Although a rarity overall, solar power has become a consistently considered alternative energy source for most Americans. Much like EVs, its adoption is still lagging overall, but the progress is undeniable. Data from a 2022 Pew Research study found that, overall, about 39% of Americans had “given serious thought to installing” solar panels at their home, and 8% already had.

And there’s no doubt that the consideration for them has continued to increase over the past two years and progress continues to be made in the industry—the main question, for many, is this; should I lease or buy them? Ultimately, your decision will depend on a lot of variables that must be taken into consideration—things like upfront costs, long-term goals, and access to financial incentives. Let’s break it down.

Leasing Solar Panels: Pros, Cons, and Costs

Leasing solar panels allows you to go green without high upfront expenses. The leasing company owns the system, and you pay a monthly fee. Costs range between $50 and $250 per month, with an average around $150.

Benefits of Leasing

1. Low upfront costs: Ideal for homeowners who can’t afford a large initial investment.
   
2. Maintenance included: The leasing company handles all repairs and upkeep.
   
3. Predictable expenses: Fixed monthly payments simplify budgeting.

Drawbacks of Leasing

1. No ownership benefits: You don’t own the system, missing out on long-term energy savings.
   
2. Limited tax incentives: Rebates and credits go to the leasing company, not you.
   
3. Selling your home: Transferring a lease to a new homeowner can be complicated.

Tax Incentives for Leasing

While you don’t directly benefit from federal tax credits when leasing, some companies pass on a portion of the savings by lowering your monthly payment or upfront costs. Be sure to clarify how the credit is applied with your leasing provider.

Tools to Explore Leasing Options

• Sunrun
• Vivint Solar
• Tesla Solar Rental

‍Buying Solar Panels: Costs and Ownership Advantages

Purchasing solar panels gives you full ownership and access to incentives like the federal tax credit.

Costs of Buying

The average cost of a residential solar system is $25,000 to $50,000, depending on size and type. After applying the 30% federal tax credit, this typically drops to $18,000 to $38,000.

1. Price per watt: Solar panel costs are typically $2–$3 per watt.
   
2. Factors affecting costs: Roof design, local labor rates, energy needs, and panel type all impact the total cost.

Benefits of Buying

1. Tax incentives: You can claim the federal tax credit and possibly local rebates.
   
2. Energy savings: A 6 kW system saves about $1,500 annually, with lifetime savings between $28,000 and $120,000, depending on electricity rates and location.
   
3. Increased home value: Owned solar panels can add to your property’s resale price.

Drawbacks of Buying

1. High upfront costs: Requires significant investment unless financed.
   
2. Maintenance responsibilities: You’re responsible for repairs after the warranty period.

Comparing Costs Over Time

Over a 10-year period, leasing solar panels for $150/month would cost about $18,000, with no ownership or energy resale benefits.

By comparison, buying panels outright for $25,000 (minus $7,500 in tax credits) results in a net cost of $17,500. Considering typical annual savings of $1,500 on electricity, you could save $15,000 over 10 years, significantly offsetting your investment.

Financing options are available to reduce upfront costs. Check out these tools to calculate personalized terms:

• EnergySage Solar Loans
• Solar.com Financing Calculator

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Additional Considerations

1. Location Matters: Solar panel efficiency depends on your state’s average sunlight and energy rates.
2. Homeownership Plans: If you plan to move soon, leasing might be more practical than buying.
3. Energy Needs: Larger households with higher electricity consumption may see quicker payback periods.
4. Net Metering: Some states allow you to sell excess solar energy back to the grid, increasing your ROI.

Bringing It All Together

Leasing solar panels is an affordable way to access clean energy, especially if you’re not ready for a large upfront cost. However, buying panels—either outright or through financing—offers greater financial and environmental benefits over time.

Evaluate your financial goals, energy needs, and plans for your home to make the best choice. Remember: the decision isn’t just about cost—it’s also about taking control of your energy future.