If you are planning to install a home solar panel system on your roof, there are three options you can choose from solar leasing, buying your panels, or signing a Power Purchase Agreement (PPA). Each method has its benefits and drawbacks, and you need to understand the differences between solar leasing and buying solar panels to determine which one suits your home and budget.
Solar leasing is a financial arrangement in which the company that installs your solar panel system retains ownership, and you pay a fixed monthly amount to use the system and receive any electricity it produces. On the other hand, a Solar Power Purchase Agreement (PPA) is a financial arrangement where you pay your solar company a fixed price per kilowatt-hour (kWh) for the power generated by the solar panels on your roof.
The primary difference between a solar lease and a solar PPA is how you pay the solar company for the power generated. With a solar lease, you pay a fixed monthly “rent” to the company for the duration of the lease, regardless of how much electricity you use. In contrast, with a solar PPA, you pay a fixed rate for the amount of electricity you use, which can vary from month to month.
When deciding whether to purchase or lease solar panels, you should consider your current financial situation and long-term housing plans. Solar leasing is ideal for homeowners who can budget for a flat monthly fee but do not have the money to buy the system outright. Buying a solar energy system outright or through a solar loan may be more suitable for homeowners looking to enhance the long-term value of their homes for a future sale.
There are many reasons to choose ownership of solar panels, such as higher long-term savings, easier home resale, and tax credits and incentives. Buying solar panels outright ensures significant long-term savings, as the solar panel system typically generates electricity for 25+ years and helps reduce energy bills. Additionally, owning a solar panel system outright makes it easier to sell your home, often for more money than if you did not have solar panels. Moreover, you can take advantage of federal and state tax credits and local incentives such as net metering programs that can help reduce the cost of solar panel installation.
