Should You Buy or Lease Your Solar System

Should you buy or lease your solar system?

There are two ways to get solar: buy it yourself or rent it from a solar company. The biggest thing to consider when deciding between buying and leasing is who receives the federal solar income tax credit. Since the tax credit can be worth thousands of dollars, you should carefully consider this.

LEASING PANELS

PROS:

• Zero out-of-pocket cost because you are not purchasing the equipment. You are agreeing to buy the power the system produces on a monthly basis for 15, 20 or 25 years.
• May offer a lower starting price per kWh than what the utility charges, but not always.
• Warranty & Maintenance is usually included at zero cost because you do not own the system; they do.
• Transferable at-home sale

CONS:

• The Solar company gets the federal income tax credit, not you!

• No control over panel or inverter type
• Because you do not own the system, you do not own the kilowatt hours it creates. Instead, you are agreeing to buy all the electricity the system produces for the entire term of the Agreement at whatever cost per kilowatt hour the Agreement specifies – regardless of how that compares to the utility’s cost per kilowatt hour. You could pay MORE for power from solar than the power company charges if the cost per kilowatt hour is higher than what the utility charges. Savings over the utility are never guaranteed with a leased system.

• These types of Agreement almost always have an annual increase (usually 1-3%) in your contract. It is possible for the annual escalator to push the cost you pay for solar higher than the cost per kilowatt hour from your utility at some point in the 15, 20 or 25 years of the Agreement.

• No added resale value.

• These Agreements are almost impossible to break without substantial monetary penalties being assessed. Despite what the sales rep may say, no third party owned system “will be removed for free if you don’t want it anymore.”

• Can slow down or stop a home sale as some people do not want to assume a lease or because it negatively impacts their debt-to-income ratio so that they no longer qualify for the mortgage.

• The system cannot be moved out of the NV Energy service territory.

BUYING PANELS

PROS:

• You get the federal income tax credit.
• You are buying equipment, not kilowatt hours so the cost never changes.
• Full Warranty from the manufacturer and the installer
• Increased resale value
• No Agreement or monthly payments for a new owner to assume or worry about.
• Full control over panel and inverter type
• The system can be moved anywhere you move
• No early termination fees
• Guaranteed return on investment as high as 8-10%
• Cash price is the cheapest, with many affordable zero or low-money-down financing options available

CONS:

• You must pay cash or finance the purchase
• A down payment may be required

CONCLUSION

Unless you cannot use the tax credit because you are no longer working and do not pay federal income taxes, you should buy your system instead of leasing it. We offer low-rate financing options for customers with good credit and competitive prices in the Las Vegas market.