With legislators revamping the way solar incentives work in Connecticut, you may be wondering how to maximize the value of your solar investment. From federal solar rebates to solar tax incentives, you’ve probably already heard a lot about how to stretch your clean energy budget. In this post, we’re going to cover a topic that isn’t talked about as frequently: how to decide whether to lease or purchase your solar panels outright.
When to Purchase Your System
You should lean toward purchasing your solar energy system if:
- You want to maximize the long-term financial benefits of installing a solar panel system at the expense of a higher up-front cost.
- You are eligible to reduce your federal or state tax liability through the federal investment tax credit.
- Your business can experience tax benefits by treating your solar panels like a depreciable asset.
- You want to increase the fair market value of your facility with a solar system installation.
When to Lease Your System
Your business may be better off leasing your solar energy system if:
- You are more interested in benefiting from renewable energy resources than from the financial incentives.
- You want to take a hands-off approach to maintenance, repairs, and upgrades to your system.
- You aren’t eligible for any federal or state solar tax incentives or solar rebates.
- You don’t want to wait until the following year to receive the financial benefits of solar tax credits.
Purchasing Vs. Leasing
Before deciding whether purchasing or leasing would better align with your long-term energy goals, consider these crucial factors:
With a solar loan or cash purchase of your system, expect to pay anywhere from tens of thousands to hundreds of thousands of dollars on your solar energy installation. However, you may be able to reduce that cost by up to 50 percent, depending on the rebates and incentives available in your area.
With a solar lease, you can frequently get access to a solar energy system at little to no money down. At the same time, however, you won’t qualify for any rebates or incentives because you don’t own the system.
With an outright purchase, your organization is solely responsible for any repairs, maintenance, and upgrades that aren’t covered under warranty. Fortunately, reputable solar manufacturers build equipment that’s designed to last for decades and back their products with equitable warranties.
When you lease, your solar partner is responsible for maintaining and repairing your solar infrastructure. They also frequently offer applications that track system performance and cost savings.
Return on Investment
When you purchase your solar infrastructure, you can expect to save anywhere from 40% to 70% on electricity costs over the lifetime of your system. You’ll receive free electricity for the life of the system (generally 25 to 30 years).
When you lease a solar energy system, you can save 10% to 30% on electricity bills.
Still Trying to Decide?
If you’re still trying to weigh the pros and cons of purchasing versus leasing your solar energy system, the experts at Verogy are here to help. Get in touch with our experts today to explore your options and forge a path toward a brighter future.