Plus how you can own your system for the same price as leasing one with Monalee.
Choosing to go solar is a long-term investment that ends up paying for itself in just a few years. Some of the benefits of solar-powered homes include significant savings on monthly utility bills, offsetting one’s carbon footprint and living more sustainably, increasing the value of the home an average of 4.1%, and relying less–or not at all–on the local grid.
Like any big investment, it’s a good idea to research the cost of going solar in your area and come up with a list of ‘non-negotiables’ such as Tier One solar panels or short buyback period–the number of years it takes for you to receive a return on your investment.
Getting clear on your goals is important because it helps narrow down when and with what company you sign up with. Using the example above, Tier One solar panels are made with higher quality materials and are more durable; they also cost more which might add a few years to your buyback period.
Leasing a Solar System
We’re guessing you’ve leased an apartment or a car at some point in your life, and leasing a solar system follows the same structure. Rather than owning the system yourself, a third party company owns your equipment and you pay a set monthly fee to lease it out.
For homeowners who are not ready to make the full investment in solar energy, leasing equipment can be a great option. It lowers the barrier to entry and makes it possible to live more sustainably at a manageable monthly cost.
Leases can span from as little as $50 to upwards of $250 per month; it depends on several factors such as the amount of energy your home needs to run, the company you are leasing from, your location, and your credit score. In most cases, you will be required to pay a downpayment although some companies waive this and allow a $0-down agreement.
Purchasing a Solar System
When you purchase solar equipment, you don’t have to worry about leasing terms and conditions. It’s definitely a bigger investment up front, but there are both federal and statewide incentives that help to lower that cost.
In Florida, for example, there’s a 6% home solar power system state sales tax exemption for residents who invest in solar for their homes. This is on top of the Federal Solar Investment Tax Credit in which qualified homeowners in Florida are eligible for a tax credit of up to 30% of the total cost of their system.
Owning your home’s solar system is particularly beneficial if you plan on selling your home in the future. It can be tough to find a buyer who is willing to take over the lease of a solar system. Most buyers prefer to buy a home with an existing solar system so that they can immediately start saving on their utility bills.
Key Differences
The main difference between a solar power lease vs. solar purchase is that with solar purchase, you own your system. Solar leases mean that a third party company technically owns your equipment and you are essentially renting it from them as you would a car or a home that you don’t own.
Purchasing a solar system requires more financial investment upfront while leasing a system allows you to pay an initial down payment (if applicable) and then a set monthly fee based on location, energy usage, and a few other factors.
In both cases, you will save monthly on your monthly electricity bills, however the amounts will differ. Homeowners who purchase their systems have specific tax incentives that help lower the upfront costs and therefore achieve ROI faster.
Finance Options
Going solar is a big investment, but there are many different ways to finance it. Solar financing allows homeowners to install solar energy systems without paying the entire upfront cost out of pocket.
Financing is a way to spread out the cost over time, making solar energy more affordable and accessible. It’s a great way to make the switch to renewable energy without a hefty initial investment.
There are a few ways you can finance solar for you home:
Solar financing with Monalee
Our rates at Monalee are so low that it is possible to own your energy system for less money than leasing it through one of our competitors.
We also work with two financiers–GoodLeap and Mosaic–who offer solar loans. The monthly fee you pay them is often lower than your current electricity bill. They allow $0 down and there are no prepayment penalties.
