Which is Advisable, Buying or Renting Your Solar Panels?
By : Next Level Energy | June 7, 2019
Your specific financial objectives
determine your choice on how to finance your sun-based power system.
The primary difference between purchasing and renting a sun-based PV system is in possession. Purchasing a sun-based power system (either by paying directly with cash or paying off a solar system loan) gives you full ownership of the system. The sun based power system is owned by a third party if you rent the system or consent to a PPA (Power Purchase Agreement).
This difference
affects your sun-based power system’s investment, maintenance cost, terms,
savings and degree of profitability. Moreover, not all organizations offer
solar renting as well as PPA so do well to ensure that your selected supplier
offers the financial option which you desire. Note that PPAs are not lawfully
allowed in many zones.
It is best for you to acquire a sun-based
power system with money or financing a solar loan purchase if you….
- Need to maximize the budgetary advantage of introducing a sun-based power system, instead of taking advantage of the ecological benefits of the system alone;
- Are qualified through bureaucratic venture charge credit to decrease your government and state charge risk;
- Are business and you can take advantage of tax cuts by regarding the sun-based power system as a depreciable resource;
- Need to expand your home’s market estimation by introducing a sun-based power system.
Your best solar alternative is to rent or
PPA when you…
- Are basically interested in taking advantage of the
ecological benefits of the system as opposed to maximizing
the budgetary advantage of introducing a sun-based power system;
- Need to stay away from the obligations of upkeep or fixes
for sun based power system;
- Are not qualified by investing in a sun-based power system
to decrease your government and state charge risk;
- Cannot wait till the next year for the budgetary advantage
of tax credit.
Carefully analyze: Purchasing VS renting
solar
There are a lot
of distinctions in the cost, upkeep, terms, financial offset opportunities, and
investment savings/returns which all depends on your choice of financing.
Cost of solar installation
Solar rent/PPA
- A sun-based power system can be gotten for little
money or even nothing.
- Only the third party owner of the system can receive
incentives, refunds, and tax credits so you won’t eligible for all those.
Solar
loan/purchase with money
- Before refunds and incentives, the sun-based power system
can cost between $15,000 and $30,000.
- You can get up to a 50% reduction in the total cost of
cash purchase. Majority of the solar installers will deal with the
administrative work and modify the price tag to reflect the total cost.
Solar Maintenance
Solar
loan/purchase with money
- You are responsible for the upkeep of the system because the system belongs to you. Solar equipment lasts for a long time and often comes with warranties so there is less upkeep for you to do.
- Your purchase might not include an application to track your system’s framework execution.
Solar rent/PPA
- The obligations of upkeep are solely by the solar company because they own the system.
- Most of the time, you get an application that tracks your system’s framework execution.
Terms
Solar loan
- Loans are commonly accessible for terms of 10 to 20 years
at an interest rate of 3% to 8% provided you have a 640 or higher FICO rating.
Solar rent/PPA
- Solar rent/PPA is commonly for a period of 20 to 25 years
after which you can decide to renew the agreement or buy the system directly.
Investment savings/returns
Solar
loan/purchase with money
- Based on your property as well as the incentives in your
zone, you can spare up to 40% to 70% on power cost throughout the lifetime of
your sun-based power system.
- You get free electricity throughout the lifetime of your
sun-based power system (which usually ranges from 25 to 30
years).
Solar rent/PPA
- Based on your property as well as the incentives in your
zone, you can spare up to 10% to 30% on power cost.
Before making your decisions on whether
to purchase or rent your sun based power system, thoroughly analyze your
financing options.
Make sure you explore
all the available financing options before making your decisions. All scenarios
are not the same so there a quite a number of factors to consider to determine
what is best for you.