Solar Systems: What to Know about Buying vs. Leasing For Your Home

Solar systems are hot right now. And no, I don’t mean the planetary objects bound to the Sun by gravity. I mean actual residential solar systems – like solar kits, panels and stations to cost-effectively and energy-efficiently power your home. 

But before we dive into the practicality and function of solar, let’s examine this trend by the numbers: In 2021, the U.S. Energy Information Administration reported residential solar installations were up by 34% in 2021. And in the second quarter of 2022, Solar Energy Industries Association reported a fifth consecutive quarter for growth of residential solar systems. And as reported in the San Francisco Chronicle, an estimated 1.6 million households in California currently have solar panels installed – and growing.

It’s no secret solar panels can potentially save a homeowner thousands of dollars (or more) each year, but the latest question with solar isn’t about the financial viability of these systems; it’s about the cost-benefit analysis of purchasing or leasing them.

There are a lot of options available for homeowners, whether they are purchasing the systems or leasing them. I always tell my clients: If you’re planning on staying in your house indefinitely and you want to make the investment, buying the system is great. If you’re not planning to stay for a long time, there are leasing programs available. 

The only caveat people have to know is that when they sign these leases, they are usually a 20-year lease term and if you’re selling the house, you only have two options: The buyer must qualify and assume the lease or the seller has to pay off the entire lease, which can get very expensive, in order to transfer clear title. Sometimes, the buyer doesn’t want the lease and that’s where problems can begin. Our local MLS, for instance, requires marking a box in the listing to say whether the solar systems are leased or owned, so buyers can be prepared.

The other important thing to remember is that regulations vary from city to city, county to count and on the state level, and knowing the restrictions in your neighborhood is key. A lot of the good solar companies will go to your house and perform an efficiency check to determine if the system will work for your property. For instance, are there too many trees? Is there enough sun exposure? 

Systems can also vary in terms of their output, and some of the systems that get installed are incredibly sophisticated. I just saw one recently that is a giant series of solar panels on a rotator and it’s all computerized to follow the sun for maximum exposure. 

Ultimately, you have to figure out what your actual solar usage is and combine that with the cost of leasing or buying a system then see how much you’d be saving per month to determine if the system is right for you. It should make sense not only from a personal budgeting perspective but also from a cost-saving perspective; you put in a tiny system and the cost of the system and lease might not make up for bills paid if there’s only one person living there. On the other side of the equation, you could install a system and save a lot of money. The key is to let the solar system work not only for your house but also for you.

Andrew Manning • REALTOR® • Berkshire Hathaway HomeServices California Properties • DRE: 00941825 • 818-380-2147 •