Solar photovoltaics (PV) systems can provide affordable electricity to your residence. Solar systems are a viable and increasingly attractive method of generating power for existing Massachusetts homes and businesses that buy their power from local utilities or would like to be completely independant and off-grid. Why? Solar panel systems are now more efficient than ever, and rising electric rates, lucrative incentive programs and environmental concerns have compelled many individuals and companies to think seriously about installing solar PV systems.
Should I Lease or Buy My Residential Solar System?
If you’re wondering whether such an investment is within your reach, a good place to start is comparing the pros and cons of the three options available: purchasing/owning a solar power system,“buying” solar power with a Power Purchase Agreement (PPA) or leasing a solar power system.
Ownership has become more and more appealing for multiple reasons that we decribe below.
A PPA is a financial agreement where a developer sells the power generated to the host customer typically at pre-determined prices for a specifc amount of time.
With a lease, you essentially rent the solar power system for a fixed amount of time while buying a solar power system gives you full ownership and benefits for the life of the system.
Leases and PPAs are quite similar in terms of their pros and cons and most solar companies are selling solar ownership. The fundamental probelm with leases and PPA’s is that you dont own the system therefore you do not get the tax benefits and other incentives in most cases. In addition moving can get complicated if you want to sell your home.
We Encourage Ownership
Solar system ownership comes with many of the same benefits enjoyed by people who lease such no/low upfront costs, plus a few additional advantages.
With ownership, you are entitled to ALL the energy savings that come with installing a solar system on your house. Compared to a lease/PPA, you reap all of the benefits of the power produced by the solar system and can enjoy having them applied to your utility bills.
You can build up equity in your system similar to how you build equity on your home. Typically, homes with solar power systems appraise for higher values, and you can sell your home without having to find someone willing to take over lease payments.
When you buy or finance your system, you get to make predictable and steady monthly payments on it. You are not subject to built-in price escalations like those that come with a lease or PPA. You can budget accordingly and avoid unpleasant markups when you purchase your system outright because your payments are fixed.
You Get to Keep the Tax Credits and Incentives
You are entitled to claim the tax benefits and other incentives. The IRS encourages the use of environmentally friendly energy like solar power in people’s homes. A 26% tax credit is available through the federal government. This can go toward a loan or help pay for part of the system. This incentive will decrease each year and eventually be phased out so take advantage of it while you can!
Many states including Massachusetts also have an additional residential tax credit, in addition to the federal credit. Search the Database of State Incentives for Renewables & Efficiency (DSIRE) here to find incentives in your area.