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Credit: Derek Gavey

Clean Power

Solar Lease or Solar Ownership? The Ultimate Solar Calculator “App”

A few weeks ago I wrote about the potential comeback of solar ownership relative to leasing, as the cost of rooftop solar PV continues to fall and new financing options make ownership easier than ever. It’s been an ownership pile on since then, with others saying Why Lease Solar Panels When You Can Own Them? and Don’t Lease Your Solar Panels!

Is owning a solar panel the best deal? Find out now with ILSR’s Ultimate Solar Calculator!

The calculator below lets you compare (leasing) apples to (ownership) apples, and the chart below the calculator shows the value of your solar investment over 15, 25, and 30 years.

The default inputs are good estimates based on ILSR’s research, but you can customize the comparison extensively. The key elements in the ownership v. leasing comparison are in orange, but other options (like nearest city) will make the actual numbers accurate to your location.

Scroll below the calculator for explanations of the inputs.

Keep in mind that solar panels typically carry a 20-year warranty, but most panels are expected to continue producing electricity for 30 years or more.

The Ultimate Solar Calculator from ILSR

ultimate solar calculator click to interact
Embed this calculator on your website

Calculator Terms

Solar project size, cost, and electricity production

  • Annual kWh – the estimated amount of kilowatt-hours of electricity produced by the solar array each year.
  • Nearest city – (used to estimate the solar production)
  • Annual output degrade – the annual decrease in the solar production of the solar array, typically 0.5%
  • System size – the size of the solar array in kilowatts
  • Cost per Watt – the cost, including hardware and labor, to install the solar array per Watt of capacity
  • Total installed cost – self-evident, I hope
  • 30% federal tax credit – the cash value of the 30% federal tax credit (available through 2016)
  • State tax credit – state tax credit, if applicable
  • Utility/State rebate – utility or state rebate, if applicable

Economic Assumptions

  • General price inflation – estimated inflation in prices, for estimating the long-term investment value
  • Discount rate – an economists calculation of the time value of money. Default of 8% suggests that you’d value 92¢ today as much as $1.00 next year
  • Real discount rate – discount rate minus inflation rate
  • Net metering rate per kWh – the price for solar energy produced, in dollars per kilowatt-hour. Typically the same rate as is paid for electricity from the utility.

Financing Terms

Leasing Terms

  • Down payment (leasing terms) – the down payment on the lease
  • Lease price inflation – the annual increase in the lease payment
  • 1st monthly payment – the initial monthly payment for the lease
  • Electricity. price inflation – the expected annual increase in electricity prices (historically 3%, but higher in many areas in the past 5-10 years)
  • 15-year buyout price – the price, in dollars, for a leasing customer to buy the solar array after the lease expires (if available)

Embed Code:
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Featured Photo Credit: Derek Gavey

This article originally posted at ilsr.org. For timely updates on democratic energy, follow John Farrell on Twitter or get the Democratic Energy weekly update.

 
 
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Written By

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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