What’s the possible benefit of leasing solar panels for your home?
One way for a homeowner to obtain the benefit of solar panels is to lease the panels, rather than purchasing them. If a homeowner wished to purchase them and install them on the property then the homeowner could simply pay cash, or use other means of financing them including home equity loans or PACE programs where available.
Why would people prefer to lease rather than buy solar panels?
Solar leases, like automobile leases, allow a homeowner to get solar panels in place without a big upfront expenditure. Rather than have to obtain the funds to pay for the installation and maintenance of the panels, the homeowner can often get panels installed without any upfront payments and the leasing companies will maintain the solar panels as part of the lease payments. The homeowner benefits because the energy savings from the installation of the panels is greater the cost of the lease payments.
What makes more sense financially: to purchase or to lease solar panels?
The economics of leasing versus buying is difficult to assess as a general matter. For example factors which would weigh into such a decision would be whether the homeowner requires financing and what the interest payments would be, and whether or not the costs of the lease will rise over time as some solar companies raise the monthly fee yearly, as well as the availability of state and federal tax incentives. Another consideration is that purchased solar panels are also included in appraisals of the value of the home for conventional financing (see question 31). A homeowner should spend time comparing the costs and benefits before being deciding whether to purchase or lease.
Is a leased solar panel system real property?
As these are leased items they are generally treated as personal property rather than real property fixtures.
By Harrison K. Long, Realtor and professional real estate representative, Evergreen Realty HomeSmart, Orange County CA – 949-701-2515 (cell or text) – CAL BRE 01410855 – also an attorney member of the CA State Bar Association #69137. This article is for information only and is not the providing of legal services.