your solar panels outright and the buyer of your home actually wants to make use of solar technology, then selling your home is going to be relatively easy.

However, complications arise when you do not actually own the panels, and the system that you use is instead tied into a solar lease. The buyer of your home will then have to take over the lease payments, making it much more difficult for you to sell your home unless you can find a buyer who is willing to do this.

 

Q: Can I get a mortgage on a house with leased solar panels?

A: You may not be able to get a mortgage on a house with leased solar panels. Even if you can, it is very likely that you will be paying considerably more over time per month due to the panels being attached.

Some lenders will not actually let you take out a mortgage on a property that has leased solar panels attached to it, whereas others may consider it. The issue is the built-in escalation clause that comes with solar leases. It can lead to you paying increasingly more over the years to live in your chosen property when the escalation percentages are added to the mortgage payment amount.

 

Q: Do leased solar panels increase home value?

A: Generally speaking, leased solar panels actually decrease the value of your home because the person who buys your home is going to have to take over the payments on the solar lease.

 

Q: Can I get tax credits if I lease solar panels?

A: Unfortunately, you cannot. If you lease solar panels, then all of the money that you might be able to claim back in the form of incentives and tax rebates will instead go to the solar company since they are the true owner of the solar system mounted on your property.

If you had planned to factor tax rebates or other incentives into your solar lease budget, then it is imperative that you omit any benefit they might have offered from your annual calculations.

 

Q: What happens after the solar lease is up?

A: Once your solar lease comes to an end, you will have several options at your disposal. You can choose to upgrade your system and sign a new lease, or you may wish to make one large, final lump sum payment and become the owner of your solar system.

You will also have the option of having your solar panels removed if you wish to do so. Usually, there are collection and contract termination fees associated with this.

Q: How much does it cost to buy out a solar panel lease?

A: The cost of buying out of a solar panel lease varies significantly from lease provider to lease provider. The issue that comes with buying out early is that there is usually a fairly significant contract termination fee.

It is also likely that the company will charge an amount equivalent to the income that they would have gained over the course of the solar lease from the built-in escalation clause in your contract. This can make the final buy-out cost very significant and a total non-option for many people.

 

Q: Can you get out of a solar lease?

A: Yes, you can get out of a solar lease. The most straightforward way to do this is to continue making your monthly lease payments until the full payment term period elapses, thus bringing your lease to an effective end.

The other means of getting out of a solar lease is through buying out. This usually involves making a hefty final payment that takes the combined value of your remaining payments and significant additional charges to allow you to exit the lease agreement early.

 

Q: Do solar panel companies own your roof?

A: Technically, solar panel companies will never actually own your roof, but they have free rein over what they do with it. When you enter into a lease agreement, you are effectively granting permission for the solar company to build the equivalent of a power plant on the roof of your home. This means that even though the solar company does not own your roof, they are allowed to place their panels wherever they wish on its surface at their leisure and according to their preferred design.

 

Q: What is the best solar company?

A: SunPower is widely regarded as being the best solar company available at present.

 

Q: Is buying a home with leased solar panels a bad idea?

A: Yes, it is. If you buy a home with leased solar panels, you are going to have to pay the monthly lease payments on top of your mortgage unless the lease is almost at an end or you have the spare money to buy out of the lease early. This is going to become more and more expensive over time.

 

Q: Where can I find a solar panel lease calculator online?

A: There are many places online where you can find effective solar lease calculators. You can use the chart provided earlier in this guide for an accurate overview of annual leasing costs, or a simple Google search for solar lease calculators will provide a wide variety of useful, free results.

 

Q: Is there a tax credit available for leasing solar panels?

A: All tax credits and solar incentives are only available for the owners of solar panel systems. In the instance of a solar lease, this will be the solar company and not the person leasing the panels. This means that you will not be able to access any of the tax incentives yourself.

Buy or Lease Solar Panels: Conclusion

One thing is for sure, going solar is always a great idea if you are passionate about reducing your impact on the environment. No matter how you choose to access solar panels, this is always going to be one of the definitive end results you achieve.

The complications of using solar technology start to arise when you dive into the financial side of things. If you have ambitions to make enormous cost savings in your pursuit of a greener planet, you are going to need plenty of spare cash to purchase solar panels outright.

The problem is that the majority of people just do not have this kind of cash to spare in the amounts ($10,000–$15,000 or more) that we are talking about. Regardless, they might still be especially passionate about going solar to meet their energy requirements in a green manner.

If that is the case, then in an ideal world, they will take out a solar loan as this is realistically the next best thing to being able to purchase a system outright. What if their credit rating is bad though? What other options do they have at their disposal?

Obviously, this is where leasing and PPA agreements come into play. PPA agreements are not widely available. Where they are, they may prove to be a significantly better option than a lease if you have a little money to put down up front because they are going to cost less per month than leasing. With that said, if the spare cash to enter into a PPA is not available or PPA agreements are not available in your area, your only last resort option is going to be a solar lease.

Leasing is fine if your main priority is to go green, but if you are trying to access any of the financial benefits of using solar including long-term cost savings and tax rebates, then it is safe to say that a solar lease is not going to be the right option for you. We hope that the information we have provided you with today proves useful, and we encourage you to share this post with others who are weighing up solar leasing vs buying. Our advice may just prove to be priceless in the long run.

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