Buying VS. Leasing: Solar Panels - Which is Better?
As solar makes its way into mainstream building and construction, homeowners and buyers all tend to ask the same question; which is better? Leasing or owning? As solar companies spring up all over the country, it is easy to see that solar is making a true impact in the marketplace as consumers continually "go green" in an effort to help the environment.
According to Green Energy Money, there are several known drawbacks to leasing solar panels. According to recent guidelines, some drawbacks to be considered are:
- The solar leasing companies own the solar panels, so they, not you, get the 30% federal tax credit.
- The solar leasing lease companies own the power that your panels generate, so although you will get a reduction in your monthly bill you will still be obligated to continue to pay the 80-90% utility payment to the solar leasing company. In essence they become your utility provider.
- You're buying your energy from the solar service provider, but in cases where your panels don't generate enough power you also have to buy your energy from your traditional utility.
- The price per kilowatt may be fixed, but solar service providers often build in an annual price escalator of 1-5%.
- Transferring property ownership with a solar lease can be problematic. Solar contracts require the new owner to take over the leases and terms, which often aren't attractive terms to potential new owners who would prefer to own the equipment. In these cases the current owner may be liable for the remaining lease term and any fees associated with removing the equipment.
- You can't claim ownership or get credit on your appraised value with leased solar panels.
In contrast, there are also financial benefits to owning the panels, such as;
- You harvest the SRECs (solar renewable energy credits)
- You pay little or no money for your electricity bill, except in cloudier weather when your system generates less electricity
- You own the panels, so you can legally sell them if you sell your home, and you can receive a potential higher green premium on your sale or on a new appraised value. Many consumers now recognize solar power as a justifiable premium cost and value when making property purchase decisions.
Overall, the article claims that leasing solar panels as a homeowner or building owner is not the best business practice. Without all the financial benefits gained in ownership, leasing does not put the owner in the best financial position for a return on the investment.