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So Many Ways to Go Green: Solar System Purchase vs. Lease

Hello solar droppers! It’s time to wrap up this comparative series where we’ve been clarifying the defining features of the most prevalent ways of going solar.  We’ve talked about how Solar Power Purchase Agreements work, how SPPAs differ from system purchases, as well as how SPPAs differ from solar lease agreements.  This article will focus on purchasing your own system in comparison to leasing a system from a third party.  We’re going to keep it relatively short since both of these options have been separately described in detail in those aforementioned articles.  This article is purely for comparative purposes for those of you that are weighing your options between purchasing and leasing solar panels. Let’s start with leasing panels.  Here’s how it works: solar leases are typically contracted for 15 years or more and require little or no upfront cost associated with upgrading to solar electricity.  The price of installation is partially or entirely offset by state rebates (where available), but the leasing company that owns the panels receives the Federal Tax Incentive (which pays back 30% of the cost of the system) as well as any Renewable Energy Credits (RECs) that are associated with the system’s production.  Homeowners just make monthly payments (which can escalate annually) for the hardware, not for the electricity itself.  Solar leases aren’t standardized from company to company, so it’s important to know if the lease includes a system buy-out or prepay option, as well as maintenance, monitoring and insurance which may or may not be included in the terms of service. Before we get into the comparison between these two options, let’s review of the basics of buying your own solar system .  You’ve determined how much electricity you use annually and sized a system accordingly based off your usage and how much of your roof space is viable for photovoltaic production.  After you’ve determined all of the hardware that you need for installation, it’s time to pay for your system!  If you don’t have the capital to pay for everything up front, there are many financing options (which will be the topic of future articles) for your consideration.  After the proper permits are pulled, the system is installed.  Self-installation can save some money if you know what you’re doing, but most homeowners will have the job done by a professional installer, which will add to the upfront cost.  However, some states offer rebates that offset all or part of the cost of installation.  After installation your utility bill should be greatly reduced or eliminated (if there was enough viable roof space to replace all of your usage with solar energy), and all...

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