Over a million American families and businesses have made the switch to solar, while thousands more are joining the movement with each passing day. People throughout the country are taking advantage of solar power to save money, gain energy independence, lower their carbon footprint, as well as create millions of jobs in the solar industry.
One of the most common questions we get at SunPower by Quality Home Services about financing solar panels is, “Should I buy or lease?” The answer to that question, however, depends on each customer’s unique circumstances.
Buying Your Solar Panels
If you are interested in maximizing the long-term financial benefits of going solar, cash purchases and loan options are attractive options. Whether through a loan or obtaining it outright, the main reason for buying a solar power system is the opportunity to claim a valuable tax credit. The U.S. government currently offers a 30% tax credit to those that buy their systems. So if your federal taxes are high enough to qualify for a tax credit, purchasing a solar system will likely produce greater long-term energy costs savings compared to leasing.
The best loans are those that offer $0 down with fixed monthly payments, as well as a full 20-year system warranty and a performance guarantee. Make sure you look for a loan with a low-interest rate that allows you to pay off the system over a reasonable period of time – ten to 20 years – with an option to pay it off sooner.
Leasing Your Solar Panels
On the other hand, solar leases have made solar power more accessible to a wider range of homeowners and have contributed to the significant growth in solar power in residential areas of the country. The main reason why leases are popular is due to instant gratification, allowing customers to immediately pay less for solar electricity than utility electricity.
Even though leasing customers are unlikely to experience long-term savings compared to those who loan or bought their systems outright, many solar lease customers start saving money instantly. These savings can amount to thousands of dollars over the life of the system, all while making a beneficial impact on the environment.
Furthermore, one of the main reasons why people opt to lease relates to tax reasons. If your annual tax bill is relatively low, you might be ineligible to claim the federal tax credit, which makes leasing the better choice. There are leasing packages available that offer $0 down and fixed monthly payments, as well as service packages which are typically better than those offered by loans.