Solar panels buy or leaseFor most property owners, "going solar" is a complex decision. From the brand of the solar panels to the track record of installers, from the structural impact on the roof to aesthetic considerations, there are many factors that shape the final decision. However, one factor is more likely to trump all the others: economic return. Use Sunmetrix Discover to see what you could save!

Despite plummeting solar panel prices, a complete solar energy system still has a hefty price tag as we discussed in a recent post.  In fact, investing in solar energy can be seen as the second most expensive purchase of a household, sitting somewhere between an actual house purchase and an auto purchase.

Given the sheer number of options you are facing and the responsibility of a significant investment decision, it's no wonder that many property owners feel a bit lost when it comes to the best decision for their particular situation. So, with the hope of simplifying your life a little bit, here are some key factors to consider as part of your solar energy decision.

Determine your "solar access strategy"

Just a few years ago, homeowners had to be very proactive in order to put solar panels on their rooftops. Lack of state and federal level grants and tax credits meant much higher installation costs, and only the diehard environmentalist consumers opted for solar. Today, the market landscape is fundamentally different. Declining installation prices coupled with many government and city-level grants and incentives have triggered a very dynamic marketplace. Solar installers are aggressively promoting their services and many homeowners are being directly contacted by multiple firms.

As in many things in life, increasing number of choices complicate the picture when it comes to the best strategy for you to put solar panels in your home or business. So here is a quick rundown of the main options that are available today.

1. Full ownership of your solar panels with an outright purchase or solar loan

An outright purchase is the option which gives you the most control on your solar energy system, but it is also the option with the highest upfront cost. Fortunately, there are a number of zero-down solar loans available, making this an affordable option for homeowners. A very important benefit to ownership is that you, the homeowner, get to claim the 30% federal investment tax credit available (if you live in the United States). Other state/provincial/municipal incentives can make solar even more affordable. And if you happen to live somewhere with a generous feed-in tariff, like Ontario, your solar panels can make you money. However, even if there are no generous feed-in tariff rates available in your region, utilities are required by law to purchase your solar electricity at the retail rate. Called "net metering", this option may enable you to make a small profit from your solar investment, but the financial return will not be anywhere close to what a feed-in-tariff has to offer.

2. Leasing your solar panels

Continuing with the financing theme, another option available to consumers is to lease their solar panels with a view to full ownership down the road. The financing can be extended by a third-party lender or by the installer. The leasing option decreases the upfront payment necessary to install solar panels on your rooftop. Some installers offer "no money down" financing options as well. Just like a lease contract for an automobile, some providers offer a purchase option after a set number of years.

3. Signing a Solar Power Purchase Agreement (PPA)

The main difference of a PPA from the first two options is the ownership of the solar panels. The following analogy might be useful to illustrate this difference. The first option, outright purchase, puts you in the driver's seat of your own car. The lease option gives you the ignition keys with the option of owning the car one day. In contrast, you are just the passenger with a PPA: the solar panels are owned by a solar utility and you sign a long-term contract to purchase the power generated by the panels. Similar to the lease option, one of the key advantages of this option is the very little (or no) upfront cost. The other advantage is removing the uncertainty from your future electricity bills. By locking-in a fixed rate for many years to come, you can enjoy the peace of mind that comes with having full control on your electricity bills.

The common theme between these three main ways to access solar energy for your home is simple: it's your energy. The solar radiation falling on your property every single day is a very valuable resource, especially if you can find the best way to make use of it. Most of the installers give the top priority to the needs of their customers. But at the end of the day, only you can make the best decision based on your location, the available space on your property and your finances. Why not Discover what solar can do for you?