Did you know?

You will typically save more than double over the life of a system by buying your solar panels vs entering into a third party owned lease or PPA agreement.

Solar lease vs buy

System Size 5kW Purchased System (fund with HELOC loan) PPA
Upfront Cost $16,000 $0.00
Total Output per annum 7,851 kWh 7,851 kWh
Escalation percentage N/A Assume 0%
Interest Rate 5% N/A
Annual Payment to solar company $0 $1,216
Total output over 25 year life 196,280 kWh 196,280 kWh
Cost of a replacement inverter after 12 years (may not be required $1,300 N/A as solar company responsible
26% tax credit $4,160 Solar company keeps your incentives
Total Payments to generate this amount of power $18,753 $30,185 plus any residual payment at end of PPA
Savings on power over 25 years (assume 2.5% utility power price inflation) $56,316 $56,316
Source of funding HELOC loan at 5% originally for $16,000 but then paid down to $11,840 Funded by solar company
Profit (savings less total payments) $37,563 $25,931

So as you can see you save a lot more on solar if you organize the loan yourself rather than leaving it to the solar company. However, in both circumstances you are significantly better off by going solar than by doing nothing. The other advantage of the purchase with loan is that you don't have to worry about transferring the PPA contract if you sell your home. The only circumstances in which I would choose a PPA over a purchase would be if I did not pay federal income tax and so could not use the 26% federal solar tax credit.


How much will solar panels really cost for your home?

How much will solar panels really cost for your home?