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Leasing solar panels often seems like a more attractive option when starting your solar journey, but is leasing really better than buying solar panels? The thought of not having to pay a large sum upfront might be comforting. However, there are other aspects of solar panel leases that must be understood before making a decision.
Whether leased or bought outright, getting a solar power system is certainly an excellent decision. Some of the biggest reasons for this are a continued drop in prices for solar equipment,
a variety of incentives, and of course, the continued escalation of conventional grid power costs. Whether or not solar makes financial sense, is now far less debatable than it was a decade or two ago.
As for the question of leasing solar panels, the answer depends on a few factors and will vary from household-to-household. Let us take a look at these factors one-by-one.
1. No upfront payment in leasing solar panels:
This is the most popular difference between buying and leasing solar systems. Although solar panels are a great investment, some customers may still find their price tag high. Leasing gives the opportunity of not having to pay a large sum upfront. This is the Unique Selling Proposition of the lease model for solar systems, and possibly the only one.
However, financing options such as solar loans also take away the need for upfront payments. In the long-term, financed systems might be slightly less cost-effective than cash-purchased systems, but cumulatively homeowners do save significantly more money over leased systems. This brings us to our next, important difference.
2. Greater total savings in buying solar panels:
The biggest difference between buying and leasing a solar system is the money saved over its lifetime. When you buy a system, the system gets paid off in a few years, freeing you from recurring lease payments of 20-25 years. Even with systems purchased with a loan, you can save significantly more than leased systems. Over the lifespan of the solar system, the amount spent by leasing might be spread out but is significantly higher than the total amount spent by buying.
In addition to that, you are only eligible for the solar incentives if you are the owner of the system. For a leased system, this means that even though the solar panels are mounted on your roof, it is the leasing company that will get the benefits such as tax incentives or direct rebates. This decreases a leased system’s money-saving potential even further.
3. No maintenance responsibility with a solar lease:
Another benefit of leasing a solar system is that you don’t have to look after its maintenance requirements. The leasing company owns, operates, and maintains the system for you. If you are buying a system, you may need to pay someone to take care of the system's maintenance.
However, solar systems have no moving parts, making them require very low maintenance. Additionally, buying solar panels from a reliable brand such as LG solar means you likely won't have to worry about much maintenance, thanks to solidly built panels and an impressive 25-year limited warranty on product, performance and labor.
4. Selling Your Home:
If there is a possibility of you selling your home in a few years, it might be a decisive factor in the choice between buying and leasing solar. Several studies show that homes equipped with solar panels can often exceed neighborhood comps by up to 10% vs. homes without solar.
On the other hand, selling a home with a leased system offers its own challenges. The fact that the home is owned by you but the solar plant is not might make selling the home complicated. You may need to purchase the system at market value or transfer the lease to the new homeowner, who should be willing to lease it.
Going solar is an important decision, and understanding what fits your requirements best is essential. There are a few areas where leasing solar panels for your home might have its advantages. However, if you want to maximize your benefits, buying solar panels outright almost always makes more sense - just as going with a reliable brand like LG solar guarantees excellent savings through high output for decades. Regardless of which option you choose, going solar is a sensible decision that will help your wallet as well as the environment.
