Michael Rock Answers: Should I Buy Or Lease Solar Panels For My Home?
I’ve been passionate about sharing my experiences with solar power since I installed solar panels for my home in 2018. My electricity bills were cut to zero the next summer and I got a great tax credit that I put toward my solar panel loan.
I've gotten a lot of questions from listeners who wonder if a solar panel installation might be right for their home, and one of their biggest questions surrounds leasing vs. buying solar panels. It's a more complex decision than just the cost of solar panels, and the experts at Isaksen Solar can talk with you about the variables in solar paneling your home. But here's a basic look at the pros and cons of each option:
- Federal and state tax credits are available to reward you for purchasing a solar system. If you take out a loan to finance your solar panel purchase, these credits will help you pay off the loan that much faster.
- You retain control over the panels on your roof, so if you have any maintenance issues, you work directly with your solar company to resolve them.
- You immediately see savings on your electric bill. The first summer I had my solar panels, Eversource actually ended up owing me money instead of me owing Eversource $400-$500 every month.
- Unless you choose to pay cash for your solar system, you do have to seek financing. The government-subsidized loans have shockingly low interest rates and great terms overall. Speaking for the Rock family, we did the whole project without spending a dollar on a down payment, and it felt almost like free money when we looked at the interest rates.
- You won't have a big, up-front investment to have the solar panels installed. You just sign on the line with the company and you'll quickly see savings.
- Much like leasing an apartment, you are not responsible if the solar system needs repairs. The lease company is liable to fix all issues associated with the system.
- Your lease may contain verbiage that has you paying more money per kilowatt-hour as the years go on. You won't see the dramatic savings you would see if you purchased solar panels, but the good news is you are guaranteed to save money as the price is locked in.
- Leasing agreements for solar systems can complicate a home sale. If you plan on moving before the lease agreement is up (which can typically be 20 to 25 years), you could scare away potential home buyers. Make sure you pick a company that will go the extra mile to make the system look nice. Also make sure the installation company will help with the transfer of the system to the new homeowner.
- Leasing panels is a 25-year commitment for your roof. When you lease panels, you are required to keep the panels on your roof. Make sure you pick a company that will honor its warranty on the leased system.
Installing solar panels, whether it's through a lease or a purchase, is a big decision that has long-term ramifications. Just like you would have your taxes reviewed by a second accountant, it is a good idea to have a second professional review your agreement before you sign up with a solar company.
If you are looking at getting solar right now and you are unsure about the agreement terms, Isaksen offers a free agreement review that walks you through which option is the best for you and your home. Don’t be pressured by a salesperson looking to close a deal. Answer all of your questions about buying solar panels before you commit to anyone and make sure that whatever you choose is 100 percent right for your home.