When Should You Go Solar with a Solar Lease?
Today there are several financing options for a homeowner going solar. That said, with choice comes questions and it is important to know that there is no right or wrong way to go solar. What is important is to select the option best suited to your personal situation and savings potential. This is what the Solar Specialists at EcoMen Solar will help you with.
You can best sum up the difference between a Solar Lease/PPA and a Solar Loan as the difference between Cost Reduction and Investment Savings. A Solar Lease/PPA lowers your monthly expenses but a Solar Loan invests in your most expensive asset (your home) and provides multiples in terms of personal savings and value.
Let’s dive deeper into your choices…
Going solar with a Lease or PPA is best suited for those who:
- Pay little to no Federal Income Taxes
- Don’t plan to stay in your home more than 5 years
In these situations you would not realize the full potential of a Solar Loan or Cash Purchase. Many of the incentives only available to a Solar Loan/Cash option do not apply to a Solar Lease/PPA. As such, your best benefit in going solar is to receive a lower electric utility rate and save money directly on your electric costs.
Here at EcoMen we feel it is necessary to be clear about choice. Choice that you, the consumer, has in going solar. Many solar companies only offer Solar Leases/PPAs because there are less moving parts and they are easier to explain. With ease, comes reduced benefit to the homeowner. While there is nothing particularly wrong with a Solar Lease if it is best suited for you, it is important to know a Solar Loan is just as easy and has many of the same benefits plus others. Do not be deterred from a Solar Loan just because of the word Loan.
A Solar Loan contains many of the same benefits as a Solar Lease/PPA:
- Receive Savings
- System Monitoring
- Quality Design and Installation
- Industry Standard Module and Inverter Warranties
- Protection Against Utility Rate Increases
- No Change to How You Use Your Home
- Environmental Benefits
In addition, you also receive all applicable incentives:
- Federal Tax Credits
- State Tax Credits
- Property Tax Abatements
- Solar Renewable Energy Certificates (SRECs)
These additional incentives not only allow you to earn more savings but they also provide more simplicity for the home as the solar is now just another home improvement like a pool or fence. When you sell your home in the future there will be less questions about who the leasing provider is and what the conditions are. Instead the solar will be treated as part of the home.
We have seen a strong popularity in Solar Leases/PPAs in the 2011-2016 time frame but have recently experienced an uptick in not only the signing of Solar Loans but the customer acceptance of Solar Loans. This has also been documented by Greentech Media in their very relevant article entitled: “Solar Loans to Become No. 1 Consumer Finance Solution for Residential Solar in 2018. According to new data from GTM Research, direct ownership continues to outpace solar leases.”
For an honest evaluation of your solar options and straightforward talk, give us a call at 732-SOLAR-NJ. We promise to not waste your time and to give you the straight facts about your solar savings.
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Whether leasing or buying solar panels is better depends on your financial situation and your goals. Buying will save you the most money. But leasing can be an easy way to get started with solar.
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