The Difference Between Purchasing and Leasing a Solar Panel Power System.

Which is the better option for you?

This is dilemma that plagues a big section of homeowners when shifting the gears from conventional power to solar energy.

A leasing arrangement is designed to offset some of the prohibitive costs of installing and purchasing a personal solar energy system. In such a plan, instead of owning the installation and power produced, you rent it from a third party financing company.

This way, the solar company offering the lease installs and maintains your solar energy system, in return for monthly payments from you over a period of up to 20 years. After the end of the lease, you can decide whether or not to renew your agreement.

Keep in mind that should you decide to lease a solar power system, you will be forfeiting all tax incentives and rebates associated with purchasing or financing a solar project.

Tax Incentives and How They Work

In a move to encourage more people to adopt green energy, utility companies and state governments have introduced attractive incentives for solar power owners.

For example in most states in the US, purchasing a medium-sized solar grid-tie system attracts a 30% federal tax credit. Therefore, a $10,000 purchase can reduce to less than $7000 if the project is undertaken through personal financing and not via a third-party lease.

Be advised, however, that rebates and incentives only cover the purchasing of equipment and not the installation work.

Who Can You Hire to Handle the Installation of Your Solar Power Project?

Although a DIY project is a good way to save money when installing solar panels, most of the time, homeowners tend to expose themselves to risks and losses while trying to mount the inverters and panels themselves.

Hiring an experienced and licensed green energy contractor is one of the best ways to ensure that your panels are fitted correctly, and at the same time avoiding unnecessary loss and injury.

Although the initial cost of a solar panel power project can be steep, the long-term benefits of enjoying a consistent and free power supply are usually worth the extra dime.