Leasing Solar Panels Vs. Buying Solar Panels: Major Differences, Pros And Cons
The biggest commonality between leasing and buying solar panels is that the homeowner can experience utility savings while reducing their impact on the environment. No matter which type of solar panel you’re thinking about, leasing vs. owning is still a valid concern.
Leasing Solar Panels:
Leasing solar panels makes the switch to solar energy more attainable for customers who may not have the cash reserves required for the upfront investment in solar panels. However, unlike buying solar panels, or using a payment plan toward the purchase of solar panels, leasing solar panels means you do not own them. Rather, a third party owns the equipment.
Buying Solar Panels:
When you buy solar panels, there may or may not be a payment plan available. There are often additional credits available to people who purchase solar panels based on the state or the manufacturer’s reimbursements. Still, there is bound to be an upfront investment when you purchase solar panels.
Leasing Solar Panels Cost
On average, leasing solar panels will cost between $50 and $250 per month, usually mimicking your current electric bill. This cost is determined by multiple factors, i.e., how much energy you use, the company, your location and your credit score. Plus, some solar companies require a down payment, while others allow you to lease with a $0-down agreement. These costs should be considered when determining if you should lease a solar panel system. It is important to mention that with a solar lease, you do not own the system and therefore do not qualify for government or private rebates or incentives for the solar panels. Depending on where you live, the cash-based incentives may be significant enough to make purchasing solar panels a much better option.
Ways to Pay for Solar Panels
Paying for solar panels with cash is an upfront expense, however it is ultimately the lowest cost way to purchase and benefit from solar panels. That’s because when you pay for solar panels with cash, you will not accrue interest on the payments.
Instead, from the moment you purchase the solar panels, you can begin “paying them back” by saving money on monthly utility bills. Without hidden fees or fine print, you can have full knowledge over how much the solar panels cost.
Home Equity Loan:
If you want to finance the purchase of solar panels, a home equity loan may be a good way to get a low interest rate. Also known as a HELOC, you first need to have equity in your home. Then, you will work with a lender to work out the terms and conditions. Once you are approved for a HELOC, you can purchase the solar panels upfront and then pay the HELOC back through the lender or the third party to whom they’ve sold the loan.
With a solar loan, you can still be eligible for rebates and incentives associated with purchasing solar panels—while spacing out the payments through the terms of the loan. As with any loan, you will be charged interest over the course of the loan term.
That means you will ultimately end up spending more than the upfront cash rate for the solar panel. The difference between getting a solar loan and using a solar lease is that, with a loan, you own the system. If you are interested in a solar loan, you will need to shop around for the best rates and terms.
At G3, we shop your business around to multiple providers, and make them compete for your business by offering the best possible price. If you are interested in going solar in the most seamless way possible, at the very best price in your area, contact us today.