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The Great Solar Debate: Solar Financing vs. Solar Leasing (Including Storage!)

Over the last decade, we’ve seen a significant shift towards renewable energy, particularly solar power. The popularity of solar power systems has skyrocketed, driven by the dual allure of reducing carbon footprints and cutting utility bills. However, the question of “how” to go solar often leaves potential solar customers in a conundrum: Should they finance their solar system or lease it? What about incorporating storage into the equation?

In this article, we’ll break down the benefits and potential drawbacks of both solar financing and solar leasing, including the role of storage. Our aim is to give you an in-depth perspective to help you make an informed decision.

Solar Financing: Ownership and Its Advantages

Solar financing usually entails securing a solar loan to cover the cost of your solar panel system, thus allowing you to own the system outright. This method has several compelling advantages.

Financial Returns

The most significant benefit is the potential for long-term financial returns. Though you have an upfront cost, owning a solar system means you directly benefit from all the generated electricity, potentially offsetting 100% of your utility bill. Over time, these savings can exceed the initial cost of your system.

Incentives and Tax Credits

Another considerable advantage of solar financing is eligibility for state, local, and federal incentives. The most notable of these is the federal solar tax credit, which can offset a substantial portion of your system’s cost.

Increased Property Value

Owning a solar system can increase the value of your property. As ‘green’ homes become more sought after, your solar investment could yield a significant return if you decide to sell.

Solar Financing: The Storage Catch

When it comes to including storage in your financed solar system, there’s a crucial caveat: most storage solutions only carry a warranty of ownership for 10 years. This period is significantly shorter than the 25-year lifespan of solar panels, meaning that you may need to replace the storage component at least once during the life of your solar system. This additional cost needs to be factored into your decision.

Solar Leasing: Simplicity and Predictability

Solar leasing offers a more straightforward route to go solar. Under a solar lease agreement, a third-party company installs, maintains, and owns the solar system on your property. You pay a fixed monthly fee to ‘rent’ the system and use the electricity it generates.

Predictable Costs

One of the main draws of solar leasing is predictable costs. You pay a set monthly lease payment, which often includes any necessary maintenance and repair costs.

No Upfront Cost

With solar leasing, you can dodge the substantial initial investment that comes with buying a solar system outright.

Storage Advantage

One significant advantage of leasing when considering storage is that the 25-year lease agreement often includes storage. The lessor will typically maintain and replace the storage system if necessary during the lease term, bypassing the 10-year warranty issue that financed solar systems face.

Solar Leasing: The Potential Downsides

However, solar leasing does have some potential drawbacks. The financial returns are typically lower than with solar financing because you’re paying a fixed fee rather than saving directly on your utility bill. Additionally, homeowners with leased solar systems might not be eligible for the same tax credits and incentives as those who own their systems.

Conclusion: Financing vs. Leasing – Your Solar Decision

The decision between solar financing and solar leasing depends heavily on your financial situation, energy needs, and long-term plans. If you’re looking for a long-term investment and the most substantial financial return, financing might be your best bet. On the other hand, if you want predictable costs, simplicity, and an easy solution for storage, leasing could be your go-to option.

Remember, going solar is an excellent move, regardless of the route you choose. Both financing and leasing enable you to join the renewable energy revolution, cutting carbon emissions and reducing reliance on fossil fuels.

If you’re contemplating going solar, we recommend consulting with a solar professional to discuss your specific circumstances and needs. They can provide personalized advice, making your transition to solar energy smooth and successful.