Leasing vs. Owning a Solar System - Pros and Cons

Introduction

• Objective: Explore the pros and cons of leasing vs. owning a home solar system.
• Focus: Financial aspects, resale value, decision-making.

Definitions

• Lease: Payment every month, similar to leasing a vehicle.
• PPA (Power Purchase Agreement): Purchase power at a fixed kWh price, not the panels themselves.

Leasing a Solar System

Advantages

• Lower Upfront Costs: No need to pay for the system upfront or take out a loan.
• Immediate Savings: Reduced energy bills without initial high costs.

Disadvantages

• No Tax Credits/Incentives: Less likely to be eligible for tax benefits.
• Complication in Resale: Lease might make selling the home more difficult.
• Annual Increase: Payments might increase by 1-3% annually.
• Savings: Around 10-30% on utility bills, consistent payment easier for budgeting.

Owning a Solar System

Advantages

• Ownership: The system becomes your asset—not the leasing company’s.
• Tax Credits/Incentives: Eligibility for significant financial benefits.
• Resale Value: Increases home value by 3-4% on average.
• Return on Investment: Solar buyback period of 8-9 years.

Disadvantages

• Upfront Costs: Paying for the system either via cash or financing options.

Financial Considerations

• Lease Cost: Monthly fee for 20-25 years, slight annual increase.
• Ownership Cost: Varies based on system size, tax credits, and incentives.
• Utility Credits: Possible credit if system offsets 100% of energy needs.

Impact on Home Resale Value

Owning

• Increase in Value: More attractive to buyers, increased resale value.
• Faster Sale: Homes with solar systems tend to sell faster.

Leasing

• Complicated Sale: Lease transfer can be tricky.
• Buyer Hesitation: Potential buyers may be reluctant to take on the lease.
• Options: Buy out the lease, transfer to the new homeowner, or relocate the system.

Maximizing Savings and Benefits

• Energy Efficient Appliances: Use high-energy devices during peak solar production.
• Performance Monitoring: Ensure solar system runs optimally.
• Home Energy Monitoring: Identify and upgrade inefficient appliances.

Conclusions: Leasing vs. Owning

• Leasing: Lower upfront costs, immediate savings, zero maintenance, suitable if not planning to sell soon.
• Owning: Maximizes savings, increases home value, better if can afford upfront investment.
• Decision Factors: Unique situation, budget, long-term goals.

Summary

• Review Options: Consider both leasing and owning for potential savings and benefits.
• Professional Advice: Seek guidance from solar experts if unsure.
• Additional Resources: Videos and information on going solar available for further learning.

Final Thoughts

• Informed Decision: Weigh the pros and cons based on your specific needs, budget, and goals.