Solar buying is much better than leasing
Nevada is famous for its dry, sunny weather, and this is part of what makes going solar such an attractive proposition to homeowners in Las Vegas. There is no doubt that installing a residential solar energy system can provide many benefits. Primarily, it allows you to drastically cut down on your energy bills while also helping to reduce pollution and shrink your carbon footprint. Adding to these advantages is the fact that the average cost of solar panels and other solar components has dropped by over 50% in less than a decade.
It is true that solar systems take a commitment, and going solar usually requires a fairly substantial initial investment. This is precisely why so many people consider leasing their solar equipment in order to lower these one-time costs. However, the truth is that purchasing your residential solar equipment up front is almost always the smarter decision. When it comes to solar, the long-term benefits outweigh the short-term costs. Consequently, it is important to carefully consider all of the following differences between buying and leasing your solar equipment in order to understand the best option for you and your family.
To Lease or Buy: Why Spending More Upfront is Always the Better Option
Once you’ve decided to switch to a solar energy system, the very first thing you’ll want to do is consider all of your options for installation. The huge growth in the popularity of solar in Las Vegas means that you’ll have no problem finding a range of wonderful solar power companies hoping to earn your business. You are also sure to come across numerous companies that “specialize” in solar leasing and claim to offer you the cheapest, easiest way to lower your energy bills.
While this last part is almost true, as any solar system will definitely allow you to cut back on electricity costs, whether you own or lease the equipment doesn’t make a bit of difference in its solar energy-generating capabilities. For many people, the idea of getting a full solar system with only minor upfront costs can make leasing seem like a great deal (at first glance). However, the fact is that most of these solar leasing agreements end up being way too complex and convoluted for the average person to fully understand all of the costs and many drawbacks involved.
Instead of owning your own equipment and being able to sell or replace it as you wish, a solar lease means you’ll be tied down to a long-term contract—typically somewhere between 10 and 20 years. Unfortunately, this lease can be hard to transfer should you decide to sell your home before you’ve fully paid off the solar equipment, as it requires the new owners to have a good enough credit score to qualify to take over the lease. If they don’t, you will be forced to prepay the remainder of the lease before selling your home.
What this means is that a leased solar system can often scare off potential home buyers and could actually result in you being forced to sell your home for less than your asking price. When purchasing a solar system, alternatively, the total value of the system is always figured into the home’s final appraisal price. It is estimated that homes with solar sell, on average, at a $15,000 higher premium than homes without solar. Furthermore, a home’s value increases by $20,000 for every $1,000 in energy savings! In short, buying a solar system can boost the overall value of your home, which is something that can’t always be said for leased solar equipment.
The Importance of the Federal Solar Energy Tax Rebate
One of the reasons that so many companies have jumped into solar leasing is that it makes excellent financial sense for the company. Why? These companies take advantage of the federal solar energy tax rebate program to save up to 30 percent of their total equipment costs, but these savings are never passed on to you as their customer. However, this same renewable energy tax rebate program is also available to residential customers who purchase their own solar power system, even if it’s for a secondary residence.
As part of the most recent 2018 budget act, Congress extended this tax rebate program through the end of 2021. This means that you are eligible for a tax rebate of up to 30 percent of the total purchase costs for any solar power or other qualifying renewable energy systems that were purchased and installed any time between January 1, 2016, and December 31, 2019. This rebate then drops to 26 percent for systems installed during 2020 and then to 22 percent during 2021. Moreover, Nevada allows for net metering (the resale of excess energy at 95% of the retail rate), and NV Energy offers its customers a SolarGenerations Electric Incentive Rebate for solar systems under 25kW.
What this means is that not only does purchasing your equipment boost the value of your home and, of course, provide numerous other important benefits, but it also doesn’t have to be impractical. Due to these rebate programs and incentives, more and more families can afford to adopt solar energy systems and set off on the path to energy independence. In this sense, purchasing your solar system is always the best option. Otherwise, all you are doing is allowing someone else to take advantage of these cost-saving benefits.
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