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Purchasing vs. Leasing a Solar System

Which option makes better financial sense?
LUIS SANTANA   |   Times
Aerial view of homes with solar panels purchased as part of the PACE loan program.
LUIS SANTANA | Times Aerial view of homes with solar panels purchased as part of the PACE loan program. [ LUIS SANTANA | Tampa Bay Times ]
Published Jun. 30

Leasing of solar panels is a newer and uncharted proposition for solar installations in Florida since Amendment 1 failed in 2016, and seemingly a risky one if not reeled in soon by our leaders. Here is our take at May Electric Solar and for us it is simple. You get the least out of a lease; we wish for you to buy – and here’s why.

By now May Electric Solar could be offering these lease programs or PPA (Purchase Power Agreements), and most likely would have profited from them. But there is one problem; we do not want to sell something that we, ourselves, would have hassles with later. We are a strong 15-year company and have survived three presidents. We have concluded that leasing, as it is now, is not a good fit for most folks. It takes advantage of some and will eventually put most in a world of hurt. It could also cause serious financial issues for Florida and its thriving solar industry. On this current track, there will be a backfire if leasing continues as we know it.

We want to share with you why it is best to purchase your own solar system, whether through a bank loan, a specialized zero-money-down solar loan, or refinancing your home. We have clients who cash in on IRAs or stocks for the good investment solar has to offer compared to current utility rates, especially when they are planning to retire soon.

LEASE vs BUY (in a nutshell)

- The main difference between leasing and purchasing a solar system is ownership. When buying, you completely invest in your home without third-party ownership agreements or PPA (Purchase Power Agreements). OUR TAKE: If you own your home … why would you want someone else in on the business of your family home? It is widely known now that homeowners who sell their homes 5, 10 or 15 years later are having trouble breaking these leases – often requiring a high price for them to buy-out.

- With purchase – whether via traditional loan or an outright buy – the return on investment is often calculable and predictable. In most cases at May Electric Solar, clients who purchase their system can see an ROI of 7-9 years if a tax credit is applicable. OUR TAKE: An outright purchase will net you the best return that can be calculated, often at 13%, and is non-taxed or tax assessed! This is safeguarded by our 25-year products and service guarantees, and the assumption that power companies will continue to raise rates.

- If purchasing with a loan, the client often uses their tax credit and applies it to a low-interest loan product that achieves a low payment. For our pricing, this could be as much as a 35% lower payment than their previous energy budget with the power company. This solar payment is fixed and predictable, and better yet can be paid off ahead of time without penalties. OUR TAKE: Though cash is king, utilizing a loan program that lowers your energy budget at a fixed and predictable rate is better than sending checks out to BIG power or leasing groups that increase your payments.

- When leasing, you are agreeing that a third-party group may essentially use the area of your roof to offer you a lower energy bill at first. Sounds good? Think again. These groups often charge quite a bit more for these contracts than if you were to purchase solar traditionally. They in turn take advantage of higher tax credits at your expense, with a detriment to IRS revenues as well. The main disadvantage of leases and why we avoid them is that what starts out as a lower payment increases each year by 2.8% or more. OUR TAKE: It is ridiculous to enter an agreement with some group that ties up your home in a potential future sale. Nonetheless, the energy payment over those years increases and can easily catch up with current electricity rates – potentially surpassing them. That is not good for folks and jeopardizes this industry.

If you are ready to purchase solar panels for your home, contact Florida’s trusted solar electric installation experts, May Electric Solar, at 727-819-2862 or visit them online at