Own vs Lease
There are two main ways to have a solar system installed in your home or business: Solar leasing and owning your solar system. Both ways help you save on your electric bill, but how much you save and who receives most of the savings are very different.
Solar leasing is the most common, but the least beneficial to you. Solar leasing is an agreement called a Power Purchase Agreement (PPA). In this case, the installer usually owns the solar panels. Because the solar panels are not yours, you forfeit the 26% federal solar tax incentive, the $1,000 Maryland energy grant, and future payments for Solar Renewable Energy Credits (SRECs).
Solar lease payments keep coming to you for the full duration of the provider’s involvement even well after the solar system pays for itself. Think of it as renting a house instead of buying.
Since the solar panels are leased, if you sell your home or business, the new owner will need to qualify for the lease and accept the terms as part of the lease transfer. At the end of the lease, you still do not own your solar panels.
If over the 25-year life of your solar panels, your needs change or you want to modify your solar system in any way, you can’t. It’s not yours.
Despite all the financial disadvantages, this is a popular option for people who have poor credit or do not have access to capital because it typically requires no upfront investment.
Owning Your Solar System
There is a reason leasing companies want to lease solar: Solar energy makes financial sense and the owner gets the most benefit. When you own your solar panels, you own the benefits. You own the 26% federal solar tax credit. You own the $1,000 Maryland renewable energy grant. You own any over-production from your solar system. You own the Solar Renewable Energy Credits (SRECs).
If you move, because the solar panels are part of the property and owned by you, the solar panels add value to your property and are a unique selling point to potential buyers. Imagine posting a picture of your electric bill to go along with other real estate pictures!
While cash is great, financing will be the best available option for most solar panel customers. The best financing option is typically a home equity line of credit or business line of credit. We also can refer you to a financing option tailored for solar installations.
Another very important advantage of owning vs. leasing is that when you own via financing, it’s a fixed-rate contract and monthly payment. Loans are for 12 or 20 years with fixed monthly payments which are the same as locking in your utility expenses regardless of market fluctuations and energy increases. Knowing that your utility expense is not going to go up, for say 15 years, is a nice feeling.