Installing solar panels has become popular and might be right for you. Whether you are looking to lower your utility bill, reduce your carbon footprint, take advantage of rebates and incentives, or make a sound investment. The big question that everyone asks themselves when they are thinking about installing solar panels is, “How can I pay for this?” In earlier years, the only option was to purchase a solar photovoltaic (PV) system outright with money from savings or a home equity loan. However, additional options are available that can make adding a solar PV system affordable for almost everyone. Programs like the Sonoma County Energy Independence Program (SCEIP) work with residents of Sonoma County to offer Property Assessed Clean Energy (PACE) financing for a variety of water conservation, energy efficiency or generation upgrades with no upfront costs. Another option that is gaining in popularity is leasing a solar PV system; some solar companies offer this as a financing option. This leads to the question “Should I lease or buy solar panels”?
If you find yourself asking this very question, here are some things to consider.
• Are you concerned about being responsible for any maintenance or repairs?
• Do you want to receive any rebates or incentives yourself?
• Do you have the ability to pay for a system outright, either through savings or financing?
• Do you plan on staying in your home or moving in the next few years?
How you answer these questions can determine what option might be best for you.
Solar panels are mostly maintenance free other than keeping them clean, but should something happen to them a leased solar PV system would be the responsibility of the leasing company. With a purchased solar PV system the responsibility is with the owner. However, most solar panels carry a 25 year performance warranty and most solar inverters carry a 10-25 year performance warranty.
When it comes to incentives and/or rebates, the option you have chosen will determine who receives the credits. If you have leased your solar PV system, the incentives/rebates will go directly to the leasing company. However, if you have purchased your system either outright or with financing the incentives/rebates come to you.
Can you pay for a solar PV system outright? As the costs of purchasing and installing these systems drop in cost, purchasing them outright is becoming easier and easier. However, not everyone wants to pull money from their savings account to do this. That’s where financing comes in. Programs like SCEIP offer residents an option to purchase solar PV systems with no upfront costs and a quick turnaround time. Other options include going to your bank or credit union and obtaining a home equity loan or line of credit.
How long will you stay in your home? Either way you choose to pay for your Solar PV system, it will increase the value of your home. With leasing you are essentially paying to use the equipment, and if you sell your home the next owners will have to agree to pay for this equipment too. If you have purchased your system outright, the increased value of your home goes straight to you.
When it comes down to it, there are pros and cons to either way you choose to pay for your solar PV system. In the end, if you’ve decided to go solar then you will be lowering your utility bills, contributing to a greener environment, and reducing your carbon footprint.