Posted by ECOGREENWORLD on 04/15/2016

TO LEASE OR BUY SOLAR PV PANELS … That is the question

TO LEASE OR BUY SOLAR PV PANELS … That is the question

Many people who’ve done their homework and understand the advantages of harnessing the power of the sun, for solar power energy production, are wondering whether to buy or lease solar. Solar panel installations are available for purchase (you own the system) or as 20 years solar leases (technically owned by a 3rd party and sometimes marketed as FREE). Should I lease or buy Solar Panels? … That is the question. Whether to invest in a solar panel purchase, or sign a contract for a solar panel installation with a long-term lease/PPA, what’s best for one person is not necessarily the right choice for their neighbor. When you’re ready to go solar to power your home, be prepared, before calling a solar consultant sales person. Understanding the advantages and disadvantages of a solar lease vs. a solar power purchase option, is worth some research, thought and preparation on your end. The good news is, whichever option you choose, solar energy will yield significant electric savings for you and your family for years to come.

There’s no one answer fits all when determining the cost of a solar panel installation. Solar panel installers may offer you proposals comparing the options, to either buy or lease solar power. The best solar power energy production choice, depends on your solar power goals, personal objectives, and target solar cost and investment. To make the right choice first answer the following questions about what your looking to gain installing solar panels on your home.

What motivates you most about going solar? You may want to have energy independence from your local utility, save money, or to be more green.

Do you want the maximum long term savings, or minimum concerns regarding upkeep of the system?

Are you technically inclined? Will you want to check your electric bill and/or monitor your system daily/weekly/monthly to keep track of solar electricity production; or would you rather have the solar company handle every aspect of the system’s performance for 20 years?

Do you have good credit?

Do you have assets available to invest in solar to yield the highest long-term returns?

How long to you expect to own your home?

Will your energy use remain the same over the years or be more or less?

By answering key questions before speaking to a solar consultant — who no doubt will be intent on selling you a solar system — you’ll be prepared to negotiate the best financing, to fulfill your objectives for going solar.

The difference between a solar purchase and solar lease falls into two basic categories: financial return, and energy independence. A Solar purchase, typically has a higher long-term financial return, and will make you more energy independent, because you own the solar system. A 20 year solar lease is more worry free, because a 3rd party owns and maintains the system, and supplies you clean solar energy at a reduced rate, that’s typically fixed for the entire 20 year term. In both cases you will save money. What’s best for you… is up to you!

Solar consultants are usually full-time employees of the solar company they work for, and tend to steer you in the direction they feel is easiest for them, to close the sale. That’s not necessarily a bad thing, as their time is valuable, and so is yours. The answer is to be prepared with a good understanding of what will work best for you, before scheduling an appointment with a solar consultant. Keep in mind, the large national solar companies who do leasing and PPA’s, prefer that you lease versus purchase solar. Most local companies that sell solar, would rather you do a purchase. The distinction is their business models are different. It’s easier and more profitable for a solar leasing company to sell you a solar lease. Conversely, well established, local solar companies have been selling and installing solar systems for years, so in their case, it’s less work, and more profitable to sell you a solar system. Be informed, by knowing what you want, and why, rather than be maneuvered into the preferred option of the solar salesman (woman).

The deciding factor on whether to buy or lease solar for your home, is knowing what’s best for your goals and pocketbook. As yourself, what goals and expectations from solar are ideal for you? It is saving the most money over time… or would you be happier with a bit more modest savings, and letting another company handle all the technical aspects of your system? Before scheduling a solar site visit with a solar consultant think about why you want solar and what you can afford to invest to get it. Leasing companies typically require a higher credit score. Do you have a credit score over 680? If not, a lease may not be approved. No worries — purchasing solar can yield greater savings, and solar is very low maintenance technology.

The higher the down payment for a purchase, the higher your long-term savings because you finance a lower amount. With a lower credit score, purchasing may be your only option. Some States have subsidized solar financing programs and home equity loans, typically the lowest cost financing solutions for a purchase solar. If you have cash in the bank making very low interest, consider that solar as an investment has a very high yield. If you have liquid funds and pay federal (and in some cases state taxes), you will get a significant tax refund, by going solar. A good solar consultant, will prepare a proposal that compares lease options versus purchase return on investment, and charts showing local rebates, federal and state tax credits, and long-term savings, on a yearly basis.

Another consideration is how long do you expect to be in your home? 5 Years, 15, 20 years. A sort of hybrid lease option, is called a “Prepay”. Choose the Prepay if you can afford the upfront payment, you want the ease of a lease, a performance guarantee on production for 20 years, and the best return on investment from a lease. If you sell your home, the new homeowner will have a worry free fully paid off lease for the balance of the term and no maintenance concerns. With a monthly payment plan, leasing companies will transfer the lease, to your home buyer. If you have a payment lower than current electric rates, it’s an attractive incentive to a new owner. A purchase is also attractive to a new homeowner. Owning your solar system gives you maximum flexibility, you can remove it and sell it if the new owner doesn’t want it (but most likely they’re happy to buy a solar home!). You can add batteries at your own discretion down the line if you choose, you can add onto the solar system, and if someone new buys your home, they get the solar system as part of the deal free and clear.

Buy or Lease — rest assured solar is an excellent investment,. As long as you have a home that gets good sunlight, and doesn’t have big trees above the roof line close to your house, solar will save you a bundle, for years to come. Solar Panels have no moving parts, and solar manufacturers warranties for output is typically 25 years. To be safe if you purchase solar, I recommend rolling in a 20 year inverter maintenance contract for peace of mind.

Take the time to answer the questions above and talk to your family. Consider the tax implications. Be an informed solar buyer, rather than have the solar consultant maneuver you into their ideal solution. Solar consultants are very busy, because many people want solar. Their goal is to make a one call close, so you’re comfortable signing a contract when they visit your home. That’s not a bad thing, because they have places to go and people to see, and your time is valuable too. Try and schedule a site visit when all the decision makers are present (your significant other may not be happy if they’re left in the dark and their questions about solar go unanswered).

Think about your goals for going solar, then call several reputable solar installers, and ask them to email you an estimate or do a phone consultation to start. Most solar companies use satellite imagery and estimating software, to prepare a proposal, before your site visit. If you want to make the most of everyone’s time, start with a web/phone consultation and request that be followed by a consultant who visits your home. Knowing costs, specifics, and being prepared to ask questions before a solar consultant visit, will help you to make an informed decision about, solar leasing versus a solar purchase.

Going solar is a solid, dependable investment. Whether to buy or lease solar is up to you as an individual homeowner, and the answer is what works for your budget, and meets your objectives. Most important, is to be sure you’re working with a local or national solar company with an excellent reputation, and to be an informed buyer so you get — The best solar deal for you!

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