On February 16, 2025 By newsroom Topic: Solar Power Buyers Guide
Leasing solar panels may seem appealing due to low upfront costs and convenience, but owning a system—whether through cash purchase or financing—offers significant long-term benefits. Here's a breakdown to help you decide.
Cash Purchase
- Cost: $15,000–$20,000 (after tax credits).
- Savings: Reduces electricity bills by 70–100%.
- Payback Time: 5–7 years.
Home Equity Loan
- Interest Rate: 3–5%.
- Features:
- Fixed rates for 5–20 years.
- Tax-deductible interest.
- Best for: Cost-effective financing with collateral (your home).
Solar Loan
- Types: Secured (collateral required) or unsecured (no collateral).
- Features:
- Higher rates than home equity loans.
- Non-tax-deductible interest.
- Tips: Shop around to avoid high fees; explore Fannie Mae’s HomeStyle Energy Mortgage Program.
Limited Savings
- Buyers save significantly more than lessees.
- Escalator Clause: Lease payments may rise by ~3% annually, diminishing savings.
Loss of Control
- Leasing companies prioritize profit over aesthetics or personal preference.
- Panels may be installed in visible, undesirable locations (e.g., facing the street).
Home Resale Challenges
- Leases can deter potential buyers.
- Early buyouts are costly (e.g., $21,000 for the Barbers in Clovis, CA).
End-of-Lease Uncertainty
- Solar companies can remove systems after the lease term, ending your savings.
- Relocation costs for leased systems can exceed $1,000.
Owning your solar panels may require a higher upfront investment, but the financial and practical benefits far outweigh those of leasing.