When you’re trying to decide whether it’s better to buy or lease solar panels, the most important factor is your financial goals. Sure, both choices will allow you to access the same renewable energy from the sun. But, in most cases, it makes much more financial sense to buy solar panels. This could mean buying them outright or financing with a solar loan.
Before diving into a comparison of buying vs leasing solar panels, it’s important to note that MOXIE does not offer solar leases. Although we become rambunctiously ecstatic anytime anyone makes the switch to solar energy, we also feel that it’s our responsibility to do more than just convince people to switch, but also, to help them make the best long-term financial decisions.
Buy vs Lease Solar Panels
There are a number of reasons why buying your solar panels and being the owner of your own personal solar energy system will benefit you much greater than a lease. Let’s take a closer look at the differences between buying and leasing solar panels.
Benefits of Buying Solar Panels
It’s similar to owning a house vs renting. Sure they both give you shelter, but eventually renting just doesn’t make financial sense anymore. Compared to leasing, being the owner of your solar energy system provides a number of benefits such as:
- Able to claim solar incentives
- Owner of all energy generated
- Achieve overall savings sooner
First, if you lease solar panels instead of buying, you’re waving goodbye to the many solar incentives that can help you save money right off the bat. There’s the 26% federal investment tax credit (ITC), plus a number of other money-saving solar incentives that vary by state. If you end up having a solar loan, even the interest can be tax-deductible.
Second, when you buy solar panels you essentially become the owner of your own personal energy plant. This means that you will never be susceptible to another energy rate increase again. Plus, with net metering and renewable energy credits (which many states now offer), you can further reduce energy bills and even make some money by selling excess energy back to your utility company.
Lastly, buying solar panels outright may be more costly upfront, but it’s also the fastest way to achieve real energy savings. When you lease or enter a PPA, you’re still essentially renting energy.
When you buy solar panels, the energy savings will eventually cancel out all your upfront costs. This typically happens in 5 to 12 years depending on your location and system size. After that, your essentially getting free energy from the sun!
Solar leases typically last 20-25 years, so you’re not really able to realize that breakeven point, and all the savings that come after.
The Appeal of Solar Leases
Leasing solar panels can appeal to people who want no upfront cost. The tradeoff of this is long-term savings potential and cost consistency. Solar loans are typically fixed, while solar leases increase at a predetermined rate of 1 to 3 percent annually.
Another appeal of solar leases is the lack of responsibility for system maintenance. Just like that first apartment you rented after college, the landlord (system owner) is responsible for any repairs. This sounds nice, however, the reality is that solar panels don’t really need much maintenance. If something does go wrong with the panels or inverters, they’re likely under a lengthy warranty. If you choose a turnkey solar installation company like MOXIE, our in-house technicians are always going to be there to monitor your system’s performance and make any necessary warranty claims and repairs for you.
Recap of Buying vs Leasing Solar Panels
Whether you choose to buy or lease solar panels, you’re going to make a positive and necessary impact on the world. If you have the financial ability to buy your solar panels outright, or secure financing for a solar loan, the payoff will be much greater than a solar lease. Buying allows you to take advantage of all applicable solar panel incentives, be the owner (and potential seller) of all the energy you produce, and achieve much greater savings in the long-run.