There is no doubt that installing solar panels on your home can have a number of benefits. According to a recent article in Forbes, installing solar panels can reduce your carbon footprint and help save an average of $84 per month on your electricity bill. However, the debate on leasing versus purchasing or financing rooftop solar panels continues to heat up — leaving homeowners confused as to which option is best.
The reason for this confusion can be attributed to the advantages and drawbacks each option presents.
Making solar affordable
The national average of up-front costs for adding solar panels to a home is listed as $17,000, according to the Forbes article. Since most leasing arrangements don’t require a payment upfront, a major benefit for leasing solar panels is that it makes solar more affordable. A recent Bloomberg article states that leasing helped spur a 38 percent jump in U.S. residential installations in 2013.
The fine print
But, leasing may not be the best option for all, especially for homeowners who are expecting to put their house up for sale in the near future. Depending on contract terms, some leases can last as long as 20 years. This can cause some difficulties when negotiating a sale on a home since the buyer would need to transfer the lease to their name.
Purchasing solar panels is an option for some who can cover costs out-of-pocket but financing is a more common alternative that can often be rolled into mortgage payments. Purchasing or financing a customer-owned installation also comes with tax advantages and will likely increase the value of your home.
Finding the best solution
According to Ecotech Institute faculty member and president of Burdick Technologies Unlimited, LLC, Joe Burdick, there is no one-size-fits-all solution in this debate. With over 30 years of experience in the solar business, Burdick has seen firsthand how both options work or, in some cases, didn’t work.
“I’ve had clients who have had leasing work for them, and loved it,” he says. “But, I have also seen how financing and installing customer-owned panels has its benefits as well.”
“In addition,” Burdick continues, “the financial incentives provided by utilities and government tax credits are often more favorable for customer-owned/financed systems over third-party-owned/leased systems. The details should be explained clearly to the customer by his/her solar provider before the purchase is made.”
Each homeowner must make the decision that works best for them based on their situation, finances, needs and future plans. The true solution is to provide them with education and reliable information that allows them to make an informed decision. Whatever the case, embracing solar can benefit you financially and help support a brighter tomorrow.