Buy Vs Lease Solar Panels

When purchasing solar panels with cash or financing options available to you, the highest return is seen through taking advantage of tax incentives. Homeownership will also increase its value and can be done using a …

When purchasing solar panels with cash or financing options available to you, the highest return is seen through taking advantage of tax incentives.

Homeownership will also increase its value and can be done using a tax-deductible home equity loan or line of credit.

Payback Period

Although solar investments require an upfront financial outlay, their payback timeframe is usually under 10 years in terms of energy savings. Not all homeowners have enough cash available to them to purchase systems outright; in these instances, a lease or power purchase agreement (PPA) might be better.

Solar leasing provides many advantages, including faster installation than buying. To make an informed decision about leasing solar panels, it’s crucial that you understand their long-term costs before making a commitment.

One of the major downsides to solar leasing is a lack of ownership. By leasing, you are effectively renting the equipment from its owner/operator; as a result, energy savings won’t accrue as quickly compared to buying it yourself outright.

Solar lease contracts may include payment escalators that increase your electricity rate each year – something which could reduce or negate any savings if electricity prices increase slower than their escalator increases.

Concerns arise if you decide to move out from under the solar lease contract if you decide to sell. Depending on the terms of your agreement, it may be possible to transfer it to the buyer of your home, though finding someone willing to assume its monthly fee could prove challenging.

Purchase of solar panel systems through outright purchase or loan usually offers more long-term financial gains than leasing or PPA agreements; however, leasing may offer fast and affordable ways to go green while saving money – just make sure to read any fine print carefully to prevent surprises!


The purchase of solar panels offers you tax benefits associated with owning PV systems. Furthermore, their payback period is much shorter when purchased outright rather than through leasing arrangements; however, upfront investments are substantial and due diligence must be conducted on both your home to ensure it can accommodate solar panel systems as well as local tax incentives before making this commitment to purchase solar panels.

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If you don’t have cash available to cover the total cost of a solar system purchase, financing might be an option – however, this will increase the overall costs. As alternatives to financing exist such as power purchase agreements (PPAs) or leases, consider these alternatives before choosing financing as your main solution.

Leasing solar panels is an attractive option that enables you to start saving on energy without incurring an upfront investment, with maintenance and repair handled by the provider of your lease agreement. But keep in mind that over the life of your lease agreement, your monthly payments may increase due to payment escalators clauses; while this might provide short-term energy savings benefits it often ends up costing more in the long run than purchasing cash outright.

Purchase or leasing both can provide savings to your utility bill, though buying is preferable when possible. Owning allows you to take full advantage of Net Energy Metering policies in states, which credits you back for all the electricity your solar panels produce, helping offset periods where your production lags behind consumption such as on cloudy days or nights when production lags behind consumption.

Maintenance for solar systems – whether purchased or leased – is vitally important, both to keep it operating optimally and to reduce any unexpected repairs or replacement costs. If, for instance, your green monitor light turns on but fails to produce electricity, this could indicate an issue requiring inspection and/or cleaning services.

Finally, it’s key that solar panels remain free from obstructions that could compromise their efficiency and performance. Trees that were small when you first installed your panels may now obstruct sunlight and lower energy production – in this instance, it may be necessary to trim or hire someone to trim these trees to restore efficiency.

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Initial costs associated with a solar energy system can be significant; however, initial investments typically pay back within 10 years with electricity savings. Furthermore, buying your panels also protects you from future utility price increases and lock-in periods and allows you to take advantage of the most competitive solar rates available.

Solar equipment should only be purchased if you can afford to make payments upfront or find financing through home equity loans with reasonable interest rates. Otherwise, lease or PPA arrangements could provide alternatives if none of those are possible.

Leasing typically includes an annual payment escalator that increases by at least 2.9% each year, offering initial savings but ultimately leading to reduced total savings over buying and financing a solar energy system.

SolarCraft advises homeowners considering leasing contracts to carefully review the contract’s annual “true-up” process. Annual true-ups compare actual kWh production from your solar panel system with what was projected and guaranteed in its PPA or lease agreement; this allows you to see whether more or less electricity than anticipated is produced than expected, which must then be reflected in future contracts.

One issue to keep in mind when leasing solar panels is its potential effect on property value when selling. Most leasing companies require that the lease be transferred over to a new homeowner or that you repurchase the system; this process can be challenging and costly if a prospective purchaser does not meet your company’s credit standards.

One important consideration when purchasing solar panels is maintenance and repair costs that fall on you as an owner of the system. This factor should be carefully considered if you intend on living in your home for an extended period of time and want the peace of mind of knowing your solar energy system will remain well maintained over its lifespan; typically speaking, ownership maintenance and repair costs tend to be lower than leasing contracts.


As solar technology has advanced, homeowners can now utilize renewable solar energy systems to power their homes off of the electric grid and thus save on utility costs by tapping into this source of power. This type of renewable power also offers cleaner electricity than what may otherwise be found through traditional methods of electricity generation such as coal-powered electricity plants.

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The purchase of a solar photovoltaic system allows the homeowner to take advantage of government incentives only available to owners of their system, which may significantly lower upfront costs of installation, making buying one often the optimal option.

However, leasing can also be an attractive alternative if purchasing is out of the question. While initial outlays may be greater when leasing solar systems, most owners find their energy savings more than cover this initial outlay in time.

In general, leasing solar panel systems is best when you plan to reside in your home for at least the duration of the contract term. Solar lease agreements must be revised or terminated if you intend to move or sell prior to reaching their conclusion.

Solar panels require minimal upkeep, yet can still be damaged by hail and snowfall. To best safeguard your system and the terms of your lease agreement, seek advice from an expert solar technician on how to protect it – such as providing warranties or coverage against any damages that might occur.

Solar leases may present another potential challenge: should you decide to sell your home before the end of your leasing agreement, it can be challenging to transfer the agreement – something which may cause complications during the real estate transaction process and may incur an early termination fee. Luckily, many solar lease providers allow their clients to purchase their solar system at fair market value at the end of each lease agreement; this way you’re sure of avoiding any potential complications when selling in the future.