Buying vs. Leasing

When home owners decided to upgrade their home to include solar panels, they are presented with two major options from many different companies. These options are: to buy solar panels or to lease solar panels from a company.

Should you buy solar panels or lease them? You should absolutely buy them.

At EnviSmart, we don’t want you to get tricked into leasing solar panels from other another company, so here is a side by side comparison of buying solar panels vs. leasing solar panels so that home owners can be better informed.

To Buy or to Lease Solar Panels

Buying Leasing
Tax Incentives When you buy solar panels for the next three years you are able to take advantage of the federal tax incentives for solar. These incentives are currently 30% of your spend on your home’s solar installation. The cost and incentive amount vary depending on the size of your home, system, and electric needs. On average, a 30% incentive translates into $7,000 back in your pocket when you buy your own solar panels When you lease solar panels from a solar provider, you are unable to take advantage of the tax incentives currently in place for solar. In fact, the company from which you are leasing takes the tax incentives as part of their profit margin. This means that on average, when you lease solar panels, you are giving away $7,000 to that company.
Energy Savings With your own personal solar panels you are able to take advantage of 100% of your energy generated. If your system generates more power than you are currently using, you can even sell this power back to the municipal power grid. In the end, you could be paying $0 dollars a month for energy and making up to $1,400 a year from sold power. When you lease solar panels, you only get partial savings on your energy. You still are paying monthly to the company from which you rented for the power being generated on your roof. The savings then are the different between your previous monthly power bill and what the leasing company is charging you. This can be as small as a $7 dollar savings a month. Additionally, if your home generates more power than you use, you not only still have to pay your monthly fee, but the leasing company then sells your excess power back to the grid. They are making even more money off of you!
Monthly Cost If you buy solar panels there is no monthly fee consistently applied to you. You will only pay for whatever energy you use that your panels did not generate. Depending on your home and energy usage this can easily be $0 a month. If you lease solar panels then there is a fixed monthly cost that you must pay to the leasing company to use the power that your home is generating. This is a fixed rate, regardless of energy cost which can fluctuate to be significantly cheaper than what you pay them. Over the course of your extremely long lease, the company will periodically increase your monthly fee despite technology improving and energy becoming more inexpensive.
Fair Price Solar panels that you own outright are purchased at the fairest price possible. This means that you can do research and see the exact cost of the panels that you are purchasing. This ensures the best value for your money. Leased solar panels are significantly bloated in price over the lifetime of the lease. With constant monthly fees, you can end up paying double to triple the cost of the solar panels over the full duration of the lease.
Maintenance When you own the solar panels that are on your roof, you are responsible for the maintenance thereof. Solar panel maintenance consists of the simple task of spraying them with water every 4 months if it has not rained to remove dust. It is easy and simple to care for your solar panels. If you home has leased solar panels on it, then the company is responsible for maintenance of the panels. This means that if you see a drop in the panel’s efficiency due to dust, you have to schedule a visit from the leasing company. Such appointments can take weeks to happen and always have that annoying 4 hour window where the company will come and simply spray off your panels (probably with your own garden hose).
Selling Your Home Solar panels that have been purchased outright significantly increase the value of your home. If you are selling your home after installing solar that you purchased, you can expect to see a return on your investment in an increase in home market value. Leased solar panels significantly complicate the sale of your home. This is because the new owner must qualify for, and accept the lease that you previously entered into. If not, they pay a significant fee to break the lease. If they do not qualify for the lease then this is an easy deal breaker for the sale of your home.
Warranty Solar panels purchased though a company come with a manufacturer warranty through the company that makes the panels themselves. Companies that manufacture solar panels are huge companies such as LG that are going to be around for many years to come. This means that if there is a problem with your panel, you can go directly to the manufacturer for a replacement, resulting in peace of mind. At EnviSmart our solar panels come with a 25 year manufacturer warranty. When you lease solar panels the company that owns them is responsible for any problems that occur with the panels. However, if that leasing company goes out of business or stops servicing your area, then you are responsible for the issue without the safety net of any sort of warranty.