When it comes to San Diego solar installation, you may be exploring the option of leasing solar panels versus purchasing them for your home. While leasing solar panels may have some benefits in certain circumstances, for most homeowners, purchasing solar panels is typically a better fit and less of a hassle in the long run.
Advantages and Disadvantages of Leasing a Solar Panel System
Cost for Leasing Solar Power
For San Diego homeowners considering leasing a solar panel system, the most common reason is typically the issue of up-front costs. Deterred by the purchase and installation costs of a conventional solar power system, some choose to explore leasing solar panels in the hopes of decreasing their out-of-pocket expenses. The commitment factor and initial costs can indeed be intimidating, but due to the variety of San Diego solar financing options, many people can actually get their new solar power system up and running with a flexible payment plan and minimal out-of-pocket expenses to start.
With most solar power leasing situations, the solar leasing company owns the panels and the homeowner pays a monthly payment for the duration of the lease. In other words, for homeowners who plan on living in their homes long term, you will always have to pay a monthly bill for your leased solar power system. Simply put, leasing a solar power system for long-term homeowners just isn’t practical. When you purchase and finance solar panels, you will likely be able to break even in less than 10 years.
Why continue paying your solar leasing company, when you can eliminate your monthly obligation within as little as 10 years? Think about it in terms of leasing a car: most car owners purchase and finance their car with the hopes of eventually owning it and no longer having a car payment. Would you want to lease a car forever? Probably not.
Solar Tax Incentives
If you choose to lease a solar power system, you are missing out on numerous tax incentives that are only available to those who purchase their systems. Until 2016, the U.S. federal government is offering a tax credit equal to 30% of the total cost of your solar energy system. In addition, the state of California also offers incentives, and San Diego’s solar rebate program was also extended to include and an additional $5 million for residential solar power systems.
But, if you choose to lease your solar power system, you have to forfeit all of these rebates and incentives.
Issues Selling Your Home
If you decide to sell home during the duration of your lease, you will likely run into issues with potential buyers. Most home buyers are not too keen on the idea of assuming a solar lease along with the purchase of their new home. In most cases, the buyer will need to qualify for the existing lease, if he or she is even willing to take it over. If the buyer is not interested in taking over the lease, you still remain responsible for the remaining payments, and typically cannot break the lease without paying a hefty penalty.
Whether you choose to lease or purchase when installing solar panels in San Diego, it’s important to work with a qualified, licensed solar installation company. Contact us today to get started on your new solar power system.