Solar / June 9, 2021
4 Reasons Solar Panel Ownership Is Better Than A Lease
Solar power is clean energy that not only helps the environment but can also save you a lot of money in the long run. As you research solar panel installation for your home, you will come across two main options: purchase the solar panels or lease them. You can look into off grid solar systems at Arizon.com.au if you are planning to buy cost-effective and modern solar systems.
The upfront cost for the purchase of solar panels is significantly more than leasing, but overall, you will find a lot of advantages to full ownership as opposed to just leasing. Find out about the advantages and learn why the extra investment is worthwhile.
1. Home Value
The value of your home is a big factor when you go to sell your home or refinance. If you lease solar panels, the panels are never included as part of the home. The solar company you leased the panels from would technically own the solar panels. When the lease period ends, the company has every right to remove the panels and collect the equipment.
Even though you save money with the panels, you cannot reap the extra financial benefits. If your home is valued at a higher price, then you can increase your equity and help lower your mortgage rates.
2. Payback Costs and Savings
When you lease a solar panel, you have to pay the price of the lease amount along with any extra electrical charges. When you purchase solar panels, you will have a payback period. This period covers your average monthly electric bill amount before the panel installation and how many months it will take to reach the cost of the solar panels.
For example, the average cost of an 8-kilowatt solar panel installation is $22,480. If your average monthly electric bill is $150 a month, then the payback period would last around 12 years. After the 12-year mark, all of your electricity would essentially be free. The calculations do not include higher months of electric use, rebates, and other options.
When you lease a solar panel, your investment doesn’t lead to anything. You are simply paying a monthly fee without an end goal in mind.
3. Tax Deductions
The payback timeframe is often reduced dramatically when you factor in tax deductions for a solar panel installation. Many states like California offer tax rebates on your solar panel installation, which could save you thousands of dollars, but those savings do not apply with leased solar panels.
Leased panels may advertise deals like free installation and no start-up costs, but you also get no ownership with those options. The tax deductions can make a difference on your taxes, and some companies offer the rebates instantly. Future deductions may also be available when your home relies on all renewable energy.
4. Lease Prices
When you own your solar panels, you can pay for the solar panels in full or set up a payment plan through finance companies. In most cases, you will have a set monthly fee until you pay off the solar panels. With a lease, you may only have a locked-in price for a specific amount of time. The price could change over time and result in more expenses.
If you receive a lease agreement, read the fine print to truly understand the costs. Some leases won’t let you end the lease early. Increased prices may not equal out to the same costs as your current electric bill. While renewable energy has benefits, you may not benefit financially from leased solar panels. Full estimates can help break down the costs and determine your full payback period and home savings. For more information on solar panel purchases and ownership, contact us at Mauzy Heating, Air & Solar. We have a multi-step process for solar panel installations and will put care into each step.
