If you would like more control over your energy costs, want to add value to your home and get a solid return on your investment, then you owe it to yourself to look into a home solar power system. One of the many steps in moving towards a solar system for your home is deciding if you should purchase or lease the system. Here is what you need to consider when deciding to purchase or lease a solar power system.
Option 1: Purchasing the System
1. You need a good sunny spot on your roof(s) that stays shade free from 9AM – 3PMon most days but for sure May through October.
2. The amount of (square feet) roof sunny space needs to fit enough panels to reduce your utility consumption by at least 50%. This is something that needs to be calculated in a study on your home. Good vendors will predict conservative annual system generation and not over promise.
3. You are paying in cash, financing via the PACE program or a low-interest loan and the Federal 30% Tax Credit is still in place (reducing in steps to 2023).
4. If your roof covering is good to go for the next 20 years, then all these factors will bring the shortest payoff, the best return on your investment (ROI), and free solar electricity after 5-8 years if you live in competitive market areas. That equals 12-15 years of free solar electricity!
Similar results can be reached with a ground mounted or carport system that also checks off the above four factors.
(You will still be charged by the utility company for electric delivery fees, taxes, access to the grid, and any power you still draw from them.)
Option 2: Leasing a Solar System
1. Being shade free from 9am-3pm and a viable roof will still be desired by your vendor with some wiggle room depending on the vendor.
2. You won’t own the system so no Federal Tax Credit. The vendor should present the percentage of bill reduction they are offering you via a maximum and a minimum design accompanied by a 20-year lease payment schedule for each. From there, you can decide which design best fits your budget.
3. The primary result of leasing is an immediate reduction in what you pay your utility company with zero cash outlay. Watch for payment escalators built into your lease schedule before you commit. A good lease ensures that you pay less for your solar lease and your utility charges combined than what you would be paying without the solar system, in every year of the lease. The vendor must also have stated production and workmanship guarantees and warranties.
When a solar system is properly sized based on your energy profile, site conditions and financial goals, you will save money. How soon varies from project to project due to the factors outlined above.