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.

Buying Solar Panels

Best Ways to Pay

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.

Why Leasing Solar Panels Isn’t Ideal

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.

The Maintenance Myth

• Reality: Maintenance plans often add no real value.
• Warranty Coverage: Equipment issues are typically covered under warranties.
• Insurance: Homeowners insurance generally protects against storm damage.
• Roof-Mounted Systems: Usually covered under standard policies.
• Ground-Mounted Systems: May require an insurance rider.

Bottom Line: Buying Beats Leasing

• Ownership Perks: Full control, better long-term savings, and eligibility for tax credits and local incentives.
• Financing Options: With favorable loans available, even financing beats leasing in the long run.
• Pro Tip: Always inform your insurer about your solar installation to ensure adequate coverage.

Owning your solar panels may require a higher upfront investment, but the financial and practical benefits far outweigh those of leasing.

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