Owning vs Leasing Solar PanelsNovember 20, 2023
There has been some discussion about “free” solar panels, but the reality is that they aren’t free. Instead, you’re actually signing up for leased solar panels. However, while the marketing is manipulative, leasing can still be a viable option for those who are looking to go solar. But is it better than outright owning your solar panels? That is a difficult question that we hope to help you answer. Here are the pros and cons of buying solar panels vs. leasing them.
Pros of Leasing Solar Panels
Leasing solar panels can be beneficial for some people who feel that the upfront costs of buying them are out of their budget. So signing up for a solar panel lease could be the best option for someone who wants to help the environment by going solar but can’t justify the expense.
On top of that, you’re still benefiting the environment by reducing your carbon footprint. You aren’t using electricity that requires burning fossil fuels, so the planet still benefits from less pollution. This is always a good thing, as every little bit helps in the fight against climate change.
Cons of Leasing Solar Panels
The cons of leasing solar panels are sadly more extensive than the pros. The biggest con is that you won’t get the financial benefits owning solar panels gives you. As we said, solar panels aren’t free – when you lease them, you’re paying a set price every month. More often than not, that price is barely less than what you had originally been paying for electricity. The contract you sign locks in the price that you pay every month. So while you won’t be paying an energy bill every month, you will still be paying a bill that could be the equivalent. Overall, leasing solar is more expensive over the 25+ year lifetime of the system.
On top of that, you won’t get the tax benefits or solar incentives that Massachusetts offers owners of solar panels. Why? Because you only lease the solar panels. They are owned by someone else, which means they get the benefits and incentives. This also means you don’t get any say regarding what kind of solar panels get installed.
Also, because you don’t own them, leasing solar panels adds additional paperwork and hoops to jump through if you decide to sell your home before the lease is up. Any potential homebuyer must be qualified by the leasing company before you can sell your house to them. So while you might not be paying an upfront cost, you might still be getting an unsatisfactory deal by leasing your solar panels.
Pros of Owning Solar Panels
Owning your solar panels comes with major financial benefits, even with an upfront cost. For starters, as the owner of the house and the solar panels, you get the tax benefits. Massachusetts offers the SMART Program on top of the Federal Solar Investment Tax Credit in an effort to bring the state’s emissions down to net zero by 2050.
If you participate in the SMART Program, the state will pay you every month for ten years for your energy production. Meanwhile, the Federal Tax Credit currently allows residential homeowners to credit 30% of the cost of installing solar panels to their federal income tax. Then, of course, there’s the way that solar panels can reduce your monthly energy bill to practically $0 per month. And unlike with leasing solar panels, you aren’t paying someone else a different monthly bill in its place.
The most significant benefit for ownership is it delivers the quickest return on investment and the highest savings from day one and across the 25+ lifetime of the system. Owning solar panels even increases your home’s value, so you can sell it for a higher price if you choose to move. All of these financial benefits means that you could recoup the money you spent buying the solar panels within a few years.
Cons of Owning Solar Panels
The biggest con of buying your solar panels is the higher upfront cost. However, you do get full control when comparing prices, designs, and quality as well as the final say about what solar panels get installed on your roof. Maintaining your solar panels is up to you, though if you get a warranty, this could alleviate those costs for decades.
Overall, buying your solar panels is the better option compared to leasing for a variety of reasons. Even with the upfront cost, you’ll be getting a return on your investment almost immediately, all while benefiting the environment. Leasing is the best alternative for homeowners whose finances are not yet ready to buy solar. However, whichever way you go, you’re still making the right decision by going solar.