In some cases, leasing rather than buying is a smart financial move. However, when it comes to buying vs. leasing solar equipment, the decision about how you should finance your new reliable energy source depends on your financial goals.
Over one million households and businesses have installed solar panels in America, with thousands more joining every month. We explain some of the major differences between owning and leasing solar equipment.
You might not own the solar system outright if you don’t pay the full sum up front, or at least you won’t own it until you pay off any financing you sign up for initially.
What’s Right for You? Buying vs. Leasing Solar Equipment
It’s important to understand when leasing is the better option over buying the solar equipment outright, and vice-versa.
Consider Different Ways to Buy Solar Panels
Buying a solar system outright will certainly help maximize the financial benefits of transitioning to a renewable energy source, especially if you take advantage of the 30% federal tax credit the U.S. government allows. Some states also have a state tax credit that can be utilized in addition to the federal tax credit.
You can pay in full with cash for your solar electric system and utilize the federal tax credits to offset the costs. While there’s an upfront cost with that option, the savings are immediate.
Another option is obtaining a solar loan, which come both secured and unsecured, the latter meaning the interest isn’t tax deductible and the home isn’t used as collateral.
Leasing Solar Power Equipment
Most people, at this point, are buying solar power systems through loans. This is a proven way to decrease your electricity bills, help save the planet, and keep from paying more for energy in the future when rates spike.
A lease will also usually come with a full system warranty and performance guarantee, which ensures it will work for the full 20 or so years of the lease.
As far as the tax credit for solar power system purchasers goes, if your yearly tax bill is low already, you might be ineligible to claim the tax credit anyway.
If you choose to lease solar power equipment, try to find low interest rates and make sure there’s no penalty if you can pay it off sooner.
At the end of the day, whether you’re buying or leasing solar, you’re investing in reliable renewable energy, saving thousands on utility costs, while protecting the environment. If you have questions about which option is best for your business, call PPM at (866) 828-3337.