The Solar DilemmaPurchasing a solar system outright (without installment financing), is far and away the best option. You will enjoy immediate savings, and recoup your investment cost far quicker than if you were paying interest on a loan or leasing the equipment.
If youâve leased a system or purchased it in installments, that means you didnât have the thousands of dollars it costs to purchase one up front, but you still wanted to enjoy the benefits of solar energy, including energy savings, tax breaks, and an increase in the resale value of your home.
The problem is, your monthly payments may not be much less than your old power bill. PPAs come with high interest rates, and lease payments are equally expensive, which means your real savings will only start when your lease or PPA terminates. With an average contract length of 20 years, that probably wonât happen any time soon.
You may have also made a down payment, which puts you further underwater, and if you leased your system, you arenât eligible for any tax rebates or incentives. Worse still, if you sell your home before your lease is up, youâll need to convince buyers to take over the lease- otherwise, youâll need to pay it off before you can close the sale.