Buying vs Leasing Solar Panels: How to Make the Best Choice
If you’re thinking about installing solar panels for your home, you have two financing options to choose from—buying your solar panels with cash or a loan, or leasing them. The way you choose to pay for your solar panels will impact your overall savings and return on investment, so it’s important to weigh your options carefully.
In this guide, we compare solar leases vs purchases to help you make the best decision for your home.
What’s the Difference Between Buying & Leasing Solar Panels?
There are two key differences between buying and leasing solar panels: who owns the systems and how you pay for them. When you buy your residential solar panels, you own the system and pay for its installation. When you lease your solar panels, a leasing company pays for the installation, but they also maintain ownership of the system.
Buying Solar Panels
When you buy your solar panels in cash, you own the system outright. It’s a considerable investment, but it results in the highest savings and the best return; every dollar your solar panels save from the moment they’re turned on goes toward recouping your investment. Once you break even, you’ll be making money. Since you don’t have to worry about interest or fees, you’ll break even faster and save more money over the lifespan of your system. Plus, you’ll own your solar panels, which means you receive all the rebates and incentives they qualify for, including the 30% federal tax credit.
You can also own your solar panels if you finance them with a solar loan. A solar loan is a good option if you want to own your solar panels but aren’t prepared to pay for them entirely upfront. A solar loan is similar to any other type of loan—you’ll make monthly payments, according to the terms of the loan, until you’ve paid it off. The only downside to a solar loan is that you will have to pay interest and fees, which increases your overall costs.
Leasing Solar Panels
With a lease, you do not pay for your solar installation upfront. Instead, a leasing company pays to install solar panels on your roof. You then pay the leasing company a monthly fee to use the solar panels. It’s similar to leasing an apartment. The main benefit of leasing solar panels is that you do not have to make an upfront investment. However there are a lot of downsides to leasing. You will own a lease payment every month, though you may have the option to buy out your lease after a set number of years, depending on the terms of your agreement. That means you will never fully eliminate your electricity costs, and your savings will be significantly lower than if you owned your solar panels. Plus, since you don’t own the system, you are not eligible for tax benefits or incentives.
Pros & Cons of Buying vs Leasing Solar Panels
Buying a Solar Panel System
Pros Cons
Own your system Higher upfront investment
Highest savings and return on investment You’re responsible for maintenance
Qualify for 30% solar tax credit
Increases home value
Leasing a Solar Panel System
Pros Cons
Low or no upfront investment You don’t own your system
Leasing company is responsible for maintenance Lower savings
You don’t qualify for the 30% solar tax credit
Can be harder to sell a house with leased solar panels
Is It Better to Lease or Buy Solar Panels?
At Taylor Energy, we recommend buying solar panels with a cash purchase or loan over leasing them, and we do not facilitate solar leases. One of the main benefits of going solar is taking control of your electricity production and costs. If you lease your panels, you don’t get this benefit. Instead, you just move control from your utility company to a solar leasing company.
But, every home is different and the best choice for you will depend on your priorities and budget. Taylor Energy is here to help you make the best decision for your home. We are a highly experienced local solar installer in Sonoma County with over 15 years of experience installing residential solar panels. Reach out today to learn more about your solar financing options. We are here to guide you through every step of the solar journey.
Find the best solar financing option for you. Call (707) 518-9625 or contact us to schedule a free consultation.
Residential Solar
Get a free estimate for residential solar panel installation in Santa Rosa, Petaluma, Sebastopol, and surrounding areas. We are a Tesla Powerwall Certified Installer!
Rebates & Incentives
Save on your solar panel and solar battery installation with California solar incentives. Schedule a free solar consultation with Taylor Energy to learn more about the incentives you’re eligible for.
Commercial Solar
Cut operating costs and increase profit margins with commercial solar panels. Schedule your free commercial solar consultation with Taylor Energy today. We can help you find a solar solution that works for your business.
