Solar Lease vs. Solar Financing

Solar energy products are able to save homeowners a decent amount of money on their electricity bills, while efficiently reusing the energy that is readily available in the environment. When you are interested in purchasing solar products for your home, you have several options to choose from for your purchase. You can choose to purchase your solar energy products with cash, through financing, or through leasing. Each of the options that you have available to you has its own set of advantages and disadvantages.

Solar Leasing vs. Solar Financing

Solar leasing differs from solar financing in a few ways. With a lease, you are borrowing the solar products from a company for a specified amount of time and making payments for the products as you use them. However, with solar financing, you will own the solar products that are placed on your home, but you will also be making payments towards the loans that you will have taken out for the products.

Solar Leasing Advantages 

Solar leasing can be a cheaper alternative to solar financing or paying with cash, based on the terms of the lease. Additionally, unlike with solar financing, the payments and installments are typically taken care of by a single company, meaning that you will not need to apply for a loan and search for an installer separately when you are leasing solar products. Maintenance is also taken care of by the companies that lease solar products to homeowners.

Solar Leasing Disadvantages

Solar leasing can be less cost-effective than solar financing over time, especially with leases that contain escalator clauses in their terms. When you lease your home’s solar products, you will not be able to receive the tax benefits that are offered to homeowners who purchase their solar products. Additionally, as the products are owned by the leasing companies, you will not be able to control how the solar products are placed around your home after you sign the paperwork that is provided.

Solar Financing Advantages

Solar financing allows you to own the products that are installed on your home, which can be excellent for your home’s value and your peace of mind. Financing also grants you access to a variety of federal tax incentives and local tax incentives as well, which can reduce the overall costs of the solar products. Solar loans are also more accessible than solar leasing options, which are currently illegal in many states.

Solar Financing Disadvantages

The money that you spend on purchasing the solar products for your home will not be immediately recouped. While financing allows you to own the products that are on your home outright, you may end up spending more on the products due to the interest rates that you will need to pay for your loans. Shopping around for a lender that will provide good loan terms to you can be tedious. You will also be responsible for maintaining your home’s solar products when you own the products. 

Solar Financing Options

There are several sources that you can turn to when you need loans for solar products. One of the best loan sources for you is the bank that you have your home mortgage with. You can open a home equity line of credit, where your home will serve as collateral for the loan. Home equity loans and lines of credit tend to have low interest rates and are also tax deductible.

Many companies that install solar products also work with independent lenders that are able to provide loans for the products that the installers are providing to customers. These loans can be either unsecured or secured. The interest rates of unsecured loans aren’t tax deductible, meaning that you may end up spending more on the loans over time. With secured loans, your home will most likely act as collateral for the loan.


Deciding between leasing and financing your solar energy products is an important decision that you will need to think about carefully. Your choice between either depends on your unique situation and your personal needs. While cash is typically the best choice when purchasing solar products, it can take up to seven years for a solar system to provide a return on the homeowner’s initial investment. Contact us at Midwest Solar Installers to learn more about the differences between solar leasing and solar financing solutions. We will be glad to help you find the option that works the best for you.

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More property owners are opting for solar energy as their preferred choice of renewable forms of energy. As more concerns surface about the impact of global warming and the increas