Is It Better To Buy or Lease Solar Panels ?
In 2014, 186,00 American homes went solar – over 50 percent more than just the year before – and 2015 looks like it will push those numbers even higher. The reliable solar panel has gotten cheaper, and that’s certainly a primary reason for the steady uptick in installations. Incentives on the national, state and local levels have driven the trend, too. But the kicker is that new financing options are making it easier and easier for homeowners to go solar.
If you’re reading this, you’ve probably heard the refrain before: with a solar panel lease, there is little to no upfront cost to going solar. There is also the option of buying your solar panels, and new financing possibilities allow for ownership with no upfront cost. This begs the proverbial question; Is It Better To Lease or To Buy Solar Panels?
Let’s start with buying. The total cost of a solar panel array can vary from home to home, but all installations will benefit from a federal tax credit that immediately knocks 30 percent off the price. That credit is set to last through the end of 2016 (after that, the credit drops to ten percent), and it’s only available to buyers. In New York, there’s also the state’s Solar Energy Equipment Tax Credit, which is worth up to $5,000 off of your state income taxes. Then, the Megawatt Block Incentive Structure acts as a per-watt discount off the top of your system and helps lower your monthly payments. If you’re in New York City, you’ll also get the NYC property tax abatement once you install, further defraying the cost. There may be other incentives, too, depending on your town of residence.
Once a system is up and running, as a buyer you’d look forward to the definite savings on your energy bill, but there’s more. A Renewable Energy Certificate, or a REC, will allow you to sell solar energy – your panel’s wares – to power companies. Eventually, that could amount to virtually free electricity for a household.
Now, onto leasing. Here’s what’s great about living in New York, besides the bagels and Broadway. If you want to lease your system, the state tax credits that apply to buyers will stick. Here’s how it works: The company installs panels on your roof for no money down and provides all of the solar energy generated from those panels to you, the consumer, for the next 15 or 20 years. You find a company who leases the panels, manages and maintains them, and they charge you a monthly fee that’s lower than your current electric bill. That’s it. No upfront costs. There’s no question that you’ll save money, and the entire process is as simple as turning a key. You may even have the option to buy your panels later, and often at a discounted rate.
The difference between buying and leasing really comes down to this: over time, solar panel owners tend to see slightly better long-term savings, especially when financing a purchase with a solar loan, while lessees tend to see slightly better initial monthly electrical savings.
Either way, you can’t go wrong – buyers and lessees both save significantly on their bills. And especially here, in New York, where the return on your investment in a fully-financed solar system exceeds anywhere else in the country. That’s right, anywhere else.
If all this doesn’t make it easier to choose (and we hope it already has), Green Street Solar Power has specialists ready to answer any questions. The most effective way to figure out which option is best for you? Just ask us.
Curious to know how much you can save when going solar, check out our blog Can solar panels save you money?