There are several ways to purchase solar for your home including buying (either buying outright or using cash financing to buy) and leasing solar panels. The difference between buying and leasing solar comes down to who owns the solar, which changes who benefits from the solar tax credits. If you purchase the solar you naturally own it and get the tax credit, but with leasing the bank “owns” the system and thus gets the tax credit.
Learn more about the federal residential clean energy credit.
Pros and Cons of Leasing Solar Panels
Leasing used to be the only way to get solar power for your home without an upfront expense, but today, amazing solar loan options exist that allow you to install home solar panels with no money down and keep a big tax credit. With great options now to finance solar panel purchases, leasing solar is very rare. Most of our clients don’t pay cash finance with one of our in-house financing options and do not lease — it has, in fact, been several years since any of our clients leased a solar project.
Advantages of Financing Solar Panels
With financing we often have clients put no money down, but they are still entitled to the Federal Solar Tax Credit on the entire value of the system. What’s more, many clients don’t pay any more for their solar panels than they do for their monthly utility bills. Along with a solar tax credit upfront, that means many people can have solar panels installed for no money down, and stay cash positive from day one.
Many people can have solar panels installed for no money down, and stay cash positive from day one.
When you sell your home you can often have the remaining solar finance agreement transferred to the new owner or pay it off early as there is typically no prepayment penalty. Occasionally, solar financing options need to have a lien placed on the home, but some solar financing options available at Cromwell require no lien on the home and don’t even need a hard credit pull that can ding your credit score. There are credit qualification requirements for financing like minimum credit scores, but most credit decisions are done in just a few minutes — Cromwell Solar experts can help walk you through the easy process.
Many of our clients pay for their home solar panels without financing and we always talk to our customers about the advantages and disadvantages of financing. The advantages of paying cash over financing solar panels is that you won’t have to pay interest on the borrowed money, while the advantage of financing is that you can get solar on your home without any upfront money needed.
Learn more about home solar panel costs, benefits, payback period, and tax credits.