Homeowners looking to install solar panels are often faced with the question of whether to buy or lease solar panels. However, to decide on the option that makes the most sense, you need to get all the facts on both options.
People have different circumstances surrounding their desire to switch to solar. Some homeowners wish to reap the benefits of renewable energy but are not interested in owning a solar system. Others understand that solar panels can give them the best return on investment, but they may not have the cash at hand to cover the upfront costs of solar system installations. The people in the third group are simply unsure of the option that makes the most financial sense.
Considering the different circumstances and financial goals of New Mexico homeowners, different options will appeal more to different persons. However, to decide on which to choose, here’s what you should know about buying or leasing solar panels in New Mexico.
Leasing Solar Panels in New Mexico
In the right situations, leasing solar panels can be a good choice. With this option, there is no need to finance to cover the solar system installation cost or take out a loan for it.
Here’s how it works.
When you lease a solar panel system, a third-party supplier installs their solar panels on your property for a period, typically 20 years. The solar panels belong to the third-party supplier, which means that they will receive all government tax benefits and incentives. They are also responsible for any maintenance on solar panels that you are leasing.
As the homeowner, you pay the third-party company a monthly fee for their solar panels installed on your rooftop, and you may have the option of purchasing the solar panels after a certain period. In return, you receive a significant discount on your electricity bill.
If you ever have to move from the property, you will need to find someone willing to continue with the solar lease when they move in. However, if you cannot convince the next occupant to take over the solar lease, you will have to pay a break fee to the installation company.
Please be advised that choosing a Local New Mexico Solar Installation Company is highly recommended. This will ensure follow-ups for maintenance, repairs, and additional services.
Benefits of Leasing Solar Panels
- You are mainly interested in using electricity generated from solar rather than maximizing the solar system’s financial benefits.
- You want to skip the solar system upfront cost.
- You want to avoid the responsibility of any maintenance or repairs the solar system might need.
Buying Solar Panels in New Mexico
Buying a solar panel system involves purchasing your solar system outright, or after repaying your solar loan. This means that you own the solar panels, and you get to maximize your solar system’s financial benefits.
The cost of solar has plummeted while the cost of grid electricity has continued to gradually rise, and the concept of the solar “break-even point” with solar has become more and more attractive.In 2019, most homeowners are seeing payback periods between seven and eight years, and 20-year savings estimates upwards of $20,000. Click To Tweet
Some homeowners are seeing break-even points as low as three to four years in states where utility prices are high like Massachusetts and New York.
New Mexico homeowners who buy their solar panels see more savings in their electricity bills in the long run. In about 5 to 7 years, your savings will have already surpassed your initial solar investment, thereby giving you free electricity for the rest of the solar panels’ lifetime. Also, you own the solar system from the beginning, which means you won’t be paying any monthly leasing payments to a third party company.
Additionally, owning your solar system allows you to take advantage of all tax benefits and incentives your solar system qualifies for. These incentives can help you save on your total solar installation cost.
Note also that owning solar panels increases the value of your home. While it may be a little challenging to sell a home with a solar panel lease since you have to find someone willing to take over the lease. Studies have shown that homes with solar panels sell 20% faster, and they sell for 17% more money.
However, because you own your solar system, you are responsible for any maintenance the system requires. Nonetheless, the good news is that solar panels do not require a lot of maintenance.
Benefits of Buying Solar Panels
- You want to maximize the solar system’s financial benefits rather than only gain from the environmental benefits.
- You want to receive all the tax credit and state incentives for going solar.
- You want to increase the market value of your home.
You’ll still get to save money on your monthly electricity bills and have a much smaller carbon footprint regardless of how you choose to acquire your solar panels. But you’ll get to save far more over the long term with solar if you buy your panels than when you lease them.
Note that the significant difference between buying and leasing solar panels lies in the ownership and financial goals. As well as how long you intend to stay in the same home. Nonetheless, both are great ways for New Mexico residents to enjoy the benefits of renewable energy.