Should You Buy or Lease?
Whether you decide to buy your solar panels outright or lease them you’ll still get the same, clean solar electricity powering your home. But the finances and ownership of your solar energy system will change depending on whether you decide to own them outright or not. If you lease the system or sign a power purchase agreement (PPA), a third party owns the solar panel system.
A solar installation can only be included in a property assessment if it is owned by the homeowner and is an asset that can be transferred without obligation. The system’s warranties and performance guarantees generally transfer with the sale.
To secure a higher sale price, it’s most advantageous to buy a solar energy system for your home. If you do choose to lease your solar panels, they may still add resale value. Show potential buyers the amount of money they can save by using solar, and you can possibly negotiate to add the leased solar panels to the cost of your home.
Purchasing a solar panel system with cash, or financing a purchase with a solar loan, is your best option when you…
- Want to maximize the financial benefits of installing a solar panel system, rather than solely benefitting from the system’s environmental benefits
- Are eligible to reduce your federal and state tax liability through the federal investment tax credit
- Are a business, and can realize tax benefits by treating the solar panel system as a depreciable asset
- Want to increase the market value of your home by installing a solar panel system
A solar lease/PPA is your best option when you…
- Are primarily interested in using electricity generated from renewable resources, rather than maximizing the financial benefits of installing a solar panel system
- Want to avoid the responsibility of maintenance or repairs for a solar panel system
- Are ineligible for federal or state investment tax credits resulting from your investment in a solar panel system
- Do not want to wait until the following year to receive the financial benefits of tax credits