Piyush Bakshi

Solar Panels for Your Homes - Lease or Buy If you’re planning to install solar panels at home, then the question of financing the installation will doubtless come up. There are two popular choices that homeowners have – ownership and leasing. Your financial status will play a role in determining which option you select. Let us take a look at the salient features of the two choices that you have for installing solar panels at home. Ownership is of two types, either outright or after you have repaid the loan. With a lease, the PV system is owned by another entity. Your decision will affect the cost, upkeep, benefits, savings, and will also influence the terms of sale, should you want to sell the property. If you wish to gain financial benefits from the installation, then a purchase is a better option. It gives you the opportunity to take advantage of state and federal tax benefits. Businesses can treat solar systems as a depreciable asset and avail tax advantages. Once a solar panel is installed, it adds to the value of your property. A lease will serve your purpose if your main objective is to generate power from alternative resources; the financial benefits from government incentives are not a major attraction for you. You don’t want to take the responsibility for maintaining and repairing the PV panels. If you’re ineligible for state and federal tax credits, then it makes little sense to sink money in owning solar panels. Let’s take a closer look at the main factors. With respect to installation, if you opt for ownership then you may face costs of up to $30,000 before incentives. After incentives, the costs can come down by as much as 50%. The solar installation company will take care of the paperwork. With a lease or purchase power agreement, you can have the system installed with almost no investment. However, financial benefits such as tax credits and rebates go to the owner of the solar panel system. You do not benefit from these. With a purchase, you have to take responsibility for maintaining the system. This is not a difficult job; the panels are durable and are covered by warranties. You may also be supplied with an app that tracks the performance of the solar panels. With a lease, you don’t have to worry about maintaining the system. If you plan to purchase a system by availing a loan, then you need a FICO credit score of 640 or more. The loans may be for up to 20 years, and carry a rate of interest in the range 3% - 8%. A lease may be for a term of up to 25 years. The cost of the lease may increase every year. It can come to a sizeable sum by the end of the lease agreement. Terminating the lease before its expiry may carry penalties. At the end of the lease period, you may be able to purchase the solar power system at a discounted price. Depending upon the financial encouragement offered by your state, you can save as much as 70% of the electricity costs over the life of the solar power system. You save on money by sending power to the grid. With solar leases, you may save up to 30% of the electricity costs. This varies with the incentives offered by your state. As mentioned above, if you wish to sell your property, your buyers must not only be willing to accept the lease but also qualify for it. This is an additional burden for the buyer. If you cannot find a buyer, then you may have to pay a lump sum to the leasing company in order to end the lease. As against this, an owned PV power setup adds to the value of your property. Savings on electricity are a big plus that you can project in front of the buyers.