Purchasing a solar array for your home or business is no small investment. If you are not in a position to make a cash purchase, there are a couple options – leasing your system or getting a loan. However, solar lease programs are not in your best financial interest and here’s why.
Leasing vs. Owning
Leasing a solar array is like renting a home.
When you lease your solar array, you pay a monthly fee for the privilege of using another company’s equipment. The amount of money you save from leasing is a fraction of what you save when you own your solar array.
Cash is the best option for return on your investment.
When you purchase with cash payback on a solar array can be achieved in as little as 7 or 8 years. Solar panels come with a 25 year warranty. So, you’ll produce free electricity for yourself for at least another 17-18 years after your system has already paid for itself.
A loan is a much better option than a lease for your investment, by thousands of dollars.
First, taking out a loan for your solar allows you to take advantage of the tax credits yourself. Also, the financing fees of a loan may add a few years to the payback period, but you’ll still get around 15 years of free solar production – and thousands of dollars of savings.
With a solar lease, you never reach the payback period – in fact, the monthly fee you pay for your solar production can increase from year to year!
Want to fully understand how Solar Payback works?
Download a detailed example to see how what seems like a large investment at first, can lead to 17-18 years of saving thousands of dollars on your electric bill.
Solar array is nearly maintenance-free for 25 years.
Solar leasing companies tell you they will cover any maintenance for the life of your system. The truth is solar panels come with a 25 year warranty, and the inverter comes with at least a 10 year warranty. So you get a maintenance-free system for many years when you own your system as well, and the additional savings.
If you own your solar array, your home resale value will increase, however if you lease, you’ll have to pass that lease on to the buyer.
Data from California shows that having a solar array installed on your house increases the resale price. If you own the system yourself, you get to charge more for your solar home and the new owners will be promised a small electricity bill.
If your system is leased, it belongs to the leasing company. The new home owner will have to be qualified to enter into the remaining term of the lease. Also, the buyer may not be interested in paying the premium for the array. With a lease, the buyer would pay a full electricity bill – just to the leasing company rather than to the utility.
For all of these reasons, Prometheus Solar does not offer a lease.
If a cash purchase is not an option for you, then we highly recommend a loan for the best financial return. Your best bet is to find a low-interest home improvement loan through your credit union or bank. Here are a couple options we recommend as well: Admiral’s Bank or REEL Financing.
If you are still considering a lease, we recommend you read more about it in Home Power magazine’s article on Leasing vs. Owning a PV System.