A 2014 report from the Solar Energy Industries Association showed that to date, over 600,000 American homes have acquired solar panels. While the market for solar is growing, and the benefits are clear, buying vs. leasing of solar panels remains one of the most difficult decisions facing homeowners.
Both buying and leasing present a unique set of advantages, but the answer depends on the homeowner’s specific situation. Beyond reducing your electricity bills, here are some factors – both qualitative and quantitative – to consider in favor of buying solar panels.
A house with solar panels is considered more valuable Solar panels tend to increase the value of a house because it makes it more energy efficient. When you buy your solar systems, you don’t have to worry about the transfer issue in the event that you sell the house and it also seems more attractive to buyers.
Removing solar panels can damage roofs
Suppose you lease your solar panels for 20 years, have them installed and then decide to move. Your lease doesn’t automatically transfer to your new house (if it can even accommodate the old system). Some companies offer to relocate it and this could cost at least $1,000 for an audit and transfer of the panels. Your lessor will then have to remove the panels, which would leave holes on the roof that were there to bolt the panel frames. These could in turn cause leaks that the lessor isn’t obligated to repair. This would also drive away potential buyers who would have to face the consequences of it.
Solar power systems are self-maintained
Once you purchase the solar system, you are responsible for its maintenance. Fortunately, most solar panel systems require little to no maintenance and typically come with a protection plan. Therefore, it’s not something for you to worry about. The cost of energy is protected from inflation Once you pay your solar systems in full, you will still be able to take advantage of the sun, which will maintain the cost of your energy. You will not have to worry so much about the going rate of electricity (and you’ll pay less for it) because your solar panels will continue to produce energy as long as long as they’re facing the sun.
The return on investment is larger when you buy
A house typically needs a solar system in the range of 5kW and 7kW. Depending on the quality and efficiency of the system, the price could be in the range of 20 to 30K. With the combined benefits of a 30% tax credit, more than 70% savings on electricity, feed-in tariff (FIT) value and solar renewable energy credit (SREC), you can get an 11% return on investment within 5 to 7 years. You lose these benefits with leasing where the return on investment is generally less than 6%.
To calculate the exact ROI you can expect on your solar system with buying and leasing, click here for our Leasing vs Buying Calculator for New Jersey homeowners.