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Regardless of which option you choose, both lease and purchase of a solar system will still provide the same clean and cost-saving renewable energy for your home or business. However, there are differences between the two that are important to understand, and we are here to help guide towards the best fit solution for you.
Leasing solar is a cost-effective means to converting your traditional power supply to clean renewable energy. What is being leased is not the equipment; instead, it is leasing the power that the system produces for a fixed price each month. Like your local utility company, the monthly fixed price will escalate by a percentage each year, but the increase is typically nominal compared to the national average increase of 2.8% (Statistia, 2020), and the monthly price is typically 30% (or more) less than the average price of conventional energy.
The main benefit of going with a lease option is there are no upfront costs to the customer because it's the solar provider who owns the system, thereby bearing all the financial responsibility of having the system installed, maintained, insured, and monitored throughout the life of the lease term. Additionally, the solar company takes care of all costs on the back-end that includes permitting and net-metering, which makes the conversion seamless and highly affordable.
Once the lease is over (typically 20-years) leasees have the choice to extend the lease term or simply end the agreement and have the system returned at no cost.
Here is a recap of the benefits of LEASING a solar system:
No up-front or out-of-pocket costs
Monthly fixed rate with a competitively low annual increase
Fully insured, maintained, and monitored at no added costs
At end of the lease term, extension options or no-hassle termination at no additional costs
Make an appointment with us today and have us guide you to leasing your solar system with the nation's #1 solar lease program with SunPower®
Owning a solar system yields the highest return on investment as the payback period can be seen in as little as 5-7 years - This is due to several benefits only found with a solar purchase:
YOU own the system and the energy it produces.
No monthly payments towards energy consumption.
Increases home's premium value (Adomatis & Hoen, 2016).
Eligible to receive federal and state incentives totaling at least 26% return (extended until 2022).
There are two ways to purchase solar: Cash purchase or solar financing. Due to the national demand to reduce each state's carbon footprint, interest rates on solar loans are competitively low compared to conventional financing. In addition, solar loans do not impose closing costs or pre-payment penalties; making it easier to pay down the investment sooner and reap the benefits more quickly; however, many of our homeowners have benefitted even more by utilizing their home's equity to buy as cash to maximize the savings.
Make an appointment with us today and have us guide you to owning your solar system with the area's most trusted and experienced
team in solar.
The Federal ITC (Investment Tax Credit) is a tax credit from the federal government that can be applied to the purchase of a solar system for either residential solar installation (Section 25D) or commercial and utility solar installation (Section 48). In 2020, the ITC credit for eligible solar installation projects is 26% (extended until 2022).
The benefit of this credit is that it will help shorten the payback period and substantially reduce interest costs. For example, if buying with a loan, the ITC can reduce the interest cost over the life of the loan by paying down the principal early. If the system is paid in cash, the ITC becomes an immediate return on investment (ROI).
Here's an example of an ITC value:
Gross Solar Purchase Cost = $25,000
Federal ITC = $6,500
NET Cost = $18,500
... And that savings is only the beginning and doesn't include state rebates and incentives.
Each state in the nation is participating in the pursuit to reduce its carbon footprint by incentivizing its residents and businesses to convert to solar energy. Right now, many markets are offering SRECs or TRECs (or other similar incentives) that pay back the solar investor through cash valued credits for every 1000 kilowatts of energy the solar system produces onto the grid.
Here's an example of how New Jersey state incentivizes its residents with TRECs:
NJ TREC Value = $91.20 p/ 1000 kWs
Average NJ home energy production in kilowatts = 10,000
TREC Cash Value p/year = $912
NJ 15-year TREC Program = $13,680 (over 15-years)
Make an appointment with us today and have us show you how both the federal and your local state's solar incentives can work to have you
Save with Solar.