Solar Energy System

Facts about buying a Solar Energy System


Buying
Purchasing a solar energy system means paying for it up front. You can purchase the system from an approved contractor or manufacturer. Another option is financing the system through a bank loan. You own the entire system, which most manufacturers guarantee for up to 25 years.


Benefits
Lower monthly electricity bills.
Greater return on investment.
Increased home value.
Minimum 10-year warranty.
Possible 30 percent federal investment tax credit and other deductions.


Cost
Expensive components, like the inverter, might need replacement after the warranty.
Extended service agreement for maintenance, repairs and insurance.
Risk
You are responsible for maintenance costs.
A performance monitoring system might be necessary as an add-on service to monitor your energy production.


Advice Given
You might be able to finance your purchase of a solar or renewable energy system by taking a home equity loan or secure line of credit. Both options may be eligible for tax deductions. Speak with your tax advisor before you purchase.

Leasing

Leasing allows you to “rent” the renewable energy system for a set time period. Generally, you pay a fixed monthly rate no matter how much energy the system produces each month.
Lower monthly electricity bills.
No large, upfront investment.
Typically, no costs for system operations, monitoring, and maintenance.
Fixed monthly rate, regardless of how much electricity is produced.
Typically break even or saves money in the first year.
Typically, performance guarantees provided.


Price
The monthly price of your lease might increase over time.
Risk 
Might cease to provide contracted operations and maintenance if the lease provider goes out of business.
You must consider a purchase or buy-out options in your contract.


Advice Given
Agreements are long-term, with specific fees that might increase over time. Understand any changes in your monthly rate over the lifetime of the solar lease agreement. Ask about your purchase options. Prepaid leases might also help reduce your monthly payments.