Long-Term Savings Benefits of Owning Solar Panels
1. Greater Total Savings Over Time
Homeowners who purchase solar panels outright typically realize significantly more savings over the system’s lifetime—often between $31,000 and $100,000 over 25+ years—because they avoid ongoing lease or power purchase agreement (PPA) payments and fully benefit from all generated electricity. The average U.S. homeowner can save about $50,000 on electricity bills over 25 years by owning their solar system.
2. No Ongoing Lease Payments
Leasing solar panels usually involves monthly payments or PPA rates that reduce your electricity bill savings. While leasing lowers upfront costs, it also caps your financial benefits because you do not own the electricity generated. Ownership means free electricity after the initial investment, aside from possible minimal grid costs.
3. Eligibility for Tax Incentives and Credits
Homeowners who buy their solar panels can fully take advantage of federal tax credits (such as the 30% Investment Tax Credit) and often state/local incentives, which substantially reduce the initial cost and improve overall return on investment. Leasing agreements often limit the ability to claim these credits because ownership technically remains with the leasing company.
4. Increased Home Value
Owning solar panels adds value to your home, with studies showing a premium of about $15,000 on average. This increase is typically not available if the system is leased, since the panels are not considered a home asset you own.
5. Protection From Rising Energy Costs
By owning your system, you effectively lock in your electricity rates and are insulated from future utility price increases. Leasing contracts may have escalators or fixed pricing but do not guarantee the same financial predictability as ownership.
6. Long System Lifetime Beyond Warranty
Most solar panels last well beyond their 25-year warranty, potentially providing savings for 30 years or more. Ownership allows you to reap these long-term benefits fully, whereas leases typically have fixed terms after which you might have to renew or switch.
Summary Table: Owning vs Leasing Solar Panels on Long-Term Savings
| Feature | Owning Solar Panels | Leasing Solar Panels |
|---|---|---|
| Initial Cost | High upfront cost (mitigated by incentives) | Little to no upfront cost |
| Monthly Payments | None (except minor grid costs if any) | Monthly lease or PPA payments |
| Total Lifetime Savings | $31,000 to $100,000+ | Lower overall savings due to payments |
| Tax Credit Eligibility | Full eligibility for federal and state credits | Usually none (credits go to leasing company) |
| Home Value Increase | Adds ~$15,000 on average | Usually no increase |
| Protection Against Rate Hikes | Yes, locks in energy costs | Limited protection |
| Long-Term Control | Full control over system after payback | Limited control, depending on contract |
In conclusion, owning solar panels is a more financially advantageous option in the long run compared to leasing. Although ownership requires a higher initial investment, the substantial lifetime savings on electricity bills, access to tax incentives, increased property value, and protection against rising energy costs make it a prudent and profitable investment over decades. Leasing presents lower upfront costs but generally results in less overall long-term savings.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-long-term-savings-benefits-of-owning-solar-panels-compared-to-leasing-them/
