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Today, a Sacramento homeowner who wants to reduce utility bills by installing solar power has two options: they can either own the panels and all other component parts, or they can settle for a Sacramento solar lease.

With either option, you will be able to reduce how much you spend on power but there are significant differences between owning and leasing and buying.

Sacramento solar leases generally last a long time – a full 10, 15 or 20 years. When you lease, the panels are owned by the company that leased them and you have to pay either a yearly payment or you can pay a monthly fee for the lease.

If you are thinking about a solar lease, take the following into account before you commit to a contract.

1. You don’t own the panels so the value of your home doesn’t go up.

When you install solar panels the value of your home increases but not if the panels are leased.

The reason for this is explained in how the panels are handled at the time of selling your home. You have two options:

  • You can transfer the lease to the new owner. People who are looking to buy homes want to avoid the complications of a solar lease. Acquiring your lease means that they have to put up with monthly payments. Most people would rather pay a little more than have to deal with a long solar lease.
  • You can buy the panels and then sell them along with your home. This amounts to throwing away money – all the money that you paid for the lease is a waste because you cannot resell the panels in a home sale. In addition to that, the solar panels will be degraded by the end of your lease, so you will essentially be buying 2nd hand panels for the price of new ones.

It makes a lot more sense to buy the system in the first place. If your problem is money, consider using some financing options, which many companies offer.

2. You don’t get tax credits and rebates because you don’t own the panels.

There are 17 rebates and tax credits in Sacramento for homeowners who move towards energy efficiency, and they add up to a significant amount. The Energy Upgrade Rebate alone is worth $4,000. In California, you can qualify for a property tax rebate for as much as the amount you paid for installation. But if you lease your panels, the leasing company is the one that owns them so all the rebates go to them instead.

It is important to note that you can qualify for more rebates by using solar for specific needs in your home, such as water heating. In California, for example, you get Solar Water Heating Rebate Program.

3. The higher the cost of electricity, the higher your lease payments.

No Sacramento solar leasing company will insulate a homeowner from rising electricity costs. If there is an increase, they pass it on to you which means that the cost of your bills grows higher and higher. Compare this to the fact that if you own the panels you don’t pay any utility bills.

4. Lease companies buy cheap panels to reduce costs.

A lease company will not want to spend money on good quality panels; they usually buy panels that are Made in China, and these are of very low quality.

Not only do they require more maintenance which of course translates to higher costs. The lease company may tell you that they don’t charge separately for maintenance but you can be sure that it is factored into your monthly bills.

Also, if you opt to buy the panels during or after the lease period, you will be buying cheap panels that you may have to replace before long.

4. You pay a penalty if you don’t buy the panels at the end of the lease term.

Solar lease companies almost force you to buy the panels at the end of the lease period.

Most solar lease contracts have a clause that states that you will have to pay a penalty at the end of the lease system if you don’t buy the panels.

The idea was to reduce your utility bills in the first place. If you have to buy the panels to avoid the penalty, any savings that you had made in utility bills will be wiped out. In addition to that, you will be buying panels that are at best 10 years old, that are of poor quality and that will only cost you more in maintenance every year.

As you can see, buying solar panels makes a lot more sense than leasing them.

If your problem is getting the upfront cash to buy the system, look into financing options. There are installation companies that can offer 100% financing and allow you to pay off the loan with monthly installment.

In other words, the amount of money that goes into a solar lease could be directed towards payments to a solar installation that YOU already own.