Going Solar: Lease or Buy?
With the price of oil continuing to skyrocket, just about everyone agrees that going solar is a good move. But how do you decide whether to lease a system, or buy it outright?
What is solar leasing?
With a solar lease, you do not own the solar system on your home — the leasing company does. You buy electricity from the leasing company, usually at a rate slightly below what you pay your utility each month. While terms vary, leases typically allow you to go solar with little to no money down and are based on 15-to 20-year contracts with the option to buy the system at the end of the lease.
To be sure, leasing saves you the big upfront costs of buying.
However, it’s generally accepted that if you have the means — either cash or via some form of financing — it makes more sense to buy your system. Here’s the scoop from Alternate Energy owner Bruce Ekimura:
“We are in the business of selling and installing solar systems, and have been since our founding in 1993. We are a local, family-owned and operated company.
“Right now in Hawaii, if you are able to purchase a system, we firmly believe that buying is the way to go.”
Advantages of buying
1. When you purchase a solar system, it increases your home’s value as soon as you install it. If you lease a system, you’ve created a debt liability that a potential home buyer might not want to assume.
2. A solar system will not only pay for itself in as little as 5 to 6 years, but can continue to make you money over its 30 to 40 year expected lifetime. This is one of the primary reasons solar lease companies want you to let them use your roof.
3. Substantial cash credits are available from our state and federal governments. With a solar lease, you don’t get the credit because you don’t own the system — the leasing company does. If Hawaii tax credits disappear (hopefully, that’s a long way off), then it might make more sense to lease.
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