Leasing vs. Purchasing a Solar Energy System: What's Best for You?

[Originally published on November 8, 2021, | Updated on January 24, 2024 - 5 min read]

Leasing vs. Purchasing a Solar Energy System: What's Best for You?

Solar Install on Tile Roof: When considering solar for your home, deciding between leasing and purchasing is crucial. Each option has pros and cons, which we'll explore to help you make an informed choice.

Leasing a Solar Energy System

Pros:

• Minimal upfront cost: Most leases are $0-down agreements.
• Immediate savings: Leasing can lower monthly costs without waiting for payback periods.

Cons:

• No incentives: Leases prevent you from claiming tax benefits like the 26% federal solar incentive tax credit.
• Challenges in home sales: Transferring a lease to a new homeowner can be complicated.
• No system alterations: Adding or modifying the leased system is generally not allowed.

Purchasing a Solar Energy System

Pros:

• Tax incentives: Owning a system lets you take full advantage of tax incentives, significantly reducing overall costs.
• Increased home value: Owned systems add value to your property.
• Flexibility: You have the freedom to upgrade or expand your system.

Cons:

• Higher upfront costs: Purchases typically require a down payment or a loan commitment.

Financial Implications

Leasing offers immediate savings but limits long-term financial benefits. While initially more expensive, purchasing provides significant savings over time due to the absence of lease payments and the advantage of solar incentives.

Choosing the right option depends on your financial situation and long-term goals. If you're considering solar, working with a reputable installer who can guide you through these choices is essential.

For more information on solar financing options and to make the best decision for your home, visit EcoWatch's comprehensive guide on solar leasing vs. buying.