Q: How do I know if a Loan/ Purchase or a Lease/ PPA is the better option for me to go solar?
A: A) Loan/ Purchase:
Typically is a greater return on investment if you plan on living in the house for 3 years or more, because the solar system will increase the value of the home. There are no upfront costs. You can directly receive tax credits and deductions for the ownership of the system.
Some solar loans place a lien on your property, which can make it more difficult to sell your home or refinance. In recent years, most loans are unsecured loans, just like a credit card, so this is not the case. If you do not pay, they will simply come take their panels, and your credit score will drop.
In the past, solar buyers were responsible for their own maintenance and repairs. Due to demand and enhanced technology that is now available, we now cover 25 years of maintenance, monitoring and insurance on the solar system.
B) Lease/ PPA (Power Purchase Agreement):
This is usually a better option for people who will not be living in their homes more than 2-3 years longer. You can take advantage of cheaper electricity during the time you will still be in the house, but there will typically not be any increase in the value of the home.
There are little or no upfront costs. The Solar Provider is responsible for all monitoring, maintenance and repairs, and a minimum energy production is often guaranteed.
Selling the home may be more complicated than with a purchased system. Options typically are: the new owner must agree to take on the lease/agreement, you continue making payments, or you buy out the lease/agreement, which could be thousands of dollars.