When a family decides to invest in a photovoltaic system, the next question to answer is which option is best, owning or leasing solar? In general, buying the system outright will offer more benefits to the resident, while contracting the purchase out to a third party will aid those that want to get it installed right away. In either case, however, the homeowner will save money on utility bills and can become independent of the grid, assuming that the setup can generate enough energy to power the home.
With the sudden boom of companies offering alternative methods for purchasing PV systems, many families want to know which is better, owning or leasing solar? The truth is, the only major reason why someone would decide to lease the panels is if they don’t have the finances to purchase everything outright. Many installers offer the setup for zero down, and keep the monthly payments under what someone would pay for standard electricity. With this option, a resident can start saving around 15 percent on their energy bills right away. However, a consumer needs to read the entire contract before he or she signs it, because some include escalator clauses that slowly increase the monthly payments over time. These should be avoided if possible.
This mitigates the problem with procuring enough financing to cover the cost of the setup, which can cost thousands. So, should a family consider owning or leasing solar? If cash is tight and it’s tough to find a loan with favorable terms, then the latter may not just be the better option, it may the only choice.
With that being said, there are many reasons why a resident should purchase the system outright if the financing is there. While most PV contracts may last 15 or so years, when buying the panels, the payback period is only around four or five years. Assuming that the family doesn’t have to take out a bank loan to cover the cost, this means that the financial obligation is smaller and shorter in the end. There are several ways to reduce the final cost, including cash rebates and tax incentives from the government and the power company. When contracting the panels out to a third party to buy, the company gets these incentives instead of the homeowner. With them, the price of the setup can be reduced significantly, and may make it possible for cash-strapped people to afford it after all.
With these facts in mind, should a resident consider owning or leasing solar? Once the panels are paid down, the owner decides what to do with them. If the family owns them, then they get free power for the life of the system, which is usually decades in length. If a company owns them, the resident has to sign a new contract to keep them and continue making monthly payments. Finally, selling a house with PV panels can be complicated depending on who actually owns them. So, which makes more sense for a resident about to sell their home, owning or leasing solar? If the resident purchased the system, they can be removed or used to increase the asking price of the home. If they are owned by the company, then whoever is moving in will have to take on the lease, or break it and risk being charged a penalty fee.