Should You Lease or Buy Your Next Solar Photovoltaic System?

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If you’re pondering this question, you likely already know the benefits of photovoltaic (PV) solar systems. Solar PV, which converts light photons from sunlight into electricity, is an increasingly popular way to generate electricity from clean, renewable sources.

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Idaho currently ranks 21st in the country for solar energy production, and energy management Boise companies have so far installed approximately 414 MW of solar across Idaho. Additionally, 57,475 homes in Idaho are currently powered by solar. And although only 3.47% of Idaho’s electricity comes from solar, the production, manufacturing, and installation has created 654 solar jobs in Idaho.

While there are many social, environmental, and economic benefits associated with solar, financing an entire PV system can be cost prohibitive. If you’re interested in going solar but don’t have the cash to pay for a system up front, you have several financing options, though laws and policies are different in each state.

 Purchase with Cash or a Loan

Purchasing a solar PV system outright or with a loan means that you own all the electricity it produces, once the loan matures, but you are also responsible for maintenance and upkeep. While the up-front costs can be significant, the system will, in theory, yield a high enough return on your investment to pay for itself over its lifespan.

The outright cost will also depend on your state and any existing tax credits or incentives. Solar Meridian customers, for example, can take advantage of low-interest loans aimed at boosting residential energy projects. Idaho homeowners can leverage a 4% interest rate over the course of five years, and single-family homeowners can access up to $15,000 in low-interest loans.

 Lease

Depending on the regulatory framework in your state, you can likely lease a solar system from the solar company. The company owns and is responsible for maintaining the system, and you make monthly “lease” payments to the company at an agreed-upon rate.

Many companies will offer several financing options to help cover the cost, including no or low money down, tax-deductible, interest-free, or a pre-determined rate schedule. All of this should be clearly stipulated in the contract prior to signing.

 Power Purchase Agreements

A power purchase agreement (PPA) is similar to a lease, but instead of paying a monthly rate, you actually pay a price per megawatt for the electricity generated by the system. Like a lease, the solar company owns and maintains the system, and the price per megawatt will be stipulated in the contract.

It’s important to note that not every state allows PPAs, though they are legal in Idaho. In 2015, the Gem State’s Public Utilities Commission voted to reduce the term of PPAs to 2 years for all solar systems larger than 100 kilowatts or 0.1 megawatts.

 Which Financing Option Is Best for You?

There is no single best way to install a solar system on your house. But the benefits of each financing strategy will yield positive economic and environmental results. The primary differences between owning and leasing (including a PPA), boil down to the amount of money you can or want to spend up front, whether you want to own the system outright, and whether you have the technical expertise to maintain the system yourself.

 About EvenGreen Technology

EvenGreen Technology offers sustainable, competitively priced solar power solutions to Twin Falls solar clients and residents throughout the Northwest.EvenGreen Technology provides a holistic approach to energy efficiency with modern technologies, advanced designs, effective engineering, high-quality installations, consumer education, and reliable products.

For additional information, visit Evengreentechnology.com

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