IoT Energy Management for the Future The use of solar power on a large-scale basis…
Should You Purchase or Lease Your Solar System
After deciding to install solar panels in your business or home, you need to decide if you are going to purchase or lease your solar system. The decision of solar financing is dependent upon what your goals are financially. Everyone has different needs and here are some ideas to help you decide how to lease or finance your solar panels.
Price of a Solar Energy System
The cost of solar depends on your federal and state tax incentives. Right now the Solar Incentive Tax Credit (ITC) is in effect until the end of 2021. This program gives a 30% tax credit to homes and businesses that install solar energy. Your state may also offer attractive incentives to offset the cost of installing solar in your home or business. Generally, the rebates and tax credits can offset the cost by up to 50% and they reduce the amount you pay for federal and state taxes. You can either reduce your withholding or claim the credit when you file your next return.
If you choose to lease your solar system, you do not qualify for any tax credits, incentives, rebates, or depreciation. However, you most likely won’t have any upfront costs only a monthly payment to the solar company. Sometimes, a solar lease may make it more difficult to sell your home if the new buyer does not want to assume the lease.
Purchasing your solar system allows you to buy it with cash or finance with a solar loan. There are programs, like PACE, offered through an individual state, that finance your project and allow you to pay it off in your property taxes. Also, a business can realize tax benefits by treating the solar system as a depreciable asset. If you are a homeowner or landlord interested in installing solar you can increase the property’s value quickly if you plan to sell in a few years. It is a good idea to purchase a solar system if a homeowner or business wants to maximize their financial benefits of solar.
Solar System Maintenance
If you are leasing your solar system, the solar leasing company maintains and owns the system. If you own your solar system, then you are responsible for the maintenance. However, the solar panels and inverters are very reliable and durable, and do not require much maintenance. Also, most solar panels have a 25 year warranty, and the solar inverters have an average of 15 year warranty.
Return on Investment and Savings from Solar Energy
With a leased solar system you will save between 10-50% on your electricity bill depending on your location, property, and state incentives. With a solar system purchased or financed, you can earn an annual ROI on your investment of 10-30%. Your electricity will basically be free for 25-40 years. No matter which option you choose, solar energy is a great idea whether purchase or lease your solar system.