Solar leasing and financing options

Solar energy is becoming an increasingly popular choice for homeowners and businesses looking to reduce their carbon footprint and save on energy costs. However, the upfront costs of installing solar panels can be a significant barrier for many people. That's where solar leasing and financing options come in.

What is solar leasing?

Solar leasing is a financing option that allows homeowners and businesses to "lease" solar panels instead of purchasing them outright. With a solar lease, the solar panel system is owned by a third-party company, and the homeowner or business pays a monthly fee to use the system.

Benefits of solar leasing

One of the main benefits of solar leasing is that it eliminates the upfront costs of purchasing solar panels. This makes solar energy more accessible to a wider range of people. Additionally, solar leasing companies typically handle the installation, maintenance, and repairs of the system, so homeowners and businesses don't have to worry about these tasks. Also, the solar system does not show up on the homeowners credit as a debt being that a third party owns the system.

Drawbacks of solar leasing

While solar leasing can be a great option for some, it's important to consider the drawbacks as well. Since the solar panels are owned by a third-party company, the homeowner or business does not receive the same financial benefits as they would if they owned the system outright. Additionally, the terms of the lease can vary, and there may be restrictions on transferring the lease if the property is sold.

What is solar financing?

Solar financing is another option for those looking to install solar panels. With solar financing, homeowners and businesses can take out a loan to cover the upfront costs of purchasing and installing a solar panel system.

Benefits of solar financing

One of the main benefits of solar financing is that the homeowner or business becomes the owner of the solar panel system. This means they are eligible for the financial benefits, such as tax credits and incentives, that come with owning a solar system. Additionally, once the loan is paid off, the homeowner or business can enjoy free electricity from the sun.

Drawbacks of solar financing

You will need to have a minimum 650 FICO score and the loan will show up on up on your credit score, unlike the lease option that does not affect your DTI (Debt to Income).

Which option is right for you?

Deciding between solar leasing and solar financing depends on your individual circumstances and goals. If you are looking to reduce upfront costs and don't mind not owning the system, solar leasing may be a good option for you. On the other hand, if you want to take advantage of the financial benefits of owning a solar system and have enough taxable income at years end to claim the 30% ITC (Investment Tax Credit), solar financing may be the better choice.

Ultimately, both solar leasing and solar financing can help make solar energy more accessible and affordable for homeowners and businesses. Whether you choose to lease or finance your solar panel system, you can feel good knowing that you are making a positive impact on the environment and saving money on your energy bills.