The unlimited energy coming from the sun is the cleanest source of energy for humans if correctly utilized. The best way to utilize this free energy is to use solar panels and convert them into electricity. There are many benefits of solar energy which include financial and environmental benefits. Solar energy inhibits pollution and carbon emissions. The financial benefits include cutting down your electricity bill to great extent. It is a long-term investment that gives the highest return to the investor.
The price shock may cause you to alter your decision if you are looking for the best solar panels to power your house and protect the environment. There is another choice, though, which involves leasing solar panels rather than purchasing them outright. Both methods have their pros and cons. We will discuss in detail all about leasing and purchasing solar panels. You will get all the required information in just 5-7 minutes of reading.
What is Leasing Solar Panels?
Customers who might lack the money reserves necessary for the initial investment in solar panels can still make the switch to solar energy by leasing solar panels. Nevertheless, leasing solar panels means you don’t own them, unlike buying solar panels or utilizing a payment plan to buy solar panels. The equipment is owned by a third party.
What is Buying Solar Panels?
There may or may not be a payment plan available when you purchase solar panels. Those who buy solar panels may be eligible for extra credits in addition to the state or manufacturer rebates. Yet, there will inevitably be a down payment for solar panels. It’s recommended to request prices from your preferred solar installer or company. Buying is different from leasing. You are the owner of your solar system when you have bought it.
You can understand the difference between Leasing and Buying solar panels:
|LEASING SOLAR PANELS||BUYING SOLAR PANELS|
|Third-party owns the panels||The buyer owns the panels|
|Limited upfront cost||High upfront costs|
|Pay monthly||Can pay off or pay back the investment|
|Can save on utility bills||Can save on utility bills|
Leasing Solar Panels Cost:
Leasing solar panels will often run you $50 to $250 a month. The amount of energy you consume, the company, where you live, and your credit score all play a part in how high this bill will be. Also, some solar businesses want a down payment, while others let you lease with no money down. You should think about these expenses while deciding whether or not to lease a solar panel system.
Which Payment Option Is Best?
All the payment methods available for purchasing or leasing solar panels can be viewed in a few different ways. How long you want to stay in the house and how much money you have available to invest in solar panels may be the two major considerations when weighing these possibilities.
The several methods to view the solar panel payment choices that are offered for purchase or lease are as follows. The length of your stay in the house and the amount of money you have to put towards solar panels may be the two major considerations when weighing these possibilities.
Yet, you might be able to start leasing solar panels with little or no down payment. Even if you are unable to independently invest in solar panels, this is an appealing method to start saving money on power bills and preserving the environment, even if you are not eligible for tax credits or reimbursements.
Solar loans typically have a lifespan of 20 years, while some are only offered temporarily. Owning is ultimately the most cost-effective option because the typical payback period for customers who own solar panels is seven to ten years.
Payment Methods for Solar Panels:
Although paying cash ahead for solar panels is more expensive in the long run, it is still the most affordable option to get solar panels. This is because paying cash for solar panels prevents interest from accumulating on the payments.
Alternatively, you may start “paying them back” right away by saving money on power bills when you get the solar panels. You can fully understand the cost of solar panels without any additional costs or ambiguous language.
Home Equity Loan:
A home equity loan could be a smart option to secure a low-interest rate if you wish to fund the purchase of solar panels. You must first have equity in your house to obtain a HELOC, often known as. The terms and conditions will then be negotiated between you and the lender. Once your HELOC application has been accepted, you may buy the solar panels upfront and then repay the HELOC through the lender or the buyer of the loan.
With a solar loan, you may spread out your payments over the loan’s terms and still be eligible for rebates and incentives related to buying solar panels. You will be assessed interest throughout the loan duration, just like with any other loan.
It implies that you will ultimately spend more than the solar panel’s initial cash price. With a loan, you own the system, as opposed to having a solar lease, which is the difference between the two. While looking for a solar loan, compare rates and terms from several lenders.
What You Can Gain by Leasing
A deficiency of cash funds can be problematic while buying solar panels. In this case, leasing can be a very good option for you.
Pros of Leasing:
You get the following advantages when you lease solar panels:
Little to No Upfront Costs
You might be able to install solar panels on your house with little to no money down, depending on the specifics of the solar lease. Even though you will keep paying the lease until it is over, you will also save money on your electricity bill.
Avoid Maintenance Costs and Efforts:
Although they require little care, solar panels are not completely maintenance-free. Until you have a solar lease, all solar panel issues should be paid by the third-party owner under a lease. You are just left with the task of occasionally cleaning the panels of dirt.
What You Can Lose by Leasing
Leasing looks like a very good option which is true but there are some negative sides. The following are the disadvantages of leasing solar panels.
Cons of Leasing:
You will have to deal with the following issue if you lease the solar panels:
Ineligible for Rebates and Incentives:
You cannot get government or private rebates or incentives for solar panels when you have a solar lease since you do not own the system. Depending on where you reside, the financial benefits can be sufficient to make buying solar panels the preferable choice.
The Home Can Be Hard to Sell:
Although solar panels in general add value to a home, a home with leased solar panels can complicate a real estate transaction. If the panels cannot be moved, or the lease cannot be transferred to the new owner (either because they are disinterested or the lease originator will not agree), then you may have to pay more to break the contract.
What You Can Gain by Buying
The fact cannot be denied that buying solar panels is the best option. You’re the owner of the solar panel and enjoy all types of rebates and tax credits.
Pros of Buying Solar Panels:
The following are the benefits of buying solar panels:
Eligible for Rebates and Incentives:
You will be eligible for government and private monetary incentives if you own the solar panels. They give you complete ownership of the system while significantly lowering the cost of the solar panels.
You may reduce your monthly utility costs whether you buy or lease solar panels. The difference is that when you lease solar panels, you must make payments for the duration of the lease, however, when you own solar panels, you may not have to make payments and may just take advantage of the monthly savings. This makes acquiring a much better choice if you intend to utilize solar panels for many years to come.
Tax Credits and Incentives:
Government tax and incentives can decrease the cost of solar panels by a great value. There are two types of tax if you buy solar panels.
Federal Solar Tax Credit:
If you own the system, you may claim 26% of the cost of putting solar panels on your house from your federal taxes through the Investment Tax Credit, generally known as the federal solar tax credit.
State Tax Credits:
You may or may not be qualified for a tax credit for the purchase of solar panels depending on your state. Leasing could be useful if your state does not provide a tax credit because one of the major advantages of buying solar panels is monetary incentives.
Buying and leasing solar panels are completely different methods to move to solar energy from conventional grid energy. Both methods of acquiring solar panels under discussion have their advantages and disadvantages. Buying solar panels is the best option if you have extra cash in your bank. You will enjoy all types of benefits of tax rebates and incentives offered by the government and private companies. Your solar panels will pay back their cost in almost 5-10 years depending upon your investment. After that, you will enjoy the free-of-cost energy until the working life of your solar panels.
When you lease solar panels, you may benefit from lower utility costs and environmental protection without having a significant immediate impact on your finances. You might be able to purchase the solar panels after the lease, depending on the programs and circumstances. However, you cannot derive the benefits of tax and rebates until you are the owner of the solar system. Hence, buying solar panels should be considered the first option when planning to move to solar energy.