The movement toward sustainable living and energy independence has seen solar energy grow in popularity across Pennsylvania. Homeowners, motivated by reducing their carbon footprint and escaping ever-increasing utility bills, are increasingly looking up at their roofs.
But once you’ve decided to go solar, you’re faced with the crucial decision of whether to purchase or lease solar panels. Getting a good grasp on the ins and outs of owning versus leasing is an important first step to making the best choice.
Understanding the Differences
While both ownership and leasing put panels on your roof, the underlying agreements are worlds apart. When you own your solar system, you pay the up-front cost or finance it with a loan, and immediately become the system’s legal owner. You’re responsible for maintenance and monitoring, but you also reap certain benefits, such as getting solar renewable energy credits (SRECs) and rebates.
A solar lease, or a power purchase agreement (PPA), is different. Think of it more like renting. A company installs the panels on your roof, often requiring little to no money out of your pocket. Then, you make a monthly payment for the equipment itself. With a PPA, you’re agreeing to buy the electricity the panels generate at a special, lower rate per kilowatt-hour. In both cases, the third-party company remains the system’s legal owner.
Financial Implications for Pennsylvania Homeowners
The financial impact of leasing versus buying is arguably the biggest differentiator. While leasing may seem appealing because of the zero-down or low-cost entry, ownership offers a much better long-term return on investment (ROI).
Ownership
When buying solar panels, you qualify for Solar Renewable Energy Credits (SRECs), which can be sold. These incentives drastically reduce your net ownership cost. You’ll also quickly notice electricity savings. Once your solar panel system is paid off, your electricity costs are essentially limited to minor utility connection fees.
Leasing
While you get the panels with little money down, the leasing company gets to pocket any SREC incentives. Even though you’ll probably pay less for electricity than you did before, your monthly lease or PPA payment often comes with an escalator clause. This means your payment goes up by about 2% to 3% every year for the entire contract. Over the lifetime of your panels, those increases add up and eat into your total savings.
In fact, you might end up paying more for the system than if you’d bought the system outright. Essentially, you’re swapping one monthly bill for another, and in doing so, you miss out on the tax benefits and the long-term value of owning the system yourself.
Control and Flexibility Considerations
Control over your property and equipment is another major factor when leasing or buying solar panels.
As an owner, you have total control. If you want to add more panels, upgrade your inverter or install a battery storage system, you can do so immediately on your own terms. With a lease, you must petition the third-party owner for any changes. Any modifications are subject to their fees, approval and scheduling. This lack of control can be frustrating as your family’s energy needs evolve.
Solar systems have a typical lifespan of 25 years or more. Over that time, many things can change, particularly if you decide to sell your home. If you own the system, the asset is simply part of the house sale. If you lease the system, you must either buy out the remainder of the contract or find a qualified buyer willing and able to take over the lease agreement.
The Real Estate Perspective
While the effect of solar on home sales is complex, owned solar systems in Pennsylvania may offer advantages in the real estate market. Appraisers and real estate agents might see an owned, paid-for solar system as a desirable feature that could increase a home’s appeal.
A leased system generally doesn’t add value to the home. In fact, the difficulty in transferring the contract can reduce your pool of potential buyers and, in effect, decrease the home’s marketability. It can be a liability, a financial obligation that the new owner must assume.
Pennsylvania-Specific Considerations
The local environment and regulatory landscape in Pennsylvania make the case for ownership even clearer.
Utility Interconnection Policies
PA solar companies follow a statewide standard for net metering. Net metering allows your solar system to send excess power back to the grid and credits your account at the full retail rate. This mechanism is crucial for maximizing your investment, and it works whether you own or lease. However, only owners get to reap the additional benefit of SREC income.
Pennsylvania Weather and Performance
Pennsylvania’s climate, with its mix of sunny days and heavy snow, demands a high-quality, reliable system. As an owner, you get to choose the best panels and equipment built to withstand local conditions, ensuring maximum production even on cloudy days. Leasing companies sometimes opt for cheaper, lower-efficiency panels to keep their costs low.
Take Control of Your Energy Future
The choice ultimately comes down to whether you want to be a passive renter of power or an active owner of an asset. For most homeowners to maximize their savings, increase their property value and retain full control over their most valuable asset, ownership is the best path.
KC Green Energy can help. We’re committed to making the ownership model accessible and straightforward. We support solar ownership by installing and designing solar roofing systems for residential locations. We use equipment built to last decades in Pennsylvania’s environment, ensuring maximum energy production and ROI.
You can also count on us for flexible solar financing options. We connect you with specialized, low-interest solar loan options that allow you to go solar for up-front costs, while still benefiting from tax incentives.
We handle the entire process, from site assessment and paperwork submissions to installation, so you can experience a seamless transition to energy independence. We’re the only solar company in Central PA with both roofing and general contracting skill sets.
Contact Us Today
By partnering with us to own your solar system, you’re investing in your home and a cleaner, more secure energy future. Contact us today to learn more about our residential solar panel solutions!