Total Macy’s, Inc. Solar Electricity Production on 04/25/2018

15,444 YTD

12,664 YTD

$1,708,106 YTD

28,108,068 YTD

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Solar Panels for Your Home: Buy or Lease?

POSTED UNDER Energy & Conservation

As solar panel costs decrease while energy rates only continue to increase, solar installation has become a very attractive option for homeowners. In fact, the amount of solar megawatts installed in the United States is up 41 percent from the same time last year, according to Solar Energy Industries Association. And more than 600,000 homes in America now have solar panels.

There’s no question that solar panels are better for the environment and your budget. But is buying panels worth the investment or is leasing the best option?

The great thing about solar panels is that they literally end up paying for themselves. The return on investment is 10 percent to 30 percent each year depending on the number of panels installed and the size of your home. Macy’s associate Paul Deyden actually realizes a profit through his solar panels, selling energy back to the grid while powering his home and his electric car. On top of that, the federal tax credit for solar energy allows you to subtract 30 percent of your system’s cost from your annual tax bill.

And it turns out owning solar panels can increase the value of a home. On average, each kilowatt of installed solar energy garners an estimated $5,900 premium in value at the time of sale, according to the Lawrence Berkeley National Laboratory.

However, there’s a lot of upfront cost and work for the homeowner when buying solar panels. Depending on the size of your home, a system can cost $20,000 - $40,000 upfront. And it’s up to you to figure your eligibility for tax incentives. Solar panels last between 25 and 30 years with little to no maintenance – but if a problem does occur, it’s up to the owner to fix it.

The biggest advantage of leasing solar panels is the low risk and overhead involved. Solar leasing requires no upfront cost and it’s installed and maintained for you. All you have to do is pay your monthly lease bill. Energy rates are increasing, so the cost of leasing takes the place of energy bills – which is cheaper in most cases.

Now for the downside; these leasing arrangements are primarily arranged in sunny states that have generous subsidies. And homeowners are running into problems when selling their home; if you lease solar panels and decide to sell, the person buying your home must qualify on their own through the solar-lease provider.

The Outcome?
The great thing about leasing or buying is that the environmental benefits are the same; you’re helping the environment and reducing your carbon footprint dramatically. But the economics are very different.

Savings are maximized long-term through buying. After paying off your investment, you’re looking at approximately 15 years of free energy. However, the investment is major and certainly isn’t right for every homeowner. Leasing is a fantastic alternative if there are too many barriers in buying.

If you’re considering a solar investment and don’t know whether to lease or buy, this Solar Calculator can guide you in the right direction.

No matter what option you select, the fact that you’ve invested in solar energy is the important thing. But everyone is different. Figure out which option works best for you and your home.