Last Updated on: 22nd January 2021, 03:29 am
Solar panels have become more popular among property owners by providing a sustainable option and significant savings. However, moving to this alternative power source comes with the decision on whether to buy or lease solar panels. Before settling on a solar energy system, it is essential to weigh all the options to make the right decision.
Buy vs. Lease Solar Panels
Whether you prefer to buy or lease solar panels, you will still get clean solar energy and save on utility bills. However, the main difference comes with the financial goals and ownership preferences of the property owner. The option you choose will determine the amount of money you save over a certain period. Both leasing and buying solar panels come with pros and cons. In this post, we begin by exploring why property owners prefer to purchase solar panels.
The Advantages of Buying Solar Panels
1. Maximize your Financial Benefits
Homeowners who prefer to buy their solar panels maximize their financial benefits in various ways. Once the solar panels are installed, the utility bill savings starts to increase. After about 5 to 7 years, the accumulated savings surpasses the initial cost of the solar panels. Once you reach this point, you will enjoy solar electricity for free for the rest of your life.
2. Flexible Financing Options
If you decide to buy solar panels, you will have access to different financing options. Firstly, a homeowner can choose to purchase on a cash basis. The cost of the solar panels depends on the size of your roof and the local regulations.
Secondly, property owners can benefit from home equity loans that are very cost-effective. When getting the loan, your property serves as the collateral. The loans range from 5 to 20 years, reducing your financial constraints.
Thirdly, various financial institutions offer solar loans, both secured and unsecured. With unsecured solar loans, you do not need to have your home as collateral. Moreover, most of the local solar companies offer these loans.
3. Full Ownership
Once you buy the solar panels, you gain full ownership, unlike leasing. With leasing, the ownership rights remain with the solar company. Therefore, when you own the solar panels, you can make decisions such as maintenances and replacements on your own for improved performance and savings. Furthermore, when it comes to changing your roof orientation or making changes, you have full control of the panels.
4. Reduce Federal and State Tax Liability
Once you buy solar panels, you can claim a federal investment tax credit. Depending on your tax liability, claiming this tax credit is easy and reduces your overall costs for solar panels. Before purchasing, it is crucial to find out if you are eligible or not for the tax credit.
5. Increase Your Property Value
Buying solar panels for your home increases its market value. This is because most home buyers today are aware of the benefits that come with solar electricity. Most home buyers will be willing to purchase homes with solar panels than those without. Additionally, homes installed with solar panels sell for more money, whereby buyers are willing to pay higher premiums to acquire such homes.
If you are planning to list your home in the future, ensure that you consider buying solar panels instead of leasing. Leasing scares away home buyers since the financial benefits are not long-lasting.
Advantages of Leasing Solar Panels
1. Little or No Upfront Cost
Leasing solar panels is an excellent option for homeowners who do not want to spend upfront costs. You can get solar panels at little or no charge since you do not need to buy them. When leasing, the solar panels company comes to your property and installs the panels for you.
After the solar system is installed, you can start using clean electricity immediately. Unlike when buying, where you have to wait for purchase and installations, with leasing, you enjoy energy savings as soon as possible. The only costs involved when leasing a solar system is the monthly payments that you pay to the lease provider.
2. No Maintenance Costs
Solar panels require regular maintenance and services so that they can last for longer and prevent damages. These maintenance costs are costly to homeowners. However, with leasing, the solar company maintains the solar power system for you. Today, there are various solar companies offering leasing agreements to homeowners that include free services and repairs.
Additionally, you do not need to keep track of the last and next maintenance dates for the panels with leasing. The solar company keeps track of the performance of the systems. Whenever they encounter a problem, they will know and send their experts to service the panels.
3. Saves on Costs
When you lease solar panels, the monthly payments are less than what utility companies charge for grid electricity. After installation, you can begin to save on energy bills from day one.
For businesses, leasing solar panels helps save on costs. If you have rented a business property, buying the systems can be expensive compared to leasing. Most of the leasing agreements last for 10 to 20 years, which is ideal if you want to change your business location.
4. It is Affordable
If you do not qualify for tax credits or incentives, leasing a solar system is the best option. Tax credits are ideal for people who want to purchase the panels. Furthermore, you do not need to get loans from banks and financial institutions to get solar panels. This reduces your tax burdens and interest fees associated with owning solar panels.
No matter the solar option you choose, you are guaranteed monthly money savings of between 10% to 30% depending on your property and incentives around your state. Moreover, you will have a reduction in the amount of carbon footprint.
Regardless of the option you select, you must understand your financial goals. You should also talk to solar system professionals that will give you the best advice that matches your preferences. Make sure that you find a reputable solar company in your state. With this, you will be able to harness power from the sun and contribute to the planet.