Total Purchase or Plan Costs
Difference 1: Total Purchase or Plan Costs
With a cash purchase, you pay your investment in full, upfront, without any loan fees or interest payments to consider. This results in the highest upfront costs and lowest total costs.
With a loan, your investment includes loan fees and interest payments. Costs are spread out across the terms of your loan, resulting in low monthly payments but higher total costs.
With a lease, you pay a low, monthly fee for the installation and usage of solar panels, allowing you to benefit from low monthly payments without the debt.
Difference 2: Eligibility for Tax Credits and Incentives
With a cash or loan purchase, you may be eligible for tax credits and incentives, including the 30% Residential Clean Energy Credit (RCEC), that can help you recoup some of your investment costs.
The RCEC, like many solar tax credits, is designed to incentivize the purchase of residential solar. If you do not own your solar energy system—as with a lease or power purchase agreement, you are not eligible for the incentives.
Tax credits and incentives available.
Electricity Savings.
- Who decides my utility rate and net metering policy?
- How do electricity bills change with solar?
- How does 1-1 net metering work?
- How does monthly net metering work?
- How net billing works (export credits).
- How does buy all sell all works.
- What if you have net metering and time-of-use rates?
- Residential solar explained.
- How solar works
- Solar installation process
- Solar Utility requirements