Lease or buy solar? Either choice will save you money in the long run

Here is something that your utility neglected to tell you last time they sent you your big bill: It now costs less to make your own solar power than it does to pay the utility for that power.

So why buy the solar when you can lease it for less? This is a question that many people in Mesa County are now asking themselves. At first glance, the answer appears simple. Yet, as with most situations, there is a lot more to it than meets the eye.

Let me give you an introduction to the relative advantages and disadvantages of buying solar versus leasing solar for your home or business. The more you know the two options, the better decision you can make.

Whether you decide to buy the solar or lease it, either way you save money right now. The worst decision you can make is to do nothing. Why? Your utility bills increase 5-15% on a compounded basis every year! This means that your current $1,200 annual utility bill will be $1,800 inside 5 years — a 50% increase from what you pay now!

Purchase or lease solar now and you have guaranteed yourself a long-term lower rate for your electricity. The solar lease now makes solar available to a much larger segment of society. Over 50% of all of the residential solar electric systems installed in Mesa County are now leases. Now, let's look at leasing solar versus buying solar.

The main advantage of leasing solar is that you are saved the larger upfront costs of buying solar. A solar lease can be done for as little as $0 down. Although, the more that you can invest in the solar lease upfront, the greater will be your immediate savings from the solar. When you lease solar, the solar maintenance is the responsibility of the leasing company. And your leasing company may provide you with a solar performance guarantee. You get the financial, personal, and environmental benefits of solar without all the responsibility of a purchase. Solar leases typically last 20 years and the payer of the solar lease must have a minimum credit score of 700.

When you purchase solar, your all-around returns are much greater. When you purchase the solar, you collect the rebates, tax credits, and other environmental benefits rather than the leasing company. When you own the solar, the utility usually pays you much more for the power you produce. When you purchase the solar, you make money on the added value that solar has given your home or business. Homes with solar do have a higher resale value. And as the owner of the solar electric system, there is relatively little maintenance.

The principal trade-off to consider in buying or leasing the solar is the amount of the upfront expense versus the long-term savings. Purchasing solar offers the highest long-term return, but involves a large up-front cash expense. The solar lease offers reduced monthly lease payments, which gives you immediate and modest savings over your previous electricity bill. However, the lease results in less money saved over 20 years as compared to the solar purchase.

Whichever way you decide to do solar, do it now and start saving today. Remember what your utility forgot to tell you — solar power is now less in cost than the power that you purchase from your utility.